Antitrust Law Daily Wrap Up, PRIVACY NEWS: Yelp appeals subpoena of anonymous posters, (Oct 9, 2013)

By Jody Coultas, J.D.

Attorneys for Yelp, Inc. argued today before a Virginia appellate court in Alexandria that a lower court should not have held the consumer review website operator in contempt when it refused to comply with a subpoena in Hadeed Carpet Cleaning, Inc. v. John Does, et al. Yelp argued in an appellate brief that the contempt order should be reversed, and the case should be remanded to require Hadeed to furnish evidence supporting its claimed right to identify anonymous posters to the website.

Yelp provides an Internet forum in which consumers can post reviews of businesses and describe their experiences with those businesses. Hadeed Carpet Cleaning filed suit against the authors of seven reviews on Yelp that alleged that Hadeed used lower prices to lure consumers but always found a way to charge more. Hadeed alleged that the seven defendants were actually a Hadeed competitor and that the posts were false and defamatory, and demanded their identifying information from Yelp.

Hadeed issued a subpoena seeking documents revealing identifying information about the authors of each of the challenged comments, as well as other information about those authors’ use of the Yelp website. A trial judge in Alexandria rejected Yelp’s objections to the subpoena and held Yelp in contempt for noncompliance.

Yelp argued that Hadeed failed to meet the well-accepted First Amendment test for identifying anonymous speakers. The First Amendment protects the right to speak anonymously and that right is fully applicable online. Because compelled identification touches on this right, justification for infringing that right requires proof of a compelling interest and restrictions must be narrowly tailored to serve that interest. The appeal noted that companies often use subpoenas to slow or stop Internet activities, rather than with the intent of obtaining a judicial remedy. In Swiger v. Allegheny Energy, 2006 WL 1409622 (E.D. Pa. May 19, 2006), a company filed a Doe lawsuit, obtained the identity of an employee who criticized it online, fired the employee, and then dismissed the lawsuit without obtaining any judicial remedy other than the removal of anonymity.

Many courts around the country have adopted the following four part standard in cases involving the identification of anonymous Internet posters: (1) the plaintiff (and sometimes the Internet Service Provider) must provide reasonable notice to the potential defendants and an opportunity for them to defend their anonymity before issuance of any subpoena; (2) the plaintiff must allege with specificity the speech or conduct that has allegedly violated its rights; (3) the court must review each claim in the complaint to ensure that it states a cause of action upon which relief may be granted based on each statement and against each defendant; and (4) the plaintiff must produce evidence supporting each element of its claims. Yelp argued that Virginia should adopt the test and that the trial court’s decision should be reversed based on the test.

Hadeed’s complaint failed to meet the four part test, according to Yelp’s brief. Yelp argued that the evidence presented by Hadeed did not support its claims against the John Doe defendants. A court should not identify an anonymous poster unless the plaintiff produces sufficient evidence supporting each element of its cause of action to show that it has a realistic chance of winning a lawsuit against that defendant.

Yelp also argued that it was not required to respond to a Virginia state court subpoena, and that Hadeed must get a subpoena from the California courts before Yelp, headquartered in San Francisco, can be ordered to comply. Virginia Code § 8.01-201 allows a foreign corporation authorized to do business in Virginia to be served through its registered agent. However, using a Virginia court to compel a foreign corporation to produce documents simply because it has a registered agent in the state runs counter to a long tradition under which the procedure for obtaining evidence from non-party foreign corporations is to obtain a commission to the courts of the corporation’s own jurisdiction, according to Yelp. Jurisdiction to enforce subpoenas directed to non-parties remains limited to individuals and companies subject to the state’s sovereign power. Because Yelp was not present in Virginia and the documents sought were not kept in Virginia, the Virginia courts lacked jurisdiction to issue the subpoena, it was argued.

This is Record No. 0116-13-4.

Attorneys: Paul Alan Levy (Public Citizen Litigation Group) for Yelp, Inc. Raigne C. Delaney (Bean, Kinney & Korman, P.C.) for Hadeed Carpet Cleaning, Inc.

Companies: Hadeed Carpet Cleaning, Inc.; Yelp, Inc.

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