Can I Sue for Bad Reviews Against My Business?
Jan. 25, 2023
Since the introduction of the internet and smartphones, consumers have been able to research a business’s reputation before making a decision on whether to use their services or buy their products. In fact, it is said that 86 percent of all U.S. customers search online for reviews of a business before becoming a patron.
On the flip side of this are the people – customers – who post reviews on sites like Yelp. Sometimes these reviews can help make or break a business. While most reviews simply state a person’s honest opinion – good, bad, or indifferent – some reviewers overstep their legal boundaries and post defamatory comments. Worse, a competing business may pose as a customer and post a made-up review slamming a business.
Can the business owner fight back by taking the reviewer to court? In cases of actual defamation, that may be the logical route to take if other actions can’t get the review rescinded and exposed. But for reviewers who simply recap their experience and state an honest opinion about the product or service they acquired, there are laws that protect them.
If your business is suffering reputational damage by an online reviewer, or reviewers, in or around Minneapolis, Minnesota, contact the commercial and business litigation attorney at Engel Professional Association.
We will review the posts or comments online that are causing your firm reputational harm and advise you of your best options going forward, including a defamation lawsuit if warranted. Our firm proudly serves clients not only in Minneapolis and St. Paul but also across Minnesota, including Mankato, Maple Grove, St. Cloud, and Woodbury.
What Is Considered Defamatory?
A reputational damage lawsuit filed in 2019 in Florida made the news on “CBS This Morning.” In the review that brought the lawsuit, a customer at a veterinarian clinic waited and waited for a surgeon who never showed up. In the meantime, his dog died. The lawsuit cost Tom Lloyd $25,000 in legal fees even though his review was based on his actual experience.
What this lawsuit did to improve the reputation of the veterinarian clinic remains a big question. A lawsuit may drive even more customers away if it appears to be mean or unwarranted. On top of that, there are laws that protect reviewers. One such law is the Consumer Review Fairness Act (CRFA) passed in Congress in 2016, which is now overseen by the Federal Trade Commission (FTC). More on this statute below.
As mentioned in the opening, honest reviews and opinions are not generally legally actionable. The review must amount to defamation or be blatantly false to be open to a lawsuit. Defamation is a civil tort, not a crime per se, so a business that feels it has been defamed can file a civil lawsuit against the person or entity causing the defamation.
Unlike a personal defamation lawsuit in which the plaintiff needs only assert reputational damage, a business defamation lawsuit must show that the alleged defamation directly affected their financial interests, causing them loss of business and/or revenue.
So, what is defamation? Honest opinions and statements of fact are not defamation. Here are two examples to pinpoint the difference between opinion and defamation:
“The Downtown Diner serves the worst hamburger I’ve ever had.” – Opinion
“The hamburger at the Downtown Diner is filled with manure. It tastes so awful.” – Defamation if it’s not true
The CRFA and Anti-SLAPP Legislation
The Consumer Review Fairness Act, or CRFA, prohibits businesses from inserting what are called non-disparagement clauses in their contracts or terms and conditions. These clauses often threaten legal or other action against customers who post negative reviews, and their very basis is an attempt to stifle any comments about the business, its products, services, or personnel.
The CRFA can be cited as a defense by a customer whom a business attempts to harass or sue for an online comment. The customer can also report the situation to the Federal Trade Commission (FTC), which enforces the CRFA. The FTC can in turn issue a complaint against the business.
Some states also have Anti-SLAPP laws on the books. SLAPP means “Strategic Lawsuit Against Public Participation,” and Anti-SLAPP legislation is aimed at protecting free speech in the political process. Anti-SLAPP provisions have also been extended to protecting online commentary in some states. In Minnesota, however, its Anti-SLAPP legislation was ruled unconstitutional by the State Supreme Court in 2017.
When Should a Business Sue?
First, if your business is being subjected to negative online reviews, you need to consider whether there is a basis for these reviews. You may need to change your policies or whatever else the reviews keep hammering on.
You can also try to work with a reviewer, without resorting to threats, to get the negative post revised or even taken down. You should be proactive, in other words. You may even want to make it up to the customer for whatever bad experience they had.
However, in cases of defamation that is harming your business financially – remember, the tort has to be more than reputational but actually result in losses – you definitely should consider taking legal action. Sometimes even a demand letter from an attorney can help rectify the situation. If not, then a lawsuit might be in order.
In short, if your business is suffering because of negative reviews, consult with an attorney immediately to determine your best course of action.
Reliable and Knowledgeable Legal Assistance
Faced with reputational damage from online reviews, don’t resort to any tactic that may come back to harm you more than the reviews did. This means don’t bully or threaten the reviewers. Honest opinions are protected by the law. It’s only when a review strays from the facts or makes things up that it leaves the protected area of honest opinion.
In the Minneapolis-St. Paul area, bring your business reputational concerns to Engel Professional Association. We will assess what’s going on and advise you on how best to move forward and resolve the situation. If you are indeed losing customers and suffering financial losses because of false or clearly malicious statements, then a civil lawsuit may be in order.