courtThere is a case that is going on right now that involves Yelp and a “default judgment” against someone (defendant bird) who wrote up a critical Yelp review about a San Francisco attorney (plaintiff Dawn Hassell )that could dramatically impact the online review economy if the decision is allowed to stand.  A number of major companies, including Facebook, Twitter, Google, Pinterest and a variety of others have submitted letters to the California Supreme Court and urged the court to review and overturn the case.

Hassell has mostly positive reviews on Yelp, but decided to sue Bird for defamation over his negative review (which was updated after the fact).  In response, Bird decided not to defend against the suit, so in the end, there wasn’t any real hearing on the merits  Hassell was able to obtain a default judgement and damages.  The trial court decided to issue an injunction compelling Yelp to remove the review.  Because the review site had never been notified of the suit, or even allowed participate, Yelp refused to remove it.  The trial court and an appellate court upheld the injunction against Yelp.

Read Birdzeye B.‘s review of The Hassell Law Group on Yelp

Although Yelp isn’t liable for reviews written on the site, it wasn’t to protect its members’ right to write the reviews they want.  Because of this, a 2014 California law that prevents businesses from writing non-disparagement clauses or similar terms into contracts seeking to penalize or intimidate consumers and preempt negative reviews of these businesses.

In this case, there’s some obscure legal-procedural issues that are

explained in depth by Eric Goldman. But here’s the simplified version:

  • The court is exercising jurisdiction and ordering Yelp to remove a review despite the fact that Yelp was not involved in the litigation or allowed to contest the underlying issue of the alleged defamation. Essentially Yelp says it’s being deprived of due process.
  • Equally if not more important is what’s at stake for online free speech and reviews in particular. Allowing this decision to stand could chill speech and cause ordinary reviewers to be intimidated by business owners and companies unhappy with their online reviews.

The implications could be bit far-reaching. There was a letter that was submitted to the California Supreme Court that supported Yelp’s position by legal scholars that’s outlined in this second point and its real-world consequences in very clear terms:

Say a business dislikes some comment in a newspaper’s online discussion section. The business can then sue the commenter, who might not have the money or expertise to fight the lawsuit. It can get a consent judgment (perhaps by threatening the commenter with the prospect of massive liability) or a default judgment. And it can then get a court to order the newspaper to delete the comment, even though the newspaper had no opportunity to challenge the claim, and may not have even heard about the claim until after the judgment was entered. This is directly analogous to what plaintiff Hassell did in this very case.

Will the California Supreme Court take the case and overturn the decision?  We’ll have to wait and find out as things unfold.

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