Can you sue if a customer posts a bad online review?

For a business, a bad online review can help determine whether new clients flock in the door.

But if someone writes such a review on Yelp or any other website, you might be out of luck.

In a recent case in California, a federal appeals court decided that an angry business owner who got a one-star rating from a customer couldn’t sue Yelp.

The case involves Douglas Kimzey, owner of a locksmith business. A customer named “Sarah K” wrote a Yelp review of the business in 2011 which said, “THIS WAS BY FAR THE WORST EXPERIENCE I HAVE EVER ENCOUNTERED WITH A LOCKSMITH. DO NOT GO THROUGH THIS COMPANY.”  And she gave the business a one-star rating.

A year later, Kimzey’s company commented under the review and said: “Yelp has posted a fraudulent review [of] our business.” The comment linked to a very similar review Sarah K posted of a company with a similar name. Then, Sarah K posted an updated review explaining that the original review was intended for Kimzey’s company, and that she accidentally posted the similar review on the other company’s page.

Kimzey was not happy at all about these negative online comments. But a provision of the federal Communications Decency Act (CDA) protects providers of interactive online services such as Yelp against liability related to content posted by third parties.

So Kimzey tried to get around it. He filed a lawsuit against Yelp, claiming that by creating the 5-star review, Yelp essentially turned its users’ reviews into its own content.

But the federal appeals court in California told Kimzey he couldn’t sue.

It’s important to understand when you have any recourse in a situation like this.

According to the “safe harbor” provision of the federal CDA, the following parties are protected from being sued for online content: interactive Internet service providers, electronic bulletin board providers, social networking sites, bloggers and websites, as well as businesses that provide email services to their employees.

As legal questions over online reviews have arisen over the past few years, court decisions have given a range of guidance on situations when you can and can’t sue.

Here are some examples of when business can sue:

  • When the online provider does something to encourage defamatory or illegal content, such as posting protected private information.
  • When the online provider makes measureable changes to content created by a third party. That includes examples when the site adds its own opinion into the edits.
  • When the online provider allows third parties to post copyrighted work, trademarks or patents of another business. (There are other federal laws that might bar a suit if the provider takes the posting down.)

Here are instances where a company couldn’t sue:

  • When the online provider edits content merely for spelling, grammar and length.
  • When the online provider posts or reposts third-party content, such as reviews or blogs. That includes situations when the provider pays for the content.
  • When the provider includes tools for creating content, such as the Yelp star ratings at issue in the California case, chatrooms, etc.
  • When the online provider screens and removes content, usually even if that content was fraudulent, defamatory or untruthful.
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