What California Supreme Court’s Victory for Yelp Means for Restaurants

by Pooja S. Nair3 Min Read

On July 2, 2018, the California Supreme Court ruled in Hassell v. Bird that Yelp could not be ordered to remove negative reviews posted by a user.  This decision was hotly contested, and came down to a very close 4-3 ruling.  Ultimately, the court held that Yelp could not be forced to take down negative reviews from users of the website, even if the reviews were found to be defamatory.

The review in this case was a one-star review of a law firm in San Francisco.  A dissatisfied former client wrote a scathing review of her former law firm.  The law firm sued the former client for defamation, but did not name Yelp as a defendant in the lawsuit.  The lower court ruled that the Yelp reviews were defamatory and instructed both the former client and Yelp to take them down. Yelp appealed the order as a non-party to the lawsuit, arguing that being forced to remove a review would place an undue burden and hinder their free speech rights, and violate federal law.  The case garnered significant attention with multiple free speech groups, including the ACLU submitting amicus briefs in support of Yelp’s position. On the other hand, the business’s position was that the reviews in question had already been found to be false and defamatory, and requiring Yelp to remove them from the website was the only way for the business to have a remedy for the harm it suffered from the defamation.

Yelp’s argument was based on Section 230 of the federal Communications Decency Act of 1996.  Section 230(c)(1) provides, “No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.”9 Section 230(e)(3), meanwhile, relates in relevant part, “No cause of action may be brought and no liability may be imposed under any State or local law that is inconsistent with this section.”  

The majority opinion found that Yelp was undoubtedly a “provider or user of an interactive computer service” within the meaning of section 230(c)(1), and was thus entitled to a broad immunity, including immunity from being subject to the order to take down the bad reviews at issue.  The Court found that if Yelp had been originally named as a defendant, it could have sought this section 230 immunity, and that the plaintiff could not find a loophole by failing to name Yelp as a defendant and then obtaining an order against it.

Two separate dissenting opinions put forth scathing criticism of the decision.  The dissenting justices warned that individuals who had been defamed by online reviews would have no meaningful remedy to take down false or misleading information.  In this case, the reviews at issue had already been found by the trial court to be defamatory, and yet the defamed company had no way to force Yelp to take down the content because of the broad finding of section 230 immunity.  The dissenters also warned of the need to balance the value of free expression and a relatively unregulated Internet against the harms arising from damaging words or private images that people are not lawfully free to disseminate.

The case has wide implications for the restaurant industry.  While restaurants can still sue individuals over slanderous or libelous online reviews, it will be harder to take down this content in California.  The broad interpretation of section 230 immunity means that in California, the subjects of even defamatory or slanderous reviews have little recourse to get a lasting remedy, even if they pursue expensive litigation.  

Yelp asks businesses to report false or derogatory reviews, but warns that they do not “typically take sides in factual disputes and generally allow Yelpers to stand behind their reviews.” The use of fake Yelp reviews to damage restaurants has been in the spotlight lately, with high profile cases such as the Red Hen restaurant in Virgina being subject to hundreds of “weaponized” Yelp reviews by non-customers and Ayesha Curry’s International Smoke restaurant in Houston being bombarded by hundreds of negative reviews by Houston Rockets fans before the restaurant even opened.

The full text of the opinion in Hassell v. Bird is available here.

Pooja S. Nair

Pooja S. Nair

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Pooja S. Nair is a litigation attorney at TroyGould PC in Los Angeles, where she is a member of the firm’s food and beverage practice.She is experienced in complex commercial disputes, internal investigations, whistleblower issues, complicated eDiscovery collection and production issues, and governmental investigations.

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