Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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UPDATED: Dec 10, 2012

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Yelp.com is the first stop for many consumers when choosing where to dine, get a hair cut or even when hiring a home contractor. Recent studies have found that Yelp reviews have a significant impact on a business’s foot traffic. According to one study, a half-star can increase a restaurant’s chances of getting a consumer’s business from 30 to 49 percent. So, when a company gets a bad review, they are sure to feel the pressure; but do they have the right to sue?

Home contracting company Dietz Development thinks, “yes.” The business that has a page on Yelp for anyone to review is suing a woman for $750,000 in a defamation lawsuit. According to news reports, the defendant, Jane Perez, has been court ordered to change her Yelp review as it has been found that her written remarks may be libelous.

In their lawsuit, Dietz Development is claiming that Perez’s review, which took a not-so-nice take on the development company’s work, cost them thousands of dollars in income from the loss of potential customers. As part of her review, Perez accused Dietz Development workers of stealing jewelry from her home, but after a police investigation, no evidence was found to support this claim. If a person’s claims are not based in opinion, but attack a person or business’s character with untrue accusations, and cause harm, this could be grounds for a defamation lawsuit. If Perez’s accusations are found to be entirely untrue, and it is shown that Dietz Development did in fact lose significant business as a direct result, the development company may have a case. But not without a whirl wind of controversy.

Free speech advocates are up in arms, defending the rights of Yelpers to review as they please. Concerns over what are called “SLAPP” lawsuits are also being voiced. SLAPP (Strategic Lawsuits Against Public Participation) suits are ones filed not with the intention of winning but in an effort to intimidate an outspoken defendant into silence through burdensome legal costs and tribulations. But others are endorsing the legal action and saying that with online reviews should come different standards of First Amendment rights. Business owners tend to agree that defamation claims should be considered in cases where untrue contentions cause significant impact to businesses; just as they may in non-Internet setttings.

Are issues of free speech in need of a makeover in the Internet age? Do the same basic principals apply when free “speech” has become a pervasive, and anonymous, Internet phenomenon through which commenters and reviewers can effectively make or break a company with the mere click of a button? And what about favorable reviews that are really hired individuals paid to make a company look good through online reviews? A great many questions are emerging to distinguish right from wrong in online blogging and reviewing practices. Whether you agree or disagree with Dietz Development’s actions, it is lawsuits like these that are shaping the online standards of tomorrow.

To learn about defamation lawsuits and liability, follow this link.