Bad Yelp Review Results in Lawsuit for Virginia Woman

Dec. 7, 2012 -- For Jane Perez, the cost of posting a negative online review of her contractor could be very steep. It might also be costly for the contractor.

Perez, a Fairfax, Va., resident, is being sued for $750,000 in defamation charges by the contractor, Christopher Dietz, after posting negative reviews of his company's work on her house on the popular online review sites Yelp and Angie's List.

Unhappy with the work Dietz's company, Dietz Development LLC, did on her house, Perez took her anger to the web, alleging that the company had done damage to her home and that jewelry had disappeared, according to the Washington Post. On Wednesday, a judge in Fairfax County Virginia ruled in a preliminary injunction that certain accusations be deleted—and as of Thursday Perez's comments are no longer viewable on the Yelp page for Dietz Development.

Requests for comment from ABC News to Dietz and to Perez's lawyer, James Bacon, were not immediately returned.

Dietz isn't the first business owner to take legal action against a customer's online review. In 2010 a Chicago plastic surgeon sued three former female patients after they alleged that he had botched their breast surgeries.

The legalities of suing over online reviews are somewhat tricky, and there's not a great deal of legal precedent.

The actual online review websites--Yelp, Angie's List, TripAdvisor, etc.--are protected from lawsuit by the Communications Decency Act of 1996. Section 230 of the law protects online service providers from liability based on actions of third parties (a.k.a site users.) But the claims made by the reviewer can be subject to defamation charges, which vary based on state laws. In Virginia, where Dietz is bringing his suit, the state says that someone can be found guilty of defamation charges if he or she makes or even implies statements that are not factual that harm a person or businesses' reputation.

A legal challenge might be worth the business owners' time and trouble. In 2011 a study by Harvard Business School found a link between an uptick in a Yelp! review rating and an increase in revenue for restaurants. On average, the study found, a one star increase on Yelp leads to a 5 to 9 percent increase in revenue for that particular restaurant.

But there is also a potential backlash from taking legal action, as Dietz is likely finding out. Although Perez's negative review is gone from Dietz Development's Yelp Page, several poor ratings have posted on the page since the story of the lawsuit first published.

"Whoa! this company sued one of their customers for $750,000 over comments she made on Yelp," a reviewer listing their location as South Jordan, Utah, wrote next to a one star mark. "It makes me almost nervous to post this negative review."

"I learn from a Washington Post article and from the Public Citizen blog that this developer hires lawyers to sue his customers if they leave bad reviews," wrote another review in Arlington, Va., who also gave the company one star. "I therefore would be scared to use him, and do not recommend him."

And unlike the allegedly false claims from Perez, these negative reviews can't be ordered removed.