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Thursday, January 17, 2013

Protecting Businesses from Online Defamation


One of the biggest public relations problems for businesses today is managing their integrity by fending off online defamation.  With the expansion of the Internet and the availability of a host of online reviewing services, blogs and websites devoted to various businesses, there has been a rapid increase in the consumers’ ability to post comments and reviews online.  The vast majority of these reviews are innocuous, sometimes flattering and usually an accurate description of the work or service performed.  However, with increasing frequency, some reviews are crossing the line into mean-spirited attacks.  While some of these reviews may possess a grain of truth, the overall impression from the review is extremely negative and intended to harm the targeted business.  Business that are the subjected to vitriolic reviews are required to go to great lengths to have the review removed from the Internet; and often, cannot succeed in their removal.

One of the first cases in the nation concerning business defamation is currently winding its way through the Virginia courts.  In the matter of Dietz Development, LLC v. Perez ( presently pending in the Fairfax County Circuit Court), the Virginia Supreme Court recently reversed the trial court’s grant of an injunction requiring Ms. Perez to remove a Yelp and Angie’s List posting that criticized Dietz Development’s work and claimed that workers stole items from her home.  This particular case began when Dietz Development sued Ms. Perez claiming that her posts were false and defamatory.  Assuming that Ms. Perez’s posts are false (truth is an absolute defense to defamation in Virginia), Dietz Development has been placed in an untenable position by the Virginia Supreme Court’s ruling.  The Virginia Supreme Court held, in part, that Dietz Development cannot obtain an injunction because there is an adequate remedy at law; specifically, Dietz Development can sue Ms. Perez for the damages caused by her false postings.  Of course, this ruling effectively eliminates any remedy that Dietz Development (and other similarly situated businesses) would have against online defamers.  These individuals making these online comments are likely to lack the financial resources to pay a significant defamation judgment and are likely to file bankruptcy in order to avoid paying the judgment.  Moreover, the post itself is what is causing the damage and will continue to do so even after the judgment has been entered.  These posts are the worst form of negative advertising as they will exist in perpetuity and cannot be forcibly removed through an injunction in Virginia.

One unique idea about how to handle these types of situations, from a legal perspective, is to convert the tort action of defamation into a breach of contract action.  Because internet speech is protected by 1st Amendment, it is important to convert the claim to a matter of contractual rights, and out of free speech issues.  Moreover, there needs to be an enforcement mechanism outside of the judicial process that allows a business to compel removal of the defamatory post. 

At Gross & Romanick, we have developed the outlines of a solution to this problem to protect our business clients from false statements made by disgruntled customers or former employees.  Our solution focuses on converting the issue from one of tort law (defamation) to one of contract law.  We also seek to remove the courts, as a state agency, from resolving the dispute and attempt to limit the courts to simply enforcing extra-judicial process.  However, our strategy can only be effective if prepared in advance of the posting.  It is therefore imperative that any business concerned about online defamation assume that every potential customer has the potential to post a defamatory comment and act accordingly.  Specifically, you should contact an attorney familiar with the issues and take appropriate steps to protect your company.

The attorneys at Gross & Romanick, P.C. are well versed in the issues of online defamation.  We have extensive experience handling defamation issues.  One of our attorneys holds an advanced degree in computer science and has been featured on Fox5 News as an expert in the field.  We have an aggressive and innovative approach to issues that allows us to find solutions where none had previously existed.  If you have concerns regarding online defamation, please contact our office at (703) 273-1400.