US Court Rules Yelp Must Identify Anonymous User In Defamation Case

Earlier this week, a California state appeals court handed down its decision in a pivotal lawsuit that could have significant effects on Yelp's business and anonymous speech online in general. The court determined that Yelp will have to turn over documents that could identify an anonymous user who is accused of defaming an accountant in a review posted on its website.

Photo: Getty

The case goes back to 2016 when a tax preparer named Gregory M. Montagna accused a Yelp user going by the name "Alex M." of defamation for an online review of the accountant's services. According to court documents, the user wrote:

Too bad there is no zero star option! I made the mistake of using them and had an absolute nightmare. Bill was way more than their quote; return was so sloppy I had another firm redo it and my return more than doubled. If you dare to complain get ready to be screamed at, verbally harassed and threatened with legal action. I chalked it up as a very expensive lesson, hope this spares someone else the same.

Montagna has said he believes this user to be a woman named Sarah J. Nunis. He claims that he quoted Nunis a price of $US200 ($262) for his services based on the understanding that "that her income was comprised exclusively of wages reported on a W-2 form, and she would require only a simple return". When it turned out that her return was more complicated, Montagna claims that he raised the price to $US400 ($524). The two parties have disputed the amount due ever since.

The issue is that for Montagna to properly prove that he is being defamed, he needs to know for certain who is making the accusations against him - which is where the case gets buried in finer points of legalese. A lower court previously determined that not only does Yelp have to turn over documents that might identify Alex M., but also that the company didn't have the proper legal standing to assert First Amendment rights to free speech on the user's behalf.

Yelp has a demonstrable business interest in making its users feel comfortable in stating whatever opinions they like. As do numerous other online companies. In this particular case, Twitter, Reddit, Google, Dropbox, the Electronic Freedom Foundation, and many others signed on in support of Yelp's defence of the user. In support of Yelp in May, the EFF argued:

Besides anonymous speakers asserting their own rights to directly challenge the legal demands to unmask them, online platforms are increasingly asserting their users' rights in court. Platforms assert their users' rights for a variety of reasons, including deterring frivolous efforts to unmask speakers and upholding their own platforms' views on the importance of free speech. They also seek to make their platforms hospitable to important speech that may only be offered under the veil of anonymity. Simply put, many online platforms recognise that a key to maintaining the robust forum their users rely upon requires having their users' backs.

It's easy to see why companies such as Reddit and Twitter didn't want this kind of dangerous precedent to move forward. Not only would it be burdensome to constantly comply with every request for de-anonymising a user who could potentially be making a false statement, but if users don't feel comfortable being honest, they will likely stop contributing to the platform or go to a competitor that offers better protections for anonymity. Furthermore, the EFF wrote that if sites lacked the standing to assert users' free speech rights, "defence of these vexatious requests will fall solely to users themselves, many of whom may not know their rights or may otherwise not be in a position to fight for them". The idea here is that large platforms with proper legal representation are in a better position to understand and defend legal protections.

The appeals court's decision this week was mostly bad news for Yelp, but it did provide one positive outcome. The court determined that Yelp and sites like it do have the standing to assert First Amendment rights on behalf of their users, but the company will still have to turn over documents that could expose this user's identity because Montagna has shown evidence that the review was defamatory until proven otherwise. In other words, Alex M. will need to prove that their statements were true now that Montagna has reasonably shown that they might be false.

For activists such as the EFF, this decision could still be considered a victory because the court confirmed Yelp's right to claim First Amendment protections for its users. That was certainly the most problematic part of the case. But for Yelp, or Google, or Facebook, all companies that are offering review services, the outcome is complicated. On the one hand, users might feel uncomfortable openly expressing themselves in the future. A user could hope to state an opinion but fear it could be misconstrued as defamatory. On the other hand, the services might be more useful if reviewers were a little more thoughtful when they weigh in. The fact is this case raises another issue in that the public may be relying on the feedback from review sites so heavily that a handful of trolls can ruin a business. Unfortunately, the legal system can do very little to force the public to start treating online reviews with a little more scepticism.

The good news is this lawsuit doesn't necessarily set a precedent that will be applied across the board. The case law cited in the decision states that it's up to the court to resolve the situation when there is "a conflict between a plaintiff's right to employ the judicial process to discover the identity of an allegedly libelous speaker and the speaker's First Amendment right to remain anonymous". So, for now, it appears that this kind of unmasking of anonymous users will be taken up on a case-by-case basis.

Gizmodo contacted Yelp for a statement on the court's ruling but had not heard back at time of writing.

[Bloomberg]

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Comments

    Personally, i don't see the issue here. If the review, in this case, is legitimate why does the person need to hide behind anonymity. That review could seriously impact the business. If its true then it will come out and the review can stay otherwise its bullshit that a disgruntled customer can say what they please. I think the online platform allows people to do and say what they like as they know there are zero consequences to their actions.

      Pretty much this. If the person stands by their review they should have no problem revealing their identity.

      It's a slippery slope kind of thing. The problem is precedent. Once that is established, it's set and nothing can undo it.

      That can open it up to abuse. Like a company that wants to go after anyone for a bad review and find out who that person is so they can drag them though the courts and bankrupt them.

      People then become scared to speak with freedom against any company (Note: not the review companies like Yelp. The company that was reviewed.) because they would not have the money to go against them in court if the company came after them and that affects the bottom line for companies like Yelp, Google, Facebook, etc et al cause they make money off the review business.

        If it isn't defamation, then you don't have much to worry about. Dragging Joe Citizen to court isn't a good look for large businesses so they're unlikely to do it. Small businesses (who are most affected by this) don't have the money to bankrupt Joe Citizen either.

        I agree with you for the most part. I just feel sorry that the business doesn't have the same rights as the individual in this case. We all look at reviews and a terrible review can definitely impact your view on something.

        I just think there needs to be a method for a business to respond and address a bad review especially if there is doubts about its legitimacy.

        That's not how precedent works in US courts. Like here they can be over ruled.

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