Online consumer reviews are the second most trusted form of advertising, second only to “earned media” such as word-of-mouth and recommendations from friends and family, according to a recent Nielsen report. Managing a company’s online reputation understandably is of prime importance, but one of the challenges of doing so is how best to mitigate damage from a negative consumer review or comment without further harming the brand. Overcoming this challenge is made more difficult by the tendency of some to pursue legal action as a first course of action rather than as a last resort. A growing body of case law should serve as a warning, however, to companies considering litigation to combat negative online traffic.
A strategic lawsuit against public participation (SLAPP) is a “meritless lawsuit filed primarily to chill the defendant’s exercise of First Amendment Rights,” as written in Paulus v. Bob Lynch Ford. The majority of states in the U.S. have enacted anti-SLAPP legislation. Early anti-SLAPP efforts focused on lawsuits involving communications made to influence a government action or outcome filed against nongovernmental individual or organizations. Anti-SLAPP laws are being applied increasingly in the context of commercial litigation involving claims of defamation, e.g., trade libel, or tortious interference with business relationship or expectancy.
Since there is no federal anti-SLAPP legislation, the laws that have been adopted are state specific and have varying language. Many state anti-SLAPP statutes have in common that the law protects statements on “matters of public interest” or “issues of public concern.” Consumer reviews are not protected expressly, which leaves open the question of whether a consumer review can be a matter of public interest or an issue of public concern that is protected under the law.
Two recent courts answered that question affirmatively. In Colocation America, Inc. v. Archie Garga-Richardson, Garga-Richardson was the plaintiff's customer until a dispute arose between the parties, and Garga-Richardson posted negative reviews of plaintiff’s services on the Internet, such as “[w]hen dealing or conducting business with Mr. Albert Ahdoot dba Colocation America, Inc ... and his related businesses or data centers, please exercise CAUTION AND CARE as Mr. Ahdoot is not a man of his word.”
In deciding the disputed issue of whether this posting involved an “issue of public interest,” the court reasoned that “[a] comment (whether fair or not) on the business practices and honesty of a server hosting provider is indisputably a form of consumer information, and it therefore concerns a matter of public interest.”
In the 2012 decision in AR Pillow Inc. v. Maxwell Payton, LLC, et al., , the court likewise held that defendants’ critical review of plaintiff’s product was protected under that state’s anti-SLAPP law. AR Pillow makes foam wedge pillows to combat infant reflux. The defendant was a reseller of plaintiff’s pillows. She stopped selling the product due to concerns over its design, and posted a negative review of the product online. Plaintiff sued for unfair competition, defamation and tortious interference.
In granting defendants’ motion to strike the state law claims under Washington’s anti-SLAPP statute, the court reasoned that defendants’ review "provides a general warning to consumers visiting her website regarding her concerns with the performance of another company's product," and thus it qualifies as a matter of “public concern.” Because defendants’ review qualified for anti-SLAPP protection, the court dismissed plaintiff’s defamation and tortious interference claims and awarded defendant its attorneys' fees plus Washington's statutory anti-SLAPP award of $10,000 per defendant, which totaled $30,000.
Combating negative consumer reviews through litigation creates a risk of further alienating consumers and damaging the brand by bringing more attention to the negative review and inviting a firestorm of further negative commentary. Anti-SLAPP laws, which have been enacted in a majority of states, should serve to further give a potential plaintiff pause when considering a civil action for negative online reviews and comments. In addition to the business risks, the legal risk can include early dismissal of the complaint, and, depending on the state and its version of anti-SLAPP legislation, an award of fees and costs to the successful defendant.