Last month, in a case of free speech vs. business reputation, a Virginia judge ordered Yelp (and Angie’s List) user Jane Perez to change negative reviews on the sites, which cast a contractor as a thief. The contractor, Christopher Dietz (of Dietz Development), sued Perez for $750,000 in damages in a defamation case, claiming to have lost business (as much as $300,000) because of her negative postings. You can read the lawsuit here (pdf).

The reviews in question indicate that Perez found her jewelry missing, and that “Dietz was the only one with the key.” One could see where a consumer might steer clear of a contractor with such a review. The problem, however, is that Perez has so far not been able to prove that Dietz stole her jewelry, and it’s basically one person’s word vs. the other’s. In addition to ordering her reviews changed, the injunction prevented Perez from being able to make similar claims on other sites.

Do you think Perez’s negative reviews should be allowed to remain online? Let us know in the comments.

The case goes on. However, since Perez was ordered to change her reviews, the ACLU and Public Citizen appealed the Fairfax County Judge’s decision in the name of free speech, and it went to the Supreme Court of Virginia, which overturned the temporary inunction, ruling:

“Upon further consideration whereof, the Court also finds that the preliminary injunction was not justified and that the respondents have an adequate remedy at law.

“This order shall be certified to the said circuit court.”

In other words, the court found that Perez shouldn’t have to change the reviews as long as they have yet to be proven libelous, and being sued for damages was enough. Whether or not Dietz gets his victory, remains to be seen, but in the meantime, it looks like Perez’s words will be allowed to remain in tact. If they are found to be libelous, they would be required to be removed from the sites. That just has to be proven first, and in the meantime, it may still be costing Dietz some business.

Interestingly, there is currently only one review listed for Dietz Development on Yelp, and it simply says: “I read about how these people sued a woman for giving them a negative review on Yelp. Scary stuff.”

The review is accompanied by a single star rating, and it is the first thing you see when you search ro “Dietz Development” in Google:

It’s unclear why Perez’s review is not currently showing up on Yelp, in light of recent legal events. It is also interesting that while Yelp is only showing this single review (which, by the way, really isn’t about the business itself), it has 8 other reviews marked “filtered,” which it does not show unless you click the link, which also requires you to enter a CAPTCHA. Reviews in this section are mixed. Some are clear responses to the lawsuit, like:

“They do shady work and then sue people if they post a negative review about them. Not cool.”

“I hired Dietz Development to build me a room/addition to my house for $20,000 and it would only take 2 weeks….somehow, they did a demolition job instead and dynamited everything, so now I have no house, just a hole in the ground! Plus the final bill was $30,000 (and it took them THREE weeks, not two!!!) Hey, at least my jewelry isn’t missing.”

One simply says, “Called to get a quote, the person on the phone was very rude, I wish I had gotten his name. I did not use them based on customer service.”

The other half of the reviews are quite positive, each with 5-star ratings. One user says, “Having SEEN the work this contractor does and MEETING him in the flesh, I can say you can expect top notch service from Dietz Development. Pay no mind to hateful hipsters who post negative reviews of a company they have no knowledge of.”

Then, there are 65 reviews that Yelp says have been removed for violating content guidelines or terms of service. I would imagine that a number of people have dropped by the page to say something in response to the suit.

Yelp’s filtering of reviews is automated. CEO Jeremy Stoppelman talks about it here. Here’s a video about it:

Public Citizen, which has maintained an archive of court documents related to this case, called the Supreme Court’s decision “a positive move for free speech on the Internet”. In a press release, the organization wrote:

Public Citizen argued that the contractor could get damages if, after a full trial, a jury agrees that Perez made false claims about him that meet the standard for libel. Because such a process has not occurred, forcing Perez to remove her comments amounted to censorship.

“The decision confirms the importance of not shutting down public discussion on the Internet just because someone doesn’t like what’s being talked about,” said Paul Alan Levy, an attorney for Public Citizen. “Review sites like Yelp are vehicles for the free flow of ideas by helping consumers make informed decisions on how to spend their hard-earned dollars.”

This is far from the first time a business has sued a consumer for negative reviews on sites like Yelp and Angie’s List. The outcomes have varied. As Bob Sullivan at NBC’s Red Tape points out, “An Oregon judge dismissed one lawsuit filed by a dentist earlier this year. Months earlier, a similar lawsuit filed by a church pastor was also dismissed. On the other hand, a case filed by a neurologist in Minnesota after negative comments was initially dismissed, but reinstated by a state appeals court earlier this year. And there are dozens of other ongoing cases — many involving health care — including one involving a Chicago plastic surgeon suing former patients for $100,000 after they criticized his work online.”

“Still, the threat of a libel lawsuit has become a more common tactic by businesses trying to dissuade consumers from making critical comments in public forums,” he adds. “A Red Tape reader in Ohio complained last month that she was threatened with such a lawsuit after she placed a sign on her front lawn criticizing a home alarm company.”

As far as review sites go, the companies behind them have protections against being held accountable for what users write in their policies, and in Section 230 of the Communications Decency Act.

Liz Gannes at All Things D shares this statement from Yelp:

Consumer freedom of speech provides an important public service, protected by law. Yelp provides a valuable contribution to this dialogue by providing a two-way platform for consumers to share their experiences and for businesses to respond to their customers. Courts have consistently ruled that consumers have the right to share their truthful experiences. As a result, businesses that choose to sue their customers to silence them rather than address their comments, rarely prevail and often bring additional unwanted attention to the original criticism.

To that point, TechDirt’s Mike Masnick makes an interesting point about Dietz’s suit: “Whether or not the original allegations were true, now he’s made it clear that he’s willing to sue over reviews as well. It seems like most people might see that and decide to hire a contractor who not only has good reviews, but doesn’t have a history of suing his customers over their online reviews.”

As we can see from the reviews currently on Yelp, consumers will see that he has sued.

Reactions to the Dietz/Perez case from WebProNews readers have been mixed, but as business owners, many have sided with Dietz. Online reputation is indeed a serious issue for businesses. There’s no denying Dietz has a valid point about that. Negative reviews can hurt businesses financially, and if there are false accusations about your business out there, you obviously want to get them cleared up. It will be interesting to see how swiftly the courts are able to get the whole case sorted out. Regardless of which side is right, Dietz stands to lose business as it goes on.

Do you think the courts got this one right so far? Let us know what you think in the comments.