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Nasir and Matt talk about a judge in New York awarding a business owner $1,000 as a result of a bad Yelp review left by a disgruntled customer. They also discuss a recent lawsuit appeal made against Yelp and how Yelp determines what reviews are hidden.

Full Podcast Transcript

NASIR: Welcome to our podcast where we cover business in the news and add our legal twist. My name is Nasir Pasha.

MATT: And I’m Matt Staub.

NASIR: And someone keeps calling me while I’m doing this podcast. Third time and it’s from North Carolina. I don’t know who it is. I don’t know anyone from North Carolina.

MATT: Well, it’s not who we’re talking about today because it’s not in North Carolina.

NASIR: Okay, good.

MATT: Yeah.

NASIR: That was my first thought – they were trying to call us, they’ll talk about them, which would have been a good sign – that means we have a good story.

MATT: Well, I don’t know. I don’t know which side of this story would… I guess probably the reviewer. Actually, I don’t know. I don’t know which side would want us to talk about this story less. We can decide later but, basically, here’s what happened. Woman contacted this company, Mr Sandless, to refinish the floors in her living room and dining room for $695 which, depending on what they did, that’s actually a really good price.

NASIR: Yeah, I think so.

MATT: I would take that up and, of course, how much space there is, but it seems like a good deal.

NASIR: Yeah, that probably matters most but yeah.

MATT: So, she wasn’t satisfied with how the work went. She, of course, does what a lot of people do nowadays and went on Yelp and posted a review. It wasn’t that favorable for the business, used some words like “scam” and “robs customers,” “scam liar bleep something.” I don’t know if she actually edited it out herself or they just did that in the article.

NASIR: I think it says “scam liar…” I don’t know.

MATT: I know what it’s saying. I don’t know if the article edited it or if she edited it.

NASIR: Yeah.

MATT: If you write something obscene, you know, usually that’s grounds for having it taken down but, anyway…

NASIR: I think Yelp’s policy is they don’t allow foul language in there so the reviewer herself might have edited it.

MATT: That’s my guess. So, she posts this and, you know, there’s different ways to resolve these issues but she ends up getting sued by the company she hired to do the work and the worst part is, for her, that the judge found that she’s liable for $1,000 because some of the words she used – like “scam,” “con artist,” “robs,” – implies that the actions were criminal wrongdoings rather than someone who just normal breach of contract. This was in Staten Island so a very isolated case, isolated jurisdiction, but it’s very interesting that a judge would rule, you know, decide: “Actually, the business gets $1,000 because this poster is insinuating that there was criminal acts that were done.” Obviously, there’s nothing criminal here. Well, based on what we know.

NASIR: And I think this lady is appealing or I don’t know how practical that is, that seems ridiculous to me that she’s appealing, just pay the $1,000 but, you know, I think every judge in the country, with the same facts, at least they should rule in the same manner – obviously, no judge is perfect – but that’s what I think should happen. But let’s think from the reviewer’s perspective for a second. I hate doing it but let’s do it. You know, using a word like “scam,” “liar,” and things like this is very hyperbolic, obviously.

MATT: Yeah.

NASIR: But so is, when you say, “Oh, I’m going to kill you!” et cetera, like, everyone should know, you can’t say those things, right? Even hyperbolically, you can’t say it, especially in writing. Everyone knows, when you put it in writing – whether it’s in an email or online review – it can be viewed much more differently. So, even if she meant that, when she says it’s a scam, liar, or whatever, she’s not necessarily saying that she was scammed but that she feels that she didn’t get her money’s worth is really what she’s saying. Those words are so strong, especially against these contractors that the judge was right. There was an implication that there’s some crime going on and that’s the problem – these words that we – and I don’t necessarily mean me but “we” as consumers – use when reviewing on Yelp are so strong and so damaging that, a lot of times, people don’t realize that and that’s when a defamatory lawsuit will come after these reviewers and the employers will win when this kind of language is used.

MATT: Yeah. I mean, there’s different levels of these negative reviews. There’s an experience where you go in – let’s just say a restaurant – you go into a restaurant, service was terrible, they screwed up your order and then you leave a review just saying that, I mean, you’re just stating facts that happened. Okay, that’s fine. Let’s say you take it up a notch and throw in all this other language like some of the stuff you said, short of insinuating criminal acts, you know, that’s going to cross the line possibly, depending on what you say. And then, we have this other level of now you’re just insinuating that there were crimes committed, and I don’t think, when she says “robs,” it’s not like the business is physically robbing her.

NASIR: Yeah.

MATT: It’s a little bit different but, yeah, I mean, some of the stuff you said, too. We see a lot of Yelp reviews so we see the full gamut of okay bad reviews all the way up to like some of the reviews I’ve seen have just been outrageous.

NASIR: Yeah, ridiculous.

MATT: It’s just insane some of the stuff that people write up there and I understand because people are upset but, I mean, you’ve got to be smart about it. You said, “Don’t ever put it in writing.” That’s why I call people for my threats and just California you have to have dual consent to record something so we’re pretty safe, unless you’re the owner of the LA Clippers which apparently that’s fine. You know, things like that.

NASIR: But you’re right. There are definitely different categories and usually the ones on the extreme are, on one hand, they’re easier to litigate because it’s more clear but, on the other hand, they’re not as damaging because they’re not as believable, you know, in a way, especially if you have other reviews that are good and then you have this one that is just crazy, then I think, for most people, well, I should say a good handful of people, they may discount that review in their head but it still counts against the Yelp score, the Yelp stars, or what-have-you. But it’s those reviews that are just dishonest and are made to look very real.

MATT: Yeah.

NASIR: We’ve seen this very clearly when we knew 100 percent that this reviewer was lying but the reviewer crafts it in a way that is believable and those are sometimes much worse because there’ll be times when reviewers – and we’ve talked about this in the past where reviewers didn’t even actually go to that particular vendor – they weren’t even actually a customer or a client and yet they describe it as if they had a bad experience and, of course, we know it’s a lie. Those are worse.

MATT: Oh, yeah.

NASIR: They’re easy to prove, too, but harder to deal with.

MATT: Oh, yeah, and much where they have a review that’s just like the one that this woman posted here as opposed to one that’s just like a straight up facts and saying bad things based on work they have done or something like that. I mean, that’s way more damaging because it’s credibility. If I see a Yelp review that’s just outlandish, I just look at it and say, “Well, that person is probably crazy.”

NASIR: Yeah.

MATT: What I usually do is click on their profile to see the other reviews that they’ve left and, if it’s a bunch of that, it’s like, “Oh, this person just wants to go online and complain.”

NASIR: Unfortunately, we’re not normal users. We’re attorneys that actually represent business owners against some of these wacko reviewers.

MATT: Yeah.

NASIR: Unfortunately, most reviews or most users of Yelp and these other review sites don’t probably look at it the same way.

MATT: Yeah, and speaking of attorneys, you see the attorney for the business was Jesse Eisenberg. I didn’t know he was acting and also an attorney so that’s pretty impressive for hm.

NASIR: Oh, he’s the guy that played Zuckerberg?

MATT: Yeah. I mean, he’s played a lot of roles but probably his biggest one was that but, anyway…

NASIR: He was in Rio 2, by the way. He was the voice of Blue.

MATT: He was in another movie recently, in the last month or so.

NASIR: Was it either Louder than Bombs or American Ultra?

MATT: Yeah, American Ultra. Well, probably both, actually. Since you’re just reading his IMDB page, I’m assuming.

NASIR: Yes, and American Ultra had a rating of 6.3 so I may check that out.

MATT: That’s tough. Good relation to the rating since we’re talking about ratings. So, I don’t know if this was verified by Yelp or what it says because it has this weird algorithm or so it claims of filters reviews and what it is saying is it has this automated recommendation software engineered to highlight the most useful and reliable content. “Our stance is quality over quantity and we currently recommend about 71 percent of the reviews that are submitted.” But, I mean, on the flip side, and there’s lawsuit, I don’t know if we talked about this before or not but there’s a lawsuit that’s out in…

NASIR: It’s in Washington but it’s been appealed to the Ninth Circuit.

MATT: Yeah.

NASIR: This is an interesting lawsuit, actually. Basically, we’ve talked about this before – this company that had a similar experience. It’s a little bit more subtle than that but, just to make the facts simple, they sued Yelp and the case was dismissed. The judge said, basically, Yelp is immune under the statute which we’ve talked before which is – what’s the number again? Do you have it with you? I always forget the exact statute number.

MATT: Do I have it with me?

NASIR: Do you have it on you?

MATT: Yeah, I carry the physical statute. I don’t know.

NASIR: Hold on. Let me get it.

MATT: I believe it’s 47 USC Section 230, for those fact-checking.

NASIR: Section 230 of the Communications Decency Act and we’ve talked about this statute before. It basically immunes these types of online publishers for content that are published by the users. Okay, fine. That was pretty obvious that was going to happen. So, Kimzey appealed though and they’re saying, “Okay. Well, Yelp took this review that was published by its user and then published it on Google meaning the Google search engines I believe is what they’re referring to.

MATT: Yeah.

NASIR: Therefore, in that instance, Google is protected by Section 230 – not Yelp – because Yelp, in that case, is the publisher. It’s an interesting argument. I don’t know what your thoughts are. I still think that that act of publishing and whether it applies, I mean, the law probably needs to decide that. if they’re lucky enough to actually have a judge side with them, that’d be great, but it kind of throws Section 230 out the window because that means that all the other companies including Facebook and A to Z – these companies that are basically publishers of user content, once it appears in the Google listings and that information has appeared, then all of a sudden now they’re opening themselves up to liability which, to me, that doesn’t make sense, right?

MATT: Yeah, it’s a stretch, for sure.

NASIR: More interesting is that Kimzey – this is in Washington – Yelp, I’m sure, I think they filed an anti-SLAPP motion and the judge didn’t even rule on that but I think it’s important to talk about anti-SLAPP motions for a second because we handle issues where a reviewer like this and, if you sue the reviewer for defamation – which is a very common tactic – the number one problem in certain states like California especially, in Texas, not as much in New York because their anti-SLAPP motion is a little bit weakened, they can actually respond to under this concept of anti-SLAPP motion and a slap is basically an acronym for a strategic lawsuit against public participation. Without getting into the details, here’s the bottom-line – especially in California, if they pass a law basically trying to discourage these kinds of lawsuits that are just made just to kind of pester and to quiet you down and so, when you’re suing for defamation, because there might be a public interest, let’s say you are a thief and a scammer and this person is saying so online and you sue them for it, California and other states don’t want to reward you in the legal system and want to have some kind of tools for the people that are being sued to fight back. And so, the anti-SLAPP motion actually starts pushing the burden of proof on your side. If you lose that motion, then there could be attorney’s fees that goes against you. So, usually, when you do want to file these types of cases, your case should be very, very strong and you should be very concerned about it. Even if it is a strong case, you have to be ready to fight that motion because it can be a very tough battle to go through, and I’m only mentioning this in context of this particular case because the judge didn’t even get that far; he just dismissed the case altogether.

MATT: Yeah, and you’re really hitting the listeners hard this week. You had your anti-SLAPP motion on Wednesday. On Monday, you have…

NASIR: What did I go over on Monday? Was it – oh, force majeure?

MATT: Yeah.

NASIR: Well, this is Law 101 here.

MATT: I think one time I asked you, you went off on something – not anti-SLAPP but some provision in a contract – I asked you to rank your ten favorite general miscellaneous provisions of a contract. Or I was like, rank them from least favorite to favorite, and you were like, “Integration clause,” or something like that.

NASIR: I’m sure that changes, depending upon my mood.

MATT: Yeah.

NASIR: Well, that’s Yelp, yeah.

MATT: You know, I talk to a lot of people with issues with Yelp and I just feel like, I mean, this is why I tell them sometimes, you know, we’re close to getting some, I think, major decisions that’ll kind of sway things but Yelp still has a lot of power in what they can do, unfortunately.

NASIR: I still think that the market will correct itself before the courts do because it is just becoming too much, you know? I’ve been boycotting Yelp. In fact, I had to use Yelp a little bit when I was overseas because there just wasn’t that many options.

MATT: Ah! You did, huh?

NASIR: No, I did, because I used – what was it called? Urbanspoon. I use Google Reviews and they didn’t have that much data, you know, when I was in Italy or Turkey or whatever. In the States, they’re still pretty good.

MATT: It’s funny that you, the person that hates Yelp, refuses to use it. I use it. When you go to Europe, you use it. When I went to Europe, I didn’t use it at all.

NASIR: Why didn’t you use it at all? You just experimented?

MATT: One, I didn’t have a phone so it was pretty difficult. Two, we had TripAdvisor.

NASIR: Actually, TripAdvisor is good, too.

MATT: TripAdvisor has a free… I don’t know. I should have told you. You probably had the thing but TripAdvisor has a free app where you can have – I don’t know how it works but you turn off – you can have it in airplane mode, no data used, and you can pull up a whole database of locations.

NASIR: Yeah, you can download stuff, right?

MATT: And it tells you how far away you are and it tells you how to get there. I’m like, “How is this doing it with no data?”

NASIR: Well, it gets the GPS, at least. Your GPS is on. I actually downloaded that the last day. It became useless but I figured that out.

MATT: I guess you’ll have to go again. Now you have a reason to go again.

NASIR: Yeah.

MATT: What was your favorite city that you went to, by the way?

NASIR: Probably Siena which was pretty nice.

MATT: Okay.

NASIR: I’d recommend.

MATT: Least favorite?

NASIR: Least favorite, Siena.

MATT: I forgot to mention, that’s the only spot you went to. I had a pretty terrible time in the Houston Airport before we left.

NASIR: Yeah, it’s pretty hard to pick a least favorite. I mean, there was really no low point.

MATT: Yeah, fair enough.

NASIR: Well, all right, thanks for joining us.

MATT: Yeah, keep it sound and keep it smart.

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Legally Sound | Smart Business covers the top business stories with a legal twist. Hosted by attorneys Nasir N. Pasha and Matt Staub of Pasha Law, Legally Sound | Smart Business is a podcast geared towards small business owners.

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