In 2012, a local rug cleaning company in Virginia, Hadeed Oriental Rug Cleaning (“Hadeed”), filed a defamation action against the authors of seven critical reviews it received on Yelp, indicating that the reviews falsely stated that Hadeed provided poor service.  Hadeed allegedly could not locate the reviewers in its customer database and believed them to be competitors, not customers. The dispute therefore implicates a set of facts atypical of your average, run-of-the-mill Yelp review.  But it nonetheless remains informative to service providers reviewed on Yelp as well as their reviewers.

Along with the complaint, Hadeed issued Yelp a subpoena to ascertain the reviewers’ identities. Yelp objected to the subpoena on a number of grounds including that Hadeed had not complied with Virginia’s law setting out the procedure for subpoenas to identify anonymous Internet users.  Towards the end of 2012, the circuit court enforced the subpoena, even imposing a $500 sanction and an award of $1,000 in attorneys’ fees to Hadeed. Yelp appealed.

Yelp’s appeal argued that the First Amendment required that Hadeed show merit on both the facts and the law before such a subpoena could be enforced.  But the Virginia appellate court’s decision declined to find that its unmasking statute was unconstitutional.

Yelp urged the court to adopt the standards in other states that require more than Virginia’s statute.  For example, Yelp pointed to a New Jersey case, (Dendrite Int’l v. Doe No. 3) where the standard articulated includes the requirement for a court to “balance the defendant’s First Amendment right to anonymous free speech against the strength of the prima facie case presented and the necessity for the disclosure . . . to allow the plaintiff to properly proceed.”  Yelp also pointed to a Delaware case (Doe v. Cahill), outlining a standard requiring the plaintiff to, among other things, support the defamation claim with facts sufficient to defeat a summary judgment motion.  Most jurisdictions follow Dendrite or Cahill.

By comparison, the Virginia statute can be satisfied, among other requirements, with a “legitimate, good faith basis” that the communications may be defamatory.  The court distilled its instructions to the following, in sum and substance.  A plaintiff must show that:

1. the plaintiff has given notice of the subpoena to the ISP, who in turn provided notice to the anonymous communicator;

2. either the communications are or may be “tortious” (here, defamatory), or the plaintiff has a “legitimate, good faith basis” for believing the same;

3. other “reasonable efforts to identify the anonymous communicator has proven fruitless;

4. the identity sought is central to advance the claim, related to the claim or defense, or directly relevant to the claim or defense. Here, the court must balance the interests of the anonymous communicator against the interests of the plaintiff.

5. there is no pending motion challenging the viability of the suit; and

6. the entity to whom the subpoena is addressed likely has responsive information.

In declining to adopt the Dendrite or Cahill standard, the Virginia appellate court found that there are many unmasking statutes around the country applying a spectrum of standards, and that Virginia’s statute was adopted considering authority from other states.  It noted, “[a]lthough the case law has coalesced around the basic framework of the Dendrite and Cahill standards, they are not the only courts to articulate a standard for identifying anonymous Internet speakers.”

Finally, with the exception of one concurring and dissenting judge who felt that Hadeed had not presented enough evidence that the reviewers were competitors not customers, the majority of the Virginia appeals court found that Hadeed had met the statute’s requirements and upheld the subpoena.

Since the decision, there has been some debate over its effect given the fact that the statute has limited jurisdiction. However, it does show that Yelp and other ISPs allowing online reviews and doing business in Virginia are not immune to having to give up information about their users.  As pointed out in case commentary such as law360, the approach of a small business suing their putative customers can be fraught with complication, and may be the reason there is little case law in this area.  There are many other approaches a business can take, including working with the site to get the post removed.