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Businesses Step Up Lawsuits against Online Criticism

Individuals making comments on the Internet criticizing products and services may be surprised to discover that businesses are increasingly fighting back. The trend is for businesses to no longer sit back and take online criticism of their products or services lightly.

Cases with Different Outcomes

1. Doctors win $12 million award.Sherry Petta had cosmetic surgery at an Arizona facility. Afterwards, she had trouble healing and launched a website to complain about the medical treatment. A judge ordered her to take the website down. She then posted negative comments on various websites. She made accusations that two doctors falsified medical records, tampered with evidence, abused narcotics, were unlicensed and used unauthorized products.

In 2008, the physicians sued for defamation, claiming the accusations caused their practice harm and resulted in financial losses. In January 2012, a jury awarded them $12 million. (Desert Palm Surgical Group PLC et al v. Petta,Maricopa County Sup. Ct., CV2008-010464)

2. Dispute with contractor leads to lawsuit. A home improvement contractor was hired by Jane Perez to do jobs in her Virginia townhouse such as paint, refinish floors and plumbing. She found the company's work unsatisfactory and wrote about her bad experiences on two websites (Yelp and Angie's List). Perez accused the company president, Christopher Deitz, of stealing jewelry from her home.

"Bottom line - do not put yourself through this nightmare of a contractor," she wrote. Dietz sued Perez for $750,000 in damages claiming her statements were untrue and harmed his reputation. He then sought a preliminary injunction to force Perez to take down the negative comments. The county court granted a partial approval, requiring her to take some material off the websites, including the accusation of jewelry theft. (Dietz Development LLC v. Jane Perez, No. CL2012-16249, Fairfax Circuit Ct.)

Perez appealed to the Virginia Supreme Court, which reversed the preliminary injunction, stating it was "not justified." The legal disputes between the two parties are not over. The contractor's defamation case against the homeowner is still pending.

3. Physician sues after negative reviews. A Duluth, Minnesota physician who practices neurology filed a lawsuit after a patient's son posted negative reviews about him on online doctor rating websites. The son criticized his father's medical care, as well as the doctor's bedside manner and interactions with the family. The son also sent critical letters to the hospital and medical associations.

The physician claims the written statements "defame him and interfere with his business." The trial court ruled they were not defamatory. The Minnesota Appeals Court reversed and remanded the case for trial. The Minnesota Supreme Court heard the case in September of 2012 and the parties are awaiting a decision. (David McKee, M.D. v. Dennis K. Laurion, A11-1154)

What's more, courts often side with the businesses and award large damage awards.

Also, people may think they are anonymous when they are online posting comments. However, with the evolution of Internet law, a person's name is subject to disclosure. Businesses can -- and do -- sue posters for defamation.

When a business has critical comments, the vendor may ask the service provider, or the service provider may request the person, who posted the critical comment, to remove it. If the person fails to do so, a lawsuit could follow.

The issue is whether the comment is an opinion or an untrue statement. In other words, does it involve the First Amendment right to free speech (an opinion) versus a defamation claim (a false statement of fact). For example, if a consumer opines that a restaurant's food tasted terrible, that may be considered an opinion. But if the consumer states that the restaurant had rats without any basis in fact, that would be defamation. Keep in mind that written defamation is libel.

Libel is the type of defamation with a permanent record. Libel comes into play in newspapers, letters, website postings, emails, pictures, or as part of a radio or TV broadcast. If a business can prove that someone libeled it, and that person does not have a good defense, a court may presume that the business suffered damages and award money to pay for the damaged reputation and loss of profits.

The basic elements of libel are:

1. A written false statement;

2. The statement was made to a third party; and

3. The statement caused harm.

If someone sues for defamation, the most common defenses are:

  • Truth (known in law as "justification") - The statement is true.
  • Absolute privilege - Usually a statement made in court during a proceeding.
  • Qualified privilege - When a party is acting is good faith, without malice.
  • Fair comments - Honest statements of opinion, based on facts, and not malicious.
  • Responsible communication on matters of public interest (depending on the jurisdiction).

How Identity Is Discovered with a Doe Subpoena

A "Doe subpoena" seeks the identity of an unknown defendant in a lawsuit. Most jurisdictions permit a plaintiff who does not yet know a defendant's identity to file suit against John or Jane Doe and then use the tools of the discovery process to seek the defendant's real name.

A Doe subpoena is often served on the online service provider or ISP for the purpose of identifying the author of an anonymous post.

First, the plaintiff issues a subpoena to the hosting website requesting the IP address of the poster. After, obtaining the poster's IP address, the plaintiff must then subpoena the ISP that owns the address. This second subpoena requests the contact information associated with the account of the computer to which the IP address was assigned at the time the post was made.

Providing Notice

Courts do not require the target of a subpoena to provide notice to the person whose identity is sought. However, in most jurisdictions it is required by law to notify its subscriber before revealing any personally identifiable information in connection with a subpoena.

A defendant who receives notice may file a motion to quash, which asks the court to block the subpoena and prevent the ISP from complying. ISPs may also challenge Doe subpoenas on their customers' behalf, but they are not required to do so.

It should be noted that the federal Communications Decency Act (Section 230) generally protects service providers from lawsuits because of third party postings.

However, the law is evolving. Possibly, if a service provider knows that the post is fraudulent and refuses to take it down, it could be liable in a lawsuit.

Consult with your attorney if defamation occurs. Developing a strategy to immediately respond can minimize the damage that online attacks can make.