Is a Bad Review Defamation? Protecting Your Business Reputation Online.

Following my previous article about online defamation, business owners frequently ask me whether they can “sue” Facebook or Yelp or Google, etc., to get a negative review removed. Or whether they can “sue” the poster for “reputation damages.” This is especially common in the trucking industry, where Carrier411 hosts a platform that allows brokers and customers to review carriers. Often times, a dispute or a misunderstanding between a carrier and a customer leads to a “report” or a bad review on Carrier411 that causes frustration and may even result in lost business.

A negative review by itself is not always defamation. To win on a defamation claim in court, you need to prove: (1) a false and defamatory statement about the plaintiff; (2) unprivileged publication to a third party; (3) fault amounting to at least negligence; and (4) actionability per se or the existence of special harm.

What does this all mean for the business owner faced with a negative review?

  • First, a successful defamation claim requires a false and defamatory statement. This is the most commonly misunderstood element, but it is absolutely critical. A negative review – even if the business owner has a different side of the story, or does not agree with it – is not actionable unless it is actually false. A statement of opinion – even if negative – is not a false statement of fact because there is no such thing as a false opinion. That is an important difference, especially in the age of social media. A person may go on your restaurant website and freely post something like “I hate the atmosphere and I did not like the food here at all.” That is not defamation, even though it is a negative review. Rather, it is a statement of opinion. A good test is to ask: how am I going to prove that the statement is false? What types of evidence will I introduce to refute the “facts” that were posted? There is no evidence that you can introduce to refute a statement of opinion – in other words, the customer’s perception of atmosphere and the food is their own. If they did not like it, then it is their opinion, and they are entitled to it. Also, the statement must be defamatory, that is injurious to your business reputation. A statement that is false, but is not negative or otherwise critical of your business is not actionable. For example, if a review says “This restaurant is located in midtown Detroit,” when in fact the restaurant is downtown, the statement is false, but not defamatory.
  • Second, there must be unprivileged publication. “Publication” just means dissemination to others – meaning third parties. Of course, if something is posted online, it is published. “Unprivileged” means that the statement is not made in the context of a protected communication, such as a legal filing with the court, a police report, or some other type of special protected communication.
  • Third, the false statement must be made with at least negligence. That simply means that the person making the statement either knows that it is false or does not bother to try to find out before publishing. Even if a person publishes a false statement about your business, they may not be liable if they consider it true based on a reasonable inquiry.
  • Fourth, there must be an element of damages. In business cases, this element is usually satisfied automatically, as damages to business reputation are considered actionable per se. However, actual damages are still critical and must be proven – otherwise you may end up recovering only nominal damages. While punitive and exemplary damages, as well as attorney fees, are available under MCL 600.2911, there are no guarantees that they will be awarded. A case is always more persuasive if there are actual damages that are proximately caused by the negative post, review, or other published statement.

Even if you can prove the four elements, there are practical factors to consider before filing a lawsuit. Are you prepared to bear significant litigation costs – thousands or even tens of thousands of dollars? Are you prepared to invest time away from your business to prove your case? Never treat litigation as an investment opportunity because no business owner makes money paying their attorney and spending time in court.

The good news is that there are other options besides litigation that you can discuss with your attorney. Often times, an informal discussion with a dissatisfied customer can solve the issue. A cease-and-desist letter can be effective as well. If the potential damages are significant, pre-suit mediation may be the most cost effective option to resolve the dispute.

One final note – in Michigan, defamation claims must be brought within a year of the event. Other states may have different deadlines, but if you think you may have a claim, talk to an attorney sooner rather than later.

Dan Artaev is an experienced business attorney who advises a number of domestic and international businesses on various topics, including defamation. Email us or call us to set up your free initial consultation.

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