Appeal

Yelp Wins Fight to Post False and Defamatory Reviews

hassell v. bird

In reading the California Supreme Court’s decision in Hassell v. Bird, which just came out today, an expression by my father-in-law came to mind. He was a real, honest-to-goodness cowboy, and when asked how things were going, he would often answer, “Well, I’m just stepping in cow dung with one boot and knocking it off with the other.” [He didn’t actually use the word “dung.”]With today’s opinion, Yelp temporarily knocked off some dung, but stepped right back in it.

Hassell v. Bird involved an attorney by the name of Dawn Hassell and her firm the Hassell Law Group. Hassell’s April 2013 complaint arose out of Hassell’s legal representation of a client named Ava Bird for a brief period during the summer of 2012. The complaint alleged the following facts about that representation: Bird met with Hassell in July to discuss a personal injury she had recently sustained. On August 20, Bird signed an attorney-client fee agreement. However, on September 13, 2012, Hassell withdrew from representing Bird because they had trouble communicating with her and she expressed dissatisfaction with them. During the 25 days that Hassell represented Bird, Hassell had at least two communications with Allstate Insurance Company about Bird’s injury claim and notified Bird about those communications via e-mail. Hassell also had dozens of direct communications with Bird by e-mail and phone and at least one in-person meeting.

When legal representation was withdrawn, Bird had 21 months before the expiration of the statute of limitations on her personal injury claim, and had not lost any rights or claims relating to her injury. Sometimes things just don’t work out between an attorney and the client, but clients hate to be sent packing, even if they were being a horse’s behind the entire time. So long as the attorney fires the client with sufficient time for the client to seek new representation, there should no issue, but some clients behave like a jilted prom date.

According to Hassell, on January 28, 2013, Bird published a review on Yelp.com about her experience with Hassell (“the January 2013 review”). Hassell attempted to contact Bird by phone to discuss the publication, but she failed to return the call, so the firm sent her an e-mail “requesting she remove the factual inaccuracies and defamatory remarks from her Yelp.com written statement.” Still mad that she never got a corsage, as it were, in an e-mail response, Bird made derogatory comments about Dawn Hassell’s legal skills, refused to remove the January 2013 review, and threatened to post an updated review and to have another review posted by someone else.

True to her word, according to the complaint, on February 6, 2013, Bird or her agent created a “fake Yelp identity, using the pseudonym ‘J.D.,’ from Alameda,” to post another negative review about the Hassell firm on Yelp.com (“the February 2013 review”). Hassell believed that Bird was “J.D.” because Hassell never represented a client with the initials J.D., and because the February 2013 review was posted shortly after the January 2013 review and used similar language.

Hassell couldn’t take it anymore, so in their complaint, Hassell and her firm alleged causes of action against Bird for defamation, trade libel, false light invasion of privacy, and intentional infliction of emotional distress. In a fifth cause of action for injunctive relief, Hassell alleged that Bird’s ongoing wrongful acts were the direct and proximate cause of substantial pecuniary losses and irreparable injury to Hassell’s business reputation and good will, and that they were entitled to an injunction because there was no adequate remedy at law to compensate them for their continuing injuries. Hassell prayed for “injunctive relief prohibiting Defendant Ava Bird from continuing to defame plaintiffs as complained of herein, and requiring Defendant Ava Bird to remove each and every defamatory review published by her about plaintiffs, from Yelp.com and from anywhere else they appear on the internet.”

The Yelp Reviews about Hassell

The allegedly defamatory statements about Hassell that were posted on Yelp.com were attached as exhibits to the Hassell complaint. The January 2013 review was posted by a reviewer who used the name “Birdzeye B. Los Angeles, CA.” It was identified by Yelp as one of “10 reviews for The Hassell Law Group” that Yelp used to give Hassell an overall star rating of four and one-half out of five stars. Birdzeye B., however, gave Hassell a rating of one out of five stars, and stated that the law firm did not even deserve that.

The reviewer’s critique was directed at both the Hassell firm and Dawn Hassell personally, who was accused of “ma[king] a bad situation worse for me,” and reneging on her obligations because “her mom had a broken leg” and because “the insurance company was too much for her to handle.” The review also stated: “the hassell law group didn[’]t ever speak with the insurance company either, neglecting their said responsibilities and not living up to their own legal contract! nor did they bother to communicate with me, the client or the insurance company AT ALL . . . .”

The February 2013 review was posted by a reviewer who used the name “J.D. Alameda, CA.” It ended up as one of those filtered Yelp reviews that you don’t see unless you click on the link that takes you to the filtered reviews. These reviews are not included in the overall “star rating” average. The user who posted the February 2013 review gave Hassell a one star rating and provided the following information: “Did not like the fact that they charged me their client to make COPIES, send out FAXES, POSTAGE, AND FOR MAKING PHONE CALLS about my case!!! Isn’t that your job. That’s just ridiculous!!! They Deducted all those expenses out of my settlement.” (Original capitalization.)

The Default Judgment

On April 17, 2013, Hassell served Bird with the summons and complaint, but Bird never answered, and on June 18, 2013 Hassell took her default, which was entered and filed on July 11, 2013. [A person who has knowingly posted a fake review on Yelp will typically respond in one of two ways. Because they know they can’t prove the false statements they made, they will just ignore the complaint, as Bird did, or cut their losses and take down the false review.]

On November 1, 2013, Hassell filed a notice of hearing on their application for default judgment and request for injunctive relief. The application was supported by a “plaintiffs’ summary of the case,” which provided additional details about matters alleged in the complaint, and also described a third review that Bird allegedly posted on Yelp.com on April 29, 2013 (“the April 2013 review”). Hassell’s case summary also argued the merits of its case.

Hassell and her firm were concerned that a default judgment might somehow deprive them of the ability to obtain injunctive relief, thinking that injunctive relief would require a trial or hearing. They needn’t have been concerned. I routinely obtain injunctive relief on default judgments. But I will never criticize an abundance of caution, and in support of its request for injunctive relief, Hassell argued that “once the trier of fact has determined [Bird] made defamatory statements,” the court would have authority to issue an injunction, and that if the same showing could be made at a prove-up hearing, a comparable injunction would be proper. Hassell reasoned that denying injunctive relief after a default prove-up hearing would mean a plaintiff can be forced to suffer defamatory harm so long as the defendant refuses to answer the complaint. Hassell requested that the injunction contain a provision requiring Yelp to remove the defamatory reviews in the event that Bird failed to do so, which was likely in light of her history of “flaunting” California’s court system.

Through declarations from Dawn Hassell and another Hassell attorney named Andrew Haling, Hassell filed extensive documentary evidence, including Bird’s attorney-client agreement, correspondence between Hassell and Bird, evidence of damages, and comments about Hassell that were posted on Yelp.com., including the April 2013 review that Hassell identified in its case summary as another defamatory statement by Bird.

The April 2013 review was posted by “Birdseye B. Los Angeles, CA, and was identified by Yelp as one of “11 reviews for The Hassell Law Group” that Yelp used to calculate Hassell’s overall star rating. The reviewer described his or her statements as an update to Birdseye B.’s earlier review and then stated that Dawn Hassell had filed a lawsuit “against me over this review,” and that she “tried to threaten, bully, intimidate, [and] harass me into removing the review!” Birdseye B. also stated: “the staff at YELP has stepped up and is defending my right to post a review. once again, thanks YELP! . . .”

On January 14, 2014, a default prove-up hearing was held before the Honorable Donald Sullivan. Dawn Hassell and Andrew Haling appeared on behalf of Hassell and there was no appearance by Bird. Dawn Hassell was sworn and testified, and, after considering all the evidence, the court entered judgment against Bird. Hassell was awarded general and special damages and costs totaling $557,918.75, but was denied punitive damages. The Bird judgment also awarded Hassell injunctive relief pursuant to the following provisions:

“Plaintiffs’ Request for Injunctive Relief is Granted. Defendant AVA BIRD is ordered to remove each and every defamatory review published or caused to be published by her about plaintiffs HASSELL LAW GROUP and DAWN HASSELL from [Y]elp.com and from anywhere else they appear on the internet within 5 business days of the date of the court’s order.”

“Defendant AVA BIRD, her agents, officers, employees or representatives, or anyone acting on her behalf, are further enjoined from publishing or causing to be published any written reviews, commentary, or descriptions of DAWN HASSELL or the HASSELL LAW GROUP on Yelp.com or any other internet location or website.”

And here is the big one, and the reason this case went all the way to the California Supreme Court:

“Yelp.com is ordered to remove all reviews posted by AVA BIRD under user names ‘Birdzeye B.’ and ‘J.D.’ attached hereto as Exhibit A and any subsequent comments of these reviewers within 7 business days of the date of the court’s order.”

On January 15, 2014, Hassell served Bird with notice of entry of judgment. Bird did not appeal, and the judgment became final on March 16, 2014. [Can you imagine just sitting back and doing nothing about a $557,918.75 judgment that was obtained against you? Defendants sometimes feel, rightfully so, that they are so without assets as to be judgment proof, but with a renewal a judgment is good for 20 years. I would hate to bet that in the next 20 years I’ll never have wages or assets that can be seized. But I digress.]

Hassell’s Efforts to Enforce the Judgment

On January 15, 2014, Hassell hand-delivered a copy of the Bird judgment to an attorney employed by Yelp named Laurence Wilson, along with a letter requesting that Yelp comply with the judgment. On January 28, Hassell caused the judgment to be personally served on Yelp’s national registered agent for service of process. In a letter served with the judgment, Dawn Hassell highlighted the following circumstances: Yelp had failed to comply with the court deadline for removing Bird’s defamatory reviews; Laurence Wilson had not replied to Dawn Hassell’s January 15 letter or returned phone calls from Hassell; and “Yelp, Inc.’s non-compliance with the court’s order will become the subject of contempt proceedings and a further lawsuit against Yelp if Yelp refuses to comply with the judgment as my business is being further damaged.”

Yelp’s senior director of litigation, Aaron Schur. Yelp responded to Dawn Hassell in a February 3, 2014 letter. Schur stated that Yelp objected to the judgment “to the extent directed at Yelp itself” for three reasons: (1) Yelp was a nonparty to the litigation; (2) Yelp was immune from liability for it publication of a review; and (3) Hassell failed to properly serve Bird or prove its defamation claims against her. Schur also informed Hassell that Yelp had made the decision not to comply with the judgment, stating: “the judgment and order are rife with deficiencies and Yelp sees no reason at this time to remove the reviews at issue. Of course, Yelp has no desire to display defamatory content on its site, but defamation must first be proven.” Schur stated that Yelp would “revisit its decision” if it was presented with stronger evidence. He also warned that Hassell’s “threats” of litigation against Yelp were not well taken because Yelp would file a motion to dismiss and recover attorney fees under the anti-SLAPP law, “as it has done in the past in similar cases.”

In an April 30, 2014 letter to Schur, Dawn Hassell asked that Yelp reconsider its position in light of the facts that Bird had refused to comply with the judgment, and, as a practical matter, she was judgment proof because the award against her was uncollectable. Dawn Hassell also objected to a recent decision by Yelp to recommend one of Bird’s defamatory reviews. As Hassell explained, “I also take issue with the fact that Yelp has now highlighted these defamatory reviews by user ‘Birdzeye B.’ (already confirmed to be Defendant Bird) by listing them as ‘Recommended Reviews,’ so other Yelp visitors see these defamatory reviews first, above more recent, honest, positive reviews.”

Finally, Dawn Hassell advised Schur of her plan to file a motion to enforce the judgment. She reminded him that she had sought Yelp’s assistance before initiating litigation, but was informed by Yelp that her only recourse was against Bird. However, after obtaining a judgment against Bird, it was now clear that the only remedy available to Hassell was to have Yelp take down the reviews. Ms. Hassell stated that if Yelp believed the injunction was too broad, she was “willing to discuss stipulating with you to terms pertaining to Yelp that would be more agreeable, for settlement purposes only, and before the motion to enforce the court’s order is heard.”

On May 23, 2014, Yelp filed a notice of motion and motion to set aside and vacate the Bird judgment pursuant to section 663 on the “grounds that the legal basis for the decision is not consistent with or supported by the facts or applicable law.” In its supporting memorandum, Yelp alleged it had standing to bring the motion as an “aggrieved party,” even though it was a nonparty in the action. Yelp then argued the trial court was required to vacate the Bird judgment because: (1) Hassell’s failure to name Yelp as a party defendant violated Yelp’s right to due process; (2) Yelp was immune from liability for posting Bird’s reviews pursuant to the CDA, 47 United States Code section 230; (3) the judgment violated section 580 by awarding relief that Hassell did not request in their complaint; and (4) the judgment subverted Bird’s First Amendment rights by suppressing speech that Hassell failed to prove was defamatory.

On August 27, 2014, the Honorable Ernest H. Goldsmith (after some issues about who should hear the motion) held a hearing on Yelp’s motion to vacate, accepted evidence, entertained arguments and then took the matter under submission. On September 29, 2014, the court filed an order denying Yelp’s motion to set aside and vacate the judgment (“the September 2014 order”). The September 2014 order contains two sets of findings.

First, regarding the judgment itself, the court found that Judge Sullivan (1) conducted a court trial, (2) made a finding that Bird’s postings about Hassell on Yelp.com were defamatory; (3) granted injunctive relief against Bird which required her to remove her defamatory reviews from Yelp.com; and (4) also ordered nonparty Yelp to remove the defamatory reviews.

Judge Goldsmith then concluded that, under California law, an injunction can be “applied to” a nonparty by virtue of its relationship to an enjoined party. (Citing Ross v. Superior Court (1977) 19 Cal.3d 899, 906 (Ross).)

The second set of findings in the September 2014 order pertained to “Hassell’s contention that Yelp is aiding and abetting Bird’s violation of the injunction.” The court found that the evidence showed that (1) Yelp highlighted Bird’s defamatory reviews on Yelp.com by explicitly recommending one of her reviews, and also by refusing to take account of a “litany” of favorable reviews that users had posted when it calculated a “star rating” for the Hassell law firm; (2) Yelp’s motion to vacate was not limited to its own interests, but sought to vacate the entire Bird judgment by making arguments that pertained only to the propriety of the judgment against Bird; and (3) Yelp refused to acknowledge or abide by a judicial finding that Bird’s reviews are defamatory notwithstanding that its own terms of service require Yelp.com users to agree not to post a “fake or defamatory review. . . .” Based on these findings, the court concluded that “Yelp is aiding and abetting the ongoing violation of the injunction and that Yelp has demonstrated a unity of interest with Bird.” [See? The judge concluded that these fake reviews violate Yelp’s own terms of service. Why is Yelp fighting to preserve fake reviews that violate its own terms of service?]

Preliminary Considerations

In its opening brief on appeal, Yelp requested that the Appellate Court “reverse and vacate the trial court’s judgment.” Well, that was a problem, because Yelp was not a party to the action, and certainly had no standing to reverse the entire judgment as to Bird. But through a very long procedural discussion, the Court of Appeal found a way to give Yelp standing to challenge at least the injunctive ruling.

It found that Yelp was aggrieved by the removal order directing Yelp to remove Bird’s defamatory reviews from Yelp.com, and that Yelp became a party of record in the case by filing a nonstatutory motion to vacate the allegedly void order within a reasonable time after entry of the judgment; and, therefore, Yelp has standing to appeal the removal order provision contained in the Bird judgment.

Could Yelp be ordered to remove the review?

The substantive issue raised by the appeal was whether the trial court had the legal authority to make the removal order directing Yelp to remove Bird’s defamatory reviews from Yelp.com.

Yelp contended that Judge Sullivan did not have that authority because the removal order (1) violates due process; (2) constitutes a prior restraint of speech; and (3) is barred by the CDA.

Due Process

Yelp contended that the removal order was barred by due process because the trial court did not afford Yelp notice or a hearing before the order was entered. There were two distinct prongs to Yelp’s due process theory: first, that the trial court could not order Yelp to implement the injunction because it was not a party in the defamation action [so Yelp wants to be sued?]; and second, that prior notice and a hearing were mandatory because the removal order impinged on Yelp’s First Amendment right to “host” Bird’s reviews.

An Injunction Can Run Against a Nonparty

To this argument, the Court of Appeal concluded that an injunction is obviously a personal decree. It operates on the person of the defendant by commanding him to do or desist from certain action. Indeed it may deprive the enjoined parties of rights others enjoy precisely because the enjoined parties have abused those rights in the past. Thus, it is well established that injunctions are not effective against the world at large.

On the other hand, the law recognizes that enjoined parties may not nullify an injunctive decree by carrying out prohibited acts with or through nonparties to the original proceeding. Thus, an injunction can properly run to classes of persons with or through whom the enjoined party may act. However, “a theory of disobedience of the injunction cannot be predicated on the act of a person not in any way included in its terms or acting in concert with the enjoined party and in support of his claims.” (Planned Parenthood Golden Gate v. Garibaldi (2003) 107 Cal.App.4th 345, 352-353; see also People v. Conrad (1997) 55 Cal.App.4th 896, 902; In re Berry (1968) 68 Cal.2d 137, 155-156; Berger v. Superior Court (1917) 175 Cal. 719, 721.)

The Court of Appeal held that these settled principles undermine Yelp’s theory that the trial court was without any authority to include a provision in the Bird judgment which ordered Yelp to effectuate the injunction against Bird by deleting her defamatory reviews. As Judge Goldsmith observed in the order denying Yelp’s motion to vacate, our Supreme Court has explicitly confirmed that injunctions can be applied to nonparties in appropriate circumstances. “In matters of injunction . . . it has been a common practice to make the injunction run also to classes of persons through whom the enjoined person may act, such as agents, servants, employees, aiders, abettors, etc., though not parties to the action, and this practice has always been upheld by the courts, and any of such parties violating its terms with notice thereof are held guilty of contempt for disobedience of the judgment.” (Ross, supra, 19 Cal.3d at p. 906.)

Yelp contended that the rule permitting a court to enforce an injunction against a nonparty is limited to situations in which “a group or organization has been enjoined, so as to prevent the group’s individual members who are not named in the injunction from acting on behalf of that group.” As support for this claimed limitation, Yelp cited the case People ex rel. Gallo v. Acuna (1997) 14 Cal.4th 1090 (Acuna). The issue in Acuna was whether designated members of a criminal street gang who were named defendants in a public nuisance action could be subject to an injunction because of the documented activities of the group to which they belonged. In approving such an injunction, the Acuna court did not impose any restriction on a court’s authority to issue an injunction which runs also to a nonparty. Nor did it even consider that question.

Yelp ineffectually cited two additional cases to support its contention that the trial court could not order a nonparty to effectuate the injunction against Bird: Fazzi v. Peters (1968) 68 Cal.2d 590 (Fazzi) and Tokio Marine & Fire Ins. Corp. v. Western Pacific Roofing Corp. (1999) 75 Cal.App.4th 110, 120-121 (Tokio Marine).

Fazzi was a damages action against a partnership. The appellant was an alleged partner who had been served with process but had not been made a party to the underlying action against the partnership. Neither the appellant, nor his alleged co-partner, nor the partnership appeared in the action, and a judgment of default was entered holding each of them individually and doing business as a co-partnership jointly and severally liable for money damages in the approximate amount of $49,000. The Fazzi court reversed the default judgment against the appellant, applying “the general rule that a judgment may not be entered either for or against a person who is not a party to the proceeding, and any judgment which does so is void to that extent.” (Fazzi at pp. 594-595, 598.)

Tokio Marine involved a lawsuit to determine fault for a fire as between a general contractor and a roofing contractor. After judgment was entered in favor of the roofing contractor, the trial court summarily granted the roofing contractor’s motion to amend the judgment to add the general contractor’s insurer as an additional judgment debtor. On appeal, the Tokio Marine court reversed the judgment against the insurer, finding that the insurer was not a party in the action or an alter ego of the original defendant. Furthermore, the court found that the summary addition of the insurer as an additional judgment debtor violated due process. (Tokio Marine at pp. 120-121.)

The Court of Appeal concluded Fazzi and Tokio Marine are inapposite because both cases involved money judgments that were entered against nonparties to the litigation. Here, by contrast, the damages portion of the judgment was entered solely against Bird. Neither Fazzi nor Tokio Marine address whether an injunction imposed against a party can be enforced against a nonparty.

Yelp argues in the alternative that, even if the injunction against Bird could properly be enforced against a nonparty like Yelp, the evidence in this case does not “support the theory that Yelp was somehow ‘aiding and abetting’ Bird’s violation of the injunction.” This issue was a major dispute below. But as we have already discussed, it has no bearing on the question whether the trial court was without power to issue the removal order in the first instance. The authority summarized above establishes that a trial court does have the power to fashion an injunctive decree so that the enjoined party may not nullify it by carrying out the prohibited acts with or through a nonparty to the original proceeding.

Yelp’s First Amendment Rights

Yelp’s second due process theory was that the First Amendment protects Yelp’s right “to distribute the speech of others without an injunction,” and “Yelp simply cannot be denied those rights without notice of the proceedings and an opportunity to be heard.” To support this argument, Yelp cited Marcus v. Search Warrants. (1961) 367 U.S. 717 (Marcus). [Defamatory speech is never protected, so I don’t think this argument is going to get very far.]

In Marcus, wholesale distributors of books and magazines alleged that Missouri’s procedure for seizing allegedly obscene publications had been applied to them in a manner which violated their due process rights. The evidence in that case showed that a police officer filed complaints stating that each appellant kept “obscene” publications for sale; a circuit judge conducted an ex parte hearing on the complaints; and, without reviewing the allegedly obscene material, the judge issued warrants authorizing any officer in the state to search for and seize obscene materials from appellants’ premises. The warrants were subsequently executed by different officers who seized all publications which, in their judgment, were obscene. Thirteen days later, appellants were afforded hearings on their motions to quash the search warrants, suppress evidence, and return their property. More than two months after the materials were seized, the circuit judge issued an opinion finding that 180 of the 280 seized items were not obscene and were to be returned to appellants. (Marcus at pp. 723-724.)

The United States Supreme Court held that, as applied to the Marcus appellants, Missouri’s procedure lacked due process safeguards to assure that non-obscene materials were afforded First Amendment protection. (Marcus, supra, 367 U.S. at p. 731.) “Putting to one side” the fact that appellants were not afforded an opportunity to challenge the complaints filed against them prior to execution of the warrants, the court highlighted several flaws in the Missouri procedure, including that the judge issued a warrant based on cursory allegations of a single officer without actually reviewing any of the allegedly obscene material; the warrants gave officers broad discretion to use individual judgment to determine what material was obscene; the officers were provided with no “guide to the exercise of informed discretion”; and two-thirds of the seized publications which were not obscene were withheld from the market for over two months. These circumstances demonstrated that Missouri’s procedure lacked sufficient safeguards to justify conferring discretion on law enforcement to seize allegedly obscene materials: “Procedures which sweep so broadly and with so little discrimination are obviously deficient in techniques required by the Due Process Clause of the Fourteenth Amendment to prevent erosion of the constitutional guarantees.” (Id. at p. 733, fn. omitted.)

The Court of Appeal disagreed that Marcus supported Yelp’s due process claim for several reasons. First, Yelp’s factual position in this case is unlike that of the Marcus appellants, who personally engaged in protected speech activities by selling books, magazines and newspapers. In order to claim a First Amendment stake in this case, Yelp characterized itself as a publisher or distributor. But, at other times Yelp portrays itself as more akin to an Internet bulletin board – host to speakers, but in no way a speaker itself.

Of course, Yelp may play different roles depending on the context. However, in this context it appeared to the Court of Appeal that the removal order does not treat Yelp as a publisher of Bird’s speech, but rather as the administrator of the forum that Bird utilized to publish her defamatory reviews.

Second, even if Yelp’s operation of an interactive website is construed as constitutionally protected speech by a distributor, Marcus does not support Yelp’s broad notion that a distributor of third party speech has an unqualified due process right to notice and a hearing before distribution of that speech can be enjoined. In Marcus, the use of an ex parte hearing to secure search warrants was only one of many problems with the Missouri procedure which culminated in the ruling that appellants’ due process rights were violated. (Marcus, supra, 367 U.S. at pp. 731-733.) Indeed, in a subsequent case in which Marcus was distinguished, the Supreme Court clarified that “[t]his Court has never held, or even implied, that there is an absolute First or Fourteenth Amendment right to a prior adversary hearing applicable to all cases where allegedly obscene material is seized.” (Heller v. New York (1973) 413 U.S. 483, 488.)

Third, and crucially, the Court of Appeal held that the due process problems explored in Marcus and its progeny pertain to attempts to suppress speech that is only suspected of being unlawful. Here, we address the very different situation in which specific speech has already been found to be defamatory in a judicial proceeding. Yelp could not cite any authority which conferred a constitutional right to a prior hearing before a distributor can be ordered to comply with an injunction that precludes re-publication of specific third party speech that has already been adjudged to be unprotected and tortious.

The Constitutional Bar Against Prior Restraints

Yelp also contended the trial court was without authority to issue the removal order because it constitutes a prior restraint of speech.

1. Applicable Law

“An order prohibiting a party from making or publishing false statements is a classic type of an unconstitutional prior restraint. ‘While [a party may be] held responsible for abusing his right to speak freely in a subsequent tort action, he has the initial right to speak freely without censorship.’” (Evans v. Evans (2008) 162 Cal.App.4th 1157, 1167-1168.) However, the constitutional bar against prior restraint of speech “does not apply to an order issued after a trial prohibiting the defendant from repeating specific statements found at trial to be defamatory. . . .” (Id. at p. 1168, citing Balboa Island Village Inn, Inc. v. Lemen (2007) 40 Cal.4th 1141, 1155-1156, italics omitted (Balboa Island).)

In Balboa Island, a restaurant owner filed a defamation action against a vocal critic of the restaurant. After a bench trial, the court issued a permanent injunction which enjoined the defendant from engaging in various activities including repeating specifically identified defamatory statements about the plaintiff to third parties. The California Supreme Court held that the injunction was overbroad in some respects, but that “a properly limited injunction prohibiting [the] defendant from repeating to third persons statements about the [restaurant] that were determined at trial to be defamatory would not violate [the] defendant’s right to free speech.” (Id. at p. 1146.)

The Balboa Island court began with the foundational premise that freedom of speech is a fundamental right protected against invasion by state action by both the First and Fourteenth Amendments. (Balboa Island, supra, 40 Cal.4th at p. 1147.) But the court also recognized that this right is not absolute: “[T]here are categories of communication and certain special utterances to which the majestic protection of the First Amendment does not extend because they ‘are no essential part of any exposition of ideas, and are of such slight social value as a step to truth that any benefit that may be derived from them is clearly outweighed by the social interest in order and morality.’”

Libelous speech has been held to constitute one such category. Because defamation is not protected by the First Amendment, the Balboa Island court concluded, “an injunction issued following a trial that determined that the defendant defamed the plaintiff that does no more than prohibit the defendant from repeating the defamation, is not a prior restraint and does not offend the First Amendment.” (Balboa Island, 40 Cal.4th at p. 1148.) As the court explained, an injunction that is entered following a determination at trial that the enjoined statements are defamatory does not constitute a prohibited prior restraint of expression because “[o]nce specific expressional acts are properly determined to be unprotected by the [F]irst [A]mendment, there can be no objection to their subsequent suppression or prosecution.” (Id. at pp. 1155-1156.)

2. Analysis

The removal order directed at Yelp states: “Yelp.com is ordered to remove all reviews posted by AVA BIRD under user names ‘Birdseye B.’ and ‘J.D.’ attached hereto as Exhibit A and any subsequent comments of these reviewers within 7 business days of the date of the court’s order.”

Under the authority of Balboa Island, the trial court had the power to make the part of this order requiring Yelp to remove the three specific statements that were set forth in the exhibit A attachment to the Bird judgment because the injunction prohibiting Bird from repeating those statements was issued following a determination at trial that those statements are defamatory. However, to the extent the trial court additionally ordered Yelp to remove subsequent comments that Bird or anyone else might post, the removal order was deemed to be an overbroad prior restraint on speech. Therefore, the Court of Appeal remanded the matter back to the trial court with directions that it modify the removal order consistent with this limitation.

Yelp contended that limiting the scope of the removal order to statements that have already been adjudged as defamatory does not cure the constitutional problem because the findings that Bird’s reviews of Hassell were defamatory were not made by a jury. According to Yelp, “the Supreme Court in Balboa Island carefully limited its narrow holding to judgments entered after a jury trial . . . .” (Original italics.)

Still plugging away, Yelp argued that even if Balboa Island applies in this context, the removal order is impermissibly overbroad because Hassell failed to actually prove that Bird wrote the February 2013 review posted under the name “J.D. Alameda, CA,” or the April 2013 review posted under the name “Birdseye B. Los Angeles, CA.” That argument made no sense whatsoever, because the trial court did make a final judicial determination that Bird posted those reviews and, for reasons we have already discussed, the Court of Appeal properly concluded that Yelp did not have standing to challenge that aspect of the judgment.

Yelp’s Immunity from Tort Liability

Finally, Yelp contended that the removal order was barred by section 230 of the CDA, 47 United States Code section 230 (section 230). According to Yelp, section 230 prohibits courts “from ordering website providers like Yelp to remove content provided by third parties.”

1. Applicable Law

Section 230 states, in pertinent part: “No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.” (§ 230(c)(1).) “No cause of action may be brought and no liability may be imposed under any State or local law that is inconsistent with this section.” (§ 230(e)(3).)

Section 230 was enacted as an amendment to the CDA. Originally, the primary objective of the CDA was to restrict the exposure of minors to indecent materials on the Internet. However, through the addition of section 230, the CDA acquired a second objective of furthering First Amendment and e-commerce interests on the Internet. (Batzel v. Smith (9th Cir. 2003) 333 F.3d 1018, 1027-1028.)

Accordingly, section 230 has been construed broadly to immunize “providers of interactive computer services against liability arising from content created by third parties.” (Fair Housing Coun., San Fernando v. Roommates.com (9th Cir 2008) 521 F.3d 1157, 1162, fn. omitted; see also Sikhs for Justice “SFJ”, Inc. v. Facebook, Inc. (N.D.Cal. 2015) 2015 U.S. Dist. LEXIS 154716.) As elucidated in a leading decision by the Fourth Circuit, section 230 also “precludes courts from entertaining claims that would place a computer service provider in a publisher’s role. Thus, lawsuits seeking to hold a service provider liable for its exercise of a publisher’s traditional editorial functions – such as deciding whether to publish, withdraw, postpone or alter content – are barred.” (Zeran v. America Online, Inc. (4th Cir. 1997) 129 F.3d 327, 330 (Zeran).)

The justification for this broad grant of immunity is that it (1) encourages Internet service providers to self-regulate the dissemination of offensive material over their services, and (2) avoids a chilling effect on Internet free speech that would result from exposing companies to tort liability for potentially harmful messages they do not create but that are delivered by using their service. California courts have also construed section 230 to afford interactive service providers broad immunity from tort liability for third party speech. (Barrett v. Rosenthal (2006) 40 Cal.4th 33 (Barrett); Delfino v. Agilent Technologies, Inc. (2006) 145 Cal.App.4th 790, 802-804 (Delfino); Gentry v. eBay, Inc. (2002) 99 Cal.App.4th 816, 830; Kathleen R. v. City of Livermore (2001) 87 Cal.App.4th 684 (Kathleen R.).)

In Barrett, the California Supreme Court followed Zeran and its progeny. Concluding that section 230 confers “broad immunity against defamation liability for those who use the Internet to publish information that originated from another source,” the Barrett court held that the statute “prohibits ‘distributor’ liability for Internet publications.” (Barrett, at pp. 39-40.) The court expressed concern about the “disturbing implications” of the “prospect of blanket immunity for those who intentionally redistribute defamatory statements on the Internet.” (Id. at p. 63.) However, the court observed that, “[a]t some point, active involvement in the creation of a defamatory Internet posting would expose a defendant to liability as an original source.” (Id. at p. 60, fn. 19.) Aside from that limitation, the court reasoned that applying section 230 to exempt Internet intermediaries from defamation liability for republication furthers congressional intent and that any expansion of tort liability beyond the originator of the defamatory Internet publication “must await congressional action.” (Id. at p. 63.)

Thus, “[t]here are three essential elements that a defendant must establish in order to claim section 230 immunity” from California tort liability. (Delfino, supra, 145 Cal.App.4th at pp. 804.) “They are ‘(1) the defendant [is] a provider or user of an interactive computer service; (2) the cause of action treat[s] the defendant as a publisher or speaker of information; and (3) the information at issue [is] provided by another information content provider.’” (Id. at p. 805.)

2. Analysis

Yelp argued the authority summarized above establishes that the removal order is void. The Court of Appeal disagreed. The removal order did not violate section 230 because it did not impose any liability on Yelp. In this defamation action, Hassell filed their complaint against Bird, not Yelp; obtained a default judgment against Bird, not Yelp; and was awarded damages and injunctive relief against Bird, not Yelp. These circumstances distinguished the present case from Yelp’s authority, all cases in which causes of action or lawsuits against internet service providers were dismissed pursuant to section 230. (See, e.g., Barnes v. Yahoo!, Inc. (9th Cir. 2009) 570 F.3d 1096, 1098 [CDA “protects an internet service provider from suit” for failing to remove material from its Web site that was harmful to the plaintiff]; Carafano v. Metrosplash.com. Inc. (9th Cir. 2003) 339 F.3d 1119, 1125 [“despite the serious and utterly deplorable consequences that occurred in this case, we conclude that Congress intended that service providers such as Matchmaker be afforded immunity from suit’]; Goddard v. Google, Inc. (N.D.Cal. 2009) 640 F.Supp.2d 1193 [dismissing complaint against Internet service provider for allegedly fraudulent advertisement that appeared on its Web site]; Doe II v. MySpace Inc. (2009) 175 Cal.App.4th 561 [sustaining demurrer to causes of action for negligence and strict liability against social networking Web site arising out of sexual assaults inflicted on minors who met their assailants on the site]; Hupp v. Freedom Communications, Inc. (2013) 221 Cal.App.4th 398 [affirming order granting anti-SLAPP motion to strike claim that the defendant breached its Internet Website user agreement]; Delfino, supra, 145 Cal.App.4th 790 [affirming summary judgment in favor of employer that provided interactive computer service to employee who used the system to make threats over the Internet].)

Neither party cited any authority that applies section 230 to restrict a court from directing an Internet service provider to comply with a judgment which enjoins the originator of defamatory statements posted on the service provider’s Web site. The Court of Appeal did note, however, that section 230 explicitly provides that “[n]othing in this section shall be construed to prevent any State from enforcing any State law that is consistent with this section.” (§ 230(e)(3).) As discussed above, California law authorizes a trial court to issue an injunction preventing the repetition of statements that have been adjudged to be defamatory by the trier of fact. (Balboa Island, supra, 40 Cal.4th at p. 1160.) California law also empowers the court to enforce its judgment by ordering that an injunction run to a non-party through whom the enjoined party may act. (Planned Parenthood, supra, 107 Cal.App.4th at pp. 352-353.) Thus, the Court of Appeal concluded that these state law procedures are not inconsistent with section 230 because they do not impose any liability on Yelp, either as a speaker or a publisher of third party speech.

Yelp mistakenly contended that the “trial court” imposed liability on Yelp as an aider and abettor of Bird’s defamatory postings. The “trial court” that conducted the default prove-up hearing and entered judgment against Bird alone (Judge Sullivan) did not find that Yelp was an aider and abettor or impose any liability on Yelp whatsoever. Furthermore, although the trial court that conducted the hearing on Yelp’s motion to vacate (Judge Goldsmith) found that Yelp was an aider and abettor, the Court of Appeal already declared this finding not relevant to the issues before the court, and reiterated that it had no bearing on its analysis.

Yelp also argued that “enjoining a party from publishing content is a remedy that can only follow from a finding of liability, and thus the injunction entered against Yelp cannot survive the robust protection of the CDA.” Again though, the party that was enjoined from publishing content in this case was Bird, and that injunction did follow a finding of Bird’s liability for publishing defamatory reviews about Hassell. Assuming, as Yelp has maintained, that Yelp played no role in the creation of that defamatory speech, an order directing Yelp to remove only those reviews that are covered by the injunction does not impose any liability on Yelp.

Yelp argued that “Section 230 immunity encompasses claims for injunctive relief, and the cases do not distinguish between defendants and non-parties.” However, each case Yelp cited for this proposition involved a failed claim for injunctive relief that was alleged against an Internet service provider defendant in a civil lawsuit. (Kathleen R., supra, 87 Cal.App.4th 684; Noah v. AOL Time Warner, Inc. (E.D.Va. 2003) 261 F.Supp.2d 532; Smith v. Intercosmos Media Group (E.D.La. 2002) 2002 U.S. Dist. LEXIS 24251; see also Medytox Solutions, Inc. v. Investorshub.com, Inc. (Fla. 2014) 152 So.3d 727.)

Yelp argued that cases extending CDA immunity to claims for injunctive relief that are alleged directly against a interactive service provider in a tort action must apply with equal force to an injunction that binds a non-party. Otherwise, Yelp argues, “a plaintiff who wants to enjoin an interactive computer service can nullify its immunity under the CDA by suing the creator of the third-party content and then obtaining an injunction binding the interactive computer service . . . .” This argument ignores the fact that protection against third party liability is the foundation of CDA immunity. As pointed out, Hassell did not allege any cause of action seeking to hold Yelp liable for Bird’s tort. The removal order simply sought to control the perpetuation of judicially declared defamatory statements.

With its arguments, Yelp consistently ignored the significance of the fact that Hassell obtained a judgment which establishes that three reviews Bird posted on Yelp.com are defamatory as a matter of law, and which includes an injunction enjoining Bird from repeating those three reviews on Yelp.com. Indeed, that injunction is a key distinction between this case and the CDA cases that Yelp cited, all of which involved allegations of defamatory conduct by a third party, and not a judicial determination that defamatory statements had, in fact, been made by such third party on the Internet service provider’s Web site.

Finally, Yelp contended that section 230 bars “any liability for failing to comply with the injunction.” Once again, Yelp’s imprecision masks the real question. If an injunction is itself a form of liability, that liability was imposed on Bird, not Yelp. Violating the injunction or the removal order associated with it could potentially trigger a different type of liability which implicates the contempt power of the court. Generally speaking, “a nonparty to an injunction is subject to the contempt power of the court when, with knowledge of the injunction, the nonparty violates its terms with or for those who are restrained.” (People v. Conrad, supra, 55 Cal.App.4th at p. 903, italics omitted.)

Yelp did not cite any authority which addressed the question whether section 230 would immunize Yelp from being sanctioned for contempt. In the opinion of the Court of Appeal, sanctioning Yelp for violating a court order would not implicate section 230 at all; it would not
impose liability on Yelp as a publisher or distributor of third party content. A “contempt proceeding is not a civil action but is of a criminal nature even though its purpose is to impose punishment for violation of an order made in a civil action.” (Freeman v. Superior Court (1955) 44 Cal.2d 533, 536.) There are cases where Internet service providers were named in contempt proceedings that are consistent with this conclusion. (See, e.g., Blockowicz v. Williams (7th Cir. 2010) 630 F.3d 563; Arista Records, LLC v. Vita Tkach (S.D.N.Y. 2015) 2015 U.S. Dist. LEXIS 107339.) For all of these reasons, Yelp has failed to establish that section 230 or any other law barred the trial court from issuing the removal order under the circumstances of this case. Therefore, Yelp’s nonstatutory motion to vacate the Bird judgment was properly denied.

DISPOSITION BY COURT OF APPEAL

The September 2014 order denying Yelp’s motion to vacate the Bird judgment was affirmed, but the case was remanded to the trial court with the direction to narrow the terms of the removal order in the January 2014 judgment by limiting it to the specific defamatory statements that were listed on exhibit A of that judgment. As I anticipated, the order was a prior restraint because it prohibited Bird from posting about Hassell. Conceivably, Bird could in the future have new dealings with Hassell, and could post comments about Hassell that are true, and that is why prior restraint is prohibited.

YELP DOUBLES DOWN

Since its business model depends on negative reviews, Yelp desperately wanted to maintain the ability to post false and defamatory reviews, so it took the matter up to the Supreme Court.

Yelp has a history of making epically bad litigation decisions. Who can forget the case of Yelp v. McMillan Law Group, where Yelp (seemingly out of retaliation after the McMillan Law Group successfully sued it in Small Claims Court) brought an action against a law firm, claiming that the firm had posted positive reviews about itself, and that as a result Yelp had suffered damages because of the damage to the trustworthiness of its reviews. In doing so, Yelp put all its finances in issue, as well as its algorithm. It quietly walked away from that case.

In a prior article, I discussed at length the contortions counsel for Yelp had to engage in to make its CDA arguments, but in the end those arguments carried the day.

Sort of.

Yelp had argued for much more than CDA protection. It argued that it should have been permitted to argue that the content was not defamatory. In that regard, it failed. The Court made clear that it was ruling only on the third paragraph of the trial court’s judgment, which ordered Yelp to remove the defamatory posts. The opinion did not alter the judgment in any other way, and Bird remains liable for significant damages and must comply with the court’s order to remove the defamatory posts. To assuage their conscious, the Justices made much of the fact that Hassell is not without remedy, since Bird can be jailed if she fails to comply.

In the plurality decision, the Justices concluded:

For almost two decades, courts have been relying on section 230 to deny plaintiffs injunctive relief when their claims inherently treat an Internet intermediary as a publisher or speaker of third party conduct. Certainly in some instances where immunity has been recognized prior to judgment, the plaintiff was in fact defamed or otherwise suffered tortious harm susceptible to being remedied through an injunction. Yet Congress has declined to amend section 230 to authorize injunctive relief against mere republishers, even as it has limited immunity in other ways. (See Pub.L.No. 115-164, §4 (April 11, 2018) 132 Stat. 1253 [amending section 230 to add section 230(e)(5), clarifying that immunity does not apply to certain civil claims and criminal actions associated with sex trafficking].) Although this acquiescence is not itself determinative, it provides a final indication that the dissenting justices are simply substituting their judgment for that of Congress regarding what amounts to good policy with regard to online speech. But that is not our role.

Even as we conclude that Yelp is entitled to immunity, we echo Barrett, supra, 40 Cal.4th 33, in emphasizing that our reasoning and result do not connote a lack of sympathy for those who may have been defamed on the Internet. (Barrett, at p. 63.) Nevertheless, on this record it is clear that plaintiffs’ legal remedies lie solely against Bird, and cannot extend — even through an injunction — to Yelp.

So the decision stands only for the proposition that Yelp cannot be ordered to take down a defamatory post by way of a third party injunction. The Court concluded, in error in my opinion, that even a mere take-down order, which imposes no liability on Yelp, still runs afoul of Section 230.

The opinion was authored by Chief Justice Cantil-Sakauye, with Justices Chin and Corrigan concurring. Sadly, their reasoning does not hold up to close scrutiny, and does not hold them in good stead.

The opinion tries to belittle the reasoning of the dissenters, especially Justice Cuellar, but in doing so it only serves to demonstrate the frustration and inability to refute the reasoning of those dissenters.

The dissenting opinion of Justice Cuellar is the most impassioned, but I found the opinion of Justice Liu to be the most cogent and compelling. For that reason, I set it forth in its entirety here:

DISSENTING OPINION BY LIU, J.

The court expresses “sympathy” for those who have been defamed on the Internet, including plaintiffs Dawn Hassell and the Hassell Law Group, who won a lawful judgment against defendant Ava Bird for defamatory reviews that Bird posted on Yelp. (Plur. opn., ante, at p. 32; see conc. opn. of Kruger, J., ante, at p. 17.) But Hassell is not seeking sympathy. She is seeking a remedy for the damage done to her and her law firm. The trial court provided that remedy in the form of damages against Bird and an injunction ordering both Bird and Yelp to remove the defamatory reviews, and the Court of Appeal affirmed. However, more than four years after the trial court issued its order, Bird’s defamatory reviews remain posted on Yelp. Bird has refused to comply with the injunction, and Yelp claims it is under no legal obligation to comply. Today’s decision agrees with Yelp, thereby ensuring that Hassell will continue to suffer reputational harm from the unlawful postings unless Bird is somehow made to comply.

This “dilemma” (conc. opn. of Kruger, J., ante, at p. 17) is one of the court’s own making. As Justice Cuéllar explains, today’s extension of the Communications Decency Act of 1996 (47 U.S.C. § 230) (section 230) to immunize Yelp is not supported by case law or by the statute’s text and purpose. (Dis. opn. of Cuéllar, J., post, at pp. 7–29.) Section 230 does not immunize Yelp from this removal order issued by a California court in a case where “[n]o claim was ever brought against Yelp seeking defamation or tort liability for its editorial decisions.” (Dis. opn. of Cuéllar, J., post, at p. 18.) Decisions like Zeran v. America Online, Inc. (4th Cir. 1997) 129 F.3d 327 are inapposite because they involved lawsuits filed directly against providers of interactive computer services for tort liability. In Barrett v. Rosenthal (2006) 40 Cal.4th 33 (Barrett), we relied on those decisions to conclude that “section 230 exempts Internet intermediaries from defamation liability for republication.” (Id. at p. 63.) We rested our holding on the understanding that “[s]ubjecting service providers to notice liability would defeat ‘the dual purposes’ of section 230, by encouraging providers to restrict speech and abstain from self-regulation. [Citation.] A provider would be at risk for liability each time it received notice of a potentially defamatory statement in any Internet message, requiring an investigation of the circumstances, a legal judgment about the defamatory character of the information, and an editorial decision on whether to continue the publication.” (Barrett at p. 45, italics added.) We emphasized that “[a]ny investigation of a potentially defamatory Internet posting is . . . a daunting and expensive challenge.” (Id. at p. 57, italics added.) Our opinion repeatedly explained that section 230 is intended to protect service providers from investigation and litigation burdens arising from notice of users’ “potentially” defamatory statements. (Id. at pp. 44–46, 55, 57.)

These concerns are not present in this case. No one has burdened Yelp with defending against liability for potentially defamatory posts. Here, the trial court ordered Yelp to remove postings that have been already adjudicated to be defamatory. Hassell sued Bird, not Yelp, and the litigation did not require Yelp to incur expenses to defend its editorial judgments or any of its business practices. The trial court ruled that Bird had defamed Hassell on Yelp, and it directed Yelp to help effectuate the remedy. Yelp’s conduct as a speaker or publisher was never at issue in Hassell’s lawsuit, and the trial court imposed no liability on Yelp for such conduct. Instead, the trial court enjoined Yelp as part of the remedy for Bird’s tortious conduct toward Hassell. A company in Yelp’s position may face burdens associated with determining the “validity or scope” of a removal order or “the manner in which it is implemented.” (Plur. opn., ante, at p. 29.) But these are not the type of burdens contemplated by Barrett or the cases upon which Barrett relied in explaining the purpose of section 230 immunity.

As for Yelp’s due process claim, the Court of Appeal properly clarified that the question here is “whether the trial court was without power to issue the removal order in the first instance.” (Hassell v. Bird (2016) 247 Cal.App.4th 1336, 1357, italics added.) The matter before us is Yelp’s motion to vacate the trial court’s judgment; this is not a contempt proceeding or other action seeking to impose liability on Yelp for violating the injunction. (Ibid. [Yelp’s postjudgment conduct “has no bearing on the question” presented].) Justice Kruger argues that the removal order directed at Yelp violates due process because Yelp was never given its “own day in court” before the order was issued. (Conc. opn. of Kruger, J., ante, at p. 9.) She cites Judge Learned Hand’s opinion in Alemite Manufacturing Corp. v. Staff (2d Cir. 1930) 42 F.2d 832 (Alemite) for the proposition that a court generally cannot “bind any one but a party” and “cannot lawfully enjoin the world at large.” (Id. at p. 832; see conc. opn. of Kruger, J., ante, at p. 3.)
But “[g]eneral propositions do not decide concrete cases” (Lochner v. New York (1905) 198 U.S. 45, 76 (dis. opn. of Holmes, J.)), and the facts of Alemite are instructive. The plaintiff there won a patent infringement suit against John Staff and obtained an injunction “against John, ‘his agents, employees, associates and confederates,’ enjoining them from infringing, or ‘aiding or abetting or in any way contributing to the infringement.’ ” (Alemite, supra, 42 F.2d at p. 832.) “At the time of the suit [John’s brother] Joseph was a salesman for John, but later, having left his employ, he set up in business for himself, and was proved to have infringed the patent. The plaintiff then began proceedings in the original suit to punish Joseph for contempt, asserting that he was bound by the decree, and that his new business was a violation of the writ.” (Ibid.) The Second Circuit held that the injunction in the action against John could not extend to Joseph’s new act of infringement. (Id. at p. 833.) Noting that “[t]he District Judge found that John ‘had no connection or part whatever in the acts of contempt hereby adjudged against Joseph Staff’ ” (id. at p. 832), Judge Hand explained that “[t]he District Court had no more power in the case at bar to punish [Joseph] than a third party who had never heard of the suit” (id. at p. 833).
The injunction in Alemite could not reach Joseph, a nonparty, because his infringement of the same patent was entirely independent of John’s original act of infringement. It was in that sense that Judge Hand said Joseph was a stranger to the underlying suit. The same is not true here. The trial court did not enjoin Yelp “ ‘from engaging in independent conduct with respect to the subject matter of th[e] suit.’ ” (Conc. opn. of Kruger, J., ante, at p. 6.) Yelp was directed to remove Bird’s defamatory reviews of Hassell, the very subject matter of the underlying suit. The trial court did not enjoin Yelp from posting any other defamatory reviews of Hassell, even if such reviews were identical to Bird’s. This is fully consistent with Judge Hand’s admonition that “it is not the act described which the decree may forbid, but only that act when the defendant does it.” (Alemite, supra, 42 F.2d at p. 833.) The defendant here is Bird; the unlawful acts are Bird’s defamatory reviews; and the injunction directs Yelp to remove only Bird’s defamatory reviews, not anyone else’s. The removal order illustrates the rule that an injunction may extend to a nonparty “when [the nonparty] has helped to bring about . . . what [the injunction] has power to forbid, an act of a party.” (Ibid.)

In saying that the removal order enjoins Yelp from engaging in “independent conduct,” Justice Kruger strays from the meaning of that term as used in the cases she cites. (See Additive Controls & Measurement Sys. v. Flowdata (Fed.Cir. 1996) 96 F.3d 1390, 1395 (Flowdata); Paramount Pictures Corp. v. Carol Pub. Group, Inc. (S.D.N.Y. 1998) 25 F.Supp.2d 372, 375–376 (Paramount Pictures).) In those cases, as in Alemite, a plaintiff obtained an injunction against one or more defendants for patent or copyright infringement and thereafter sought to bind nonparties to the injunction based on the nonparties’ acts of infringement. This was prohibited, the courts explained, because the nonparties had engaged in their own acts of infringement separate and apart from the defendants’ infringing acts that were the subject of the injunction. (See Flowdata, at pp. 1395–1397; Paramount Pictures, at pp. 375–376.) “Independent conduct” in this context means conduct by a nonparty that is allegedly unlawful independent of the defendant’s wrongdoing; it does not encompass conduct by a nonparty that facilitates the defendant’s wrongdoing. Indeed, Flowdata recognized — with no misgivings about due process — that courts have authority to issue a directive to a nonparty when “ ‘necessary or appropriate to effectuate and prevent the frustration of orders’ ” directed at a party. (Flowdata, at p. 1396, quoting U.S. v. New York Tel. Co. (1977) 434 U.S. 159, 172 [court may require telephone company to cooperate with installation of pen register device].) Alemite, Flowdata, and Paramount Pictures would be more on point if the trial court had ordered Yelp to remove identical reviews posted by people other than Bird. But the removal order targets only the reviews written by Bird, the defendant in the underlying suit.

This court long ago observed that “it has been a common practice to make the injunction run also to classes of persons through whom the enjoined party may act, such as agents, servants, employees, aiders, abetters, etc., though not parties to the action, and this practice has always been upheld by the courts, and any of such parties violating its terms with notice thereof are held guilty of contempt for disobedience of the judgment.” (Berger v. Superior Court (1917) 175 Cal. 719, 721 (Berger).) Justice Kruger doubts that “Bird acts, or has ever acted, ‘through’ Yelp in the sense relevant under Berger” (conc. opn. of Kruger, J., ante, at p. 7) and suggests that Yelp’s conduct here is merely passive. But such a characterization of Yelp’s role blinks reality.

If Bird had gone to the town square every day to shout defamatory comments about Hassell, or if Bird had made those comments to 50 friends, it is doubtful this case would be here today. Instead, Bird posted a review on Yelp, a website that attracts tens of millions of visitors every month. Yelp is an interactive service provider dedicated to inviting people like Bird to post reviews of local businesses and inviting users to search, sort, and read those reviews (all while exposing website visitors to advertisements). Yelp formats the reviews, makes the reviews searchable, and aggregates reviews of each business into a rating from one to five stars. Yelp’s Terms of Service make clear to reviewers that “[w]e may use Your Content in a number of different ways, including publicly displaying it, reformatting it, incorporating it into advertisements and other works, creating derivative works from it, promoting it, distributing it, and allowing others to do the same in connection with their own websites and media platforms.” The Terms of Service also state that Yelp owns “visual interfaces, interactive features, graphics, design, compilation, including, but not limited to, our compilation of User Content and other Site Content, computer code, products, software, aggregate user review ratings, and all other elements and components of the Site excluding Your Content, User Content and Third Party Content.”

The treatment of user comments by other websites may be more passive, and I do not suggest that any website that posts user comments may be subject to a removal order like the one here. But Yelp’s relationship with reviewers like Bird is not passive. Even if Yelp was not Bird’s agent or servant (cf. Ross v. Superior Court (1977) 19 Cal.3d 899, 905–909 (Ross); Ex parte Lennon (1897) 166 U.S. 548, 555–556), it is evident that Bird acted through Yelp in the most relevant sense: It was Bird’s defamation of Hassell, facilitated by Yelp’s willing and active participation, that the trial court sought to enjoin. The removal order directed at Yelp is an example of the “common practice” of “mak[ing] the injunction effectual against all through whom the enjoined party may act, and to prevent the prohibited action” — here, the continued display of Bird’s defamatory reviews on Yelp — “by persons acting in concert with or in support of the claim of the enjoined party.” (Berger, supra, 175 Cal. at p. 721, italics omitted.)

Justice Kruger suggests that whether Bird acted through Yelp in a manner that made Yelp a proper subject of the injunction is an issue on which Yelp had a right to notice and an opportunity to be heard before the injunction issued. (Conc. opn. of Kruger, J., ante, at p. 7, fn. 3.) But I agree with the Court of Appeal that “a trial court does have the power to fashion an injunctive decree so that the enjoined party may not nullify it by carrying out the prohibited acts with or through a nonparty to the original proceeding.” (Hassell v. Bird, supra, 247 Cal.App.4th at p. 1357.)

Again, Alemite is instructive. After obtaining an injunction “against John, ‘his agents, employees, associates and confederates,’ enjoining them from infringing, or ‘aiding or abetting or in any way contributing to the infringement,’ ” the aggrieved plaintiff initiated an action “to punish Joseph for contempt, asserting that he was bound by the decree” as a nonparty within the ambit of the injunction’s terms. (Alemite, supra, 42 F.2d at p. 832.) It is true that Joseph had notice and an opportunity to be heard in the contempt proceeding, and he convinced the district court that his new act of infringement had no connection to John’s prior act of infringement that was the subject of the injunction. But suppose the district court had concluded otherwise and found Joseph in contempt. That determination would rest on the premise that the injunction validly applied to Joseph when it was issued (provided he had notice of it, which he did). If Joseph could not have been bound by the injunction because he had no notice or opportunity to be heard before it was issued, then he could not have been punished for contempt under any scenario. Joseph could only have been bound by a new injunction after being heard on the nature of his conduct; he could not have been punished for violating the existing injunction. Yet Alemite provides no support for this view.

Instead, Judge Hand recognized the validity of punishing a nonparty who “has helped to bring about” the prohibited act of a party as a narrow exception to the general rule that an injunction can apply only to persons who have had “their day in court.” (Id. at p. 833.)
In Ross, supra, 19 Cal.3d 899, we rejected the local supervisors’ claim that they could not be held in contempt for violating an injunction directed at state officials and their “ ‘agents’ ” (id. at p. 906) because they were not parties to the suit in which the injunction was issued and “received no notice and were afforded no opportunity to defend that action” (id. at p. 905). We determined that the local supervisors were, by statute, “agents” of the state officials for purposes of administering welfare benefits, notwithstanding the supervisors’ arguments to the contrary. (Id. at pp. 906–909.) The supervisors had no opportunity to present their arguments that they were not “agents” of the state before the injunction issued — yet we upheld the finding of contempt because they “wilfully refused to comply with the judgment.” (Id. at p. 904.) In other words, the injunction was binding on the supervisors when issued, even though they had no notice or opportunity to be heard beforehand. Justice Kruger does not explain how, under her view, the supervisors in Ross could have been bound.

The only difference here is that the injunction names Yelp instead of using a general phrase to refer to nonparties (e.g., “Bird’s agents, employees, associates, confederates, aiders and abettors”) as in Alemite and Ross. But that makes no difference to the due process inquiry. Yelp may yet argue in a contempt proceeding that its relationship to Bird’s tortious conduct was not sufficient to justify the trial court’s removal order. But if that argument were to fail, the fact that Yelp — like the supervisors in Ross — had no notice or opportunity to be heard before the trial court issued the injunction would not preclude a finding of contempt. Such a finding would necessarily mean the injunction was valid when issued.

Finally, the nature of Yelp’s relationship to Bird that makes Yelp a proper subject of the injunction is not that of a “publisher or speaker” for purposes of section 230 immunity. Yelp’s obligation to remove Bird’s defamatory reviews does not stem from any judgment as to the legality of any editorial decision by Yelp to publish Bird’s speech. As noted, the only issue in the underlying suit was whether Bird, not Yelp, had defamed Hassell and her firm; the suit did not impose on Yelp any burdens of defending itself against liability for “potentially defamatory” statements. (Barrett, supra, 40 Cal.4th at p. 45.) Whether Yelp could claim section 230 immunity in a contempt proceeding on the ground that its continued refusal to remove Bird’s reviews is a matter of editorial judgment, notwithstanding a state court judgment finding the reviews defamatory, is a matter not before us.

The Court of Appeal got it right: Yelp has no statutory immunity from the removal order, and the removal order directed at Yelp does not violate due process of law. I would affirm the judgment of the Court of Appeal.

— LIU, J.

Although only persuasive authority, the dissenting opinions (as well as the concurring opinion of Justice Kruger) make clear that Yelp has managed to open a new can of worms when it was not ready to go fishing.

For now, it is the law in California that Yelp cannot be ordered, as a third party, to remove a review because the plurality found that is a form of liability, and therefore runs afoul of the CDA. But the opinion is clear that is only because doing so because it improperly treats Yelp “as a publisher or speaker of third party conduct.” The aforementioned worm can comes from the fact that the dissenters have indicated a willingness to treat Yelp as a publisher if it interferes with the ability of the user to remove the post.

Following the model of Rip Off Report, Yelp’s Terms of Use provide that it reserves the right to prohibit reviewers from removing their own content. The comments of the Justices during oral argument and in the dissenting opinions make clear that they will have none of that, and the plurality do not offer any disagreement. As stated by Justice Cuellar:

A website’s willful refusal to comply with an injunction, where compliance is feasible, may also provide evidence to support a finding that the service provider aided, abetted, or acted in concert, combination, or collusion with an enjoined defendant. (See Ross, supra, 19 Cal.3d at pp. 904, fn. 4, 916.) Evidence that a website prominently featured a defamatory review –– to attract viewers or for other reasons –– after it had notice of a defamation judgment and injunction directing the speaker to remove the defamatory post may indicate the provider has acted to violate the injunction in support of the enjoined party. A provider’s actions to maintain unlawful Internet posts in concert with a defendant may support a factual finding of aiding, abetting, or acting in concert or in support of the defendant. So could situations where a defendant has reason to believe her content is unlawful but is encouraged by a provider to retain the content, or where a defendant attempts to remove unlawful content, but the provider retains the content citing its right to use, display, or promote the content under its terms of service. The plurality opinion appears to maintain in contrast that section 230 grants Yelp immunity from compliance with the injunction even where Yelp is found to have aided, abetted, or acted in concert with or support of Bird to violate the injunction. (Plur. opn., ante, fn. 14 at pp. 25-26.) We are unpersuaded. Neither the plurality opinion’s logic nor its reliance upon a nonbinding federal case support the conclusion that section 230 would bar as “publication decisions” all the conduct that a trial court might rely on to make valid factual findings that action in concert or collusion occurred between a service provider and a defendant.

In conclusion, Yelp won a narrow victory on the issue of third-party injunctions, but in doing so laid the groundwork for abolishment of any website’s terms of use that claim the right to maintain posts against the will of the person who posted the content. At least in that sense, today’s ruling holds hope for a more honest marketplace of ideas.

Show Some Love for California’s Anti-SLAPP Statute

A real Jones for the Basketball coach

Not the coach in question.

I get frequent calls from people who have run afoul of the anti-SLAPP statute, basically asking, “what can we do about this terrible law?”

Here’s the deal. Every law eventually gets subverted. The Americans With Disabilities Act sounded like a great idea, but then you ended up with attorneys who use it as an extortion racket, forcing fast food restaurants to pay thousands because a counter was 17 ½ inches high instead of 18.

So it is with California’s anti-SLAPP statute. It is a great statute, and for the most part attorneys have not found an effective way to misuse it, except for right to appeal an adverse decision, which many now use as a delaying tactic. Opposing counsel in one of my cases recently brought a motion for permission to file a very late (by two years) anti-SLAPP motion on the eve of trial, and when the motion was quite properly denied, then filed an appeal from that denial. Of course I had no difficulty getting the Court of Appeal to dismiss the frivolous appeal, but it delayed the trial a month. Except for this type of abuse, in most other regards California’s anti-SLAPP law provides a very useful tool to get rid of lawsuits designed to silence free speech or frustrate the right of redress. The point is, if you are complaining about California’s SLAPP statute, and your complaint has nothing to do with an attorney using it for delay purposes, then you probably filed a SLAPP action and the system worked by getting rid of it.

However, in case you still have it out for California’s anti-SLAPP law, I bring you an example out of Illinois that should make you feel a little better. California pioneered the anti-SLAPP concept, and most states have used that law as a template, but that hasn’t prevented some from coming up with their own strange hybrids.

Enter the case of Steve Sandholm, a high school basketball coach/athletic director in Illinois. In the case of Sandholm v. Kuecker, some parents decided they didn’t like Sandholm’s coaching style, so they really went after him, hoping to get him replaced. They posted useful, positive comments such as “[he is] a psycho nut who talks in circles and is only coaching for his glory.” The efforts were to no avail, because the school board decided to keep him. However that decision only fanned the flames, and the parents kept up their campaign. Sandholm found some of the statements to be defamatory, so he brought a defamation action.

But wait. Illinois has an anti-SLAPP statute that states that speech and petition activities are “immune from liability, regardless of intent or purpose, except when not genuinely aimed at procuring favorable government action, result, or outcome.” Wow that’s a broad standard. A school district is a government entity, and the parents were trying to get that government entity to do something (removing the coach), so did that fall under Illinois’ anti-SLAPP statute? If I read the statute correctly, that means that even if the parents got together and decided to fabricate lies about the coach, they are immune from a defamation action so long as those lies were “genuinely aimed at procuring a favorable government . . . outcome.” (I’m not saying that happened, I’m only using the case to present a hypothetical.) And how in the world is a court going to determine if the actions were “genuine”?

Incredibly, that’s exactly how the Court of Appeal interpreted the statute. Read this excellent summary of the case by John Sharkey to see just how convoluted the anti-SLAPP process can become.

Peer Review Process for Doctors is a Protected Activity Under SLAPP Statute

Anti-SLAPP Motion against doctor
The California Court of Appeal recently ruled that I know what I’m talking about when it comes to SLAPP law, and that I have saved many doctors from filing actions that would have been met with successful anti-SLAPP motions and thereby cost them many thousands of dollars, paying the other side’s attorney fees.

OK, the Court didn’t actually mention me by name, but that’s the way I read it. You see, most doctors (depending on their practice) want and need medical privileges at one or more hospitals. Without those privileges, their practices are really crippled. So when a hospital decides to revoke those privileges, it is a big deal for the doctor.

Following the revocation, the doctors want to do something, anything, to pressure the hospital’s board to reinstate the privileges. That often brings them to my door, wanting to sue for defamation, claiming that someone said something that cost them their privileges, and that they suffered damages as a result.

I have always refused such cases, because I am of the opinion that under normal circumstances, the entire medical peer review process qualifies as an official proceeding. Therefore, it falls under both the anti-SLAPP statute and the absolute privileges of Civil Code section 47. No matter how you try to plead the action, it will come back to the fact that the decision to “fire” the doctor was a protected activity.

Leading us to the case of radiologist John Nesson versus Northern Inyo County Local Hospital District. For reasons not important to the story, Dr. Nesson lost his privileges at a hospital. Dr. Nesson sought reappointment by the hospital and, after it was denied, filed a civil complaint. He retained counsel who either did not recognize the SLAPP aspects of the case or decided to take a run at it anyway, thinking they could successfully plead around them. (Which does not mean they did anything wrong, as set forth below.)

In the complaint, they alleged causes of action for: (1) breach of contract; (2) breach of the covenant of good faith and fair dealing; (3) violation of Health and Safety Code section 1278.5; (4) violation of the Unruh Civil Rights Act; and (5) violation of the Fair Employment and Housing Act (FEHA). In summary, the grounds for Dr. Nesson’s claims were that the hospital had breached the Agreement by not giving him 30 days’ notice of termination, had retaliated against him for his complaints about patient safety, and had discriminated against him for a perceived mental disability or medical condition.

A very good try. Do you see that none of the causes of action mention defamation or any of the other causes of action that one normally associates with a SLAPP suit? Many defense attorneys would not have even spotted the SLAPP issues, and the matter would have proceeded. But here is today’s lesson. A SLAPP is a SLAPP is a SLAPP, and it doesn’t matter what you call the causes of action if the conduct arises from a protected activity.

I previously wrote about my successful anti-SLAPP motion against Freddie Fraudster, who fraudulently obtained a credit card under my client’s name. When my client reported the fraud to the bank, Freddie sued claiming that damaged his reputation with that institution. In response to my anti-SLAPP motion, he argued that my client’s communications to the bank were not protected because they were not part of any formal review process. Motion GRANTED, even though the report in question was not to any official agency.

So too, the attorneys defending against Dr. Nesson’s action did spot the SLAPP issues, and brought an anti-SLAPP motion. Dr. Nesson argued in response that his summary suspension and the subsequent termination of the Agreement did not constitute protected activity because the hospital was not involved in the peer review process or his summary suspension. Motion GRANTED, because it’s all part of the same protected activity.

The decision to suspend privileges triggers a statutory scheme for review of the decision under Business and Professions Code section 805, so the actions of the hospital and the medical examination committee were a normal part of that process. As I have repeatedly explained would happen, the trial court granted the hospital’s special motion to strike, finding that the contract termination was “inextricably intertwined with the . . . summary suspension, arose from, and was in furtherance of the protected activity.”

But what about the claim that he was terminated because of a perceived mental disability or medical condition? If he was discriminated against, how can that be protected by the anti-SLAPP statute? How can that “arise from” the protected activity? As the Court of Appeal explained:

“[T]he anti-SLAPP statute applies to claims made in connection with the protected activity, regardless of defendant’s motive, or the motive the plaintiff may be ascribing to the defendant’s conduct. (Navellier v. Sletten, supra, 29 Cal.4th at pp. 89-90.) The only alleged evidence or argument in support of his claim that the Hospital perceived Nesson as disabled are the facts that the Hospital received the written special notice of summary action and the notice of medical executive committee action suspension. Nesson contends “[b]ased on the above letters and a report from the MEC, the Hospital decided to terminate Nesson’s Service Agreement.” These letters and any alleged “report” are part of the peer review process.”

In defense of the attorneys, there were complicating factors here, and sometimes you have to push the envelope. That is how statutes are interpreted under the law. The discrimination claim might have survived if the evidence had taken the alleged discrimination outside the review process. Further complicating the matter, Dr. Nesson did not exhaust his administrative remedies, and that gave pause to the court since that made it impossible for him to show a likelihood of success on the action.

Another Blogger Bites the Dust

Internet Defamation Against Blogger

Another blogger learned this week that you are judged by what you say.

Tara Richerson is a teacher in Washington. She had been blogging since 2004 and many of her postings were about her job. According to court records, when she was demoted from her position as a coach at the school, she wrote the following missive:

“Save us White Boy! I met with the new me today: the person who will take my summer work and make it a full-time year-round position. … But after spending time with this guy today, I think Boss Lady 2.0 made the wrong call in hiring him. … He comes across as a smug know-it-all creep. And that’s probably the nicest way I can describe him. … And he’s white. And male. I know he can’t help that, but I think the District would have done well to recruit someone who has other connections to the community. … Mighty White Boy looks like he’s going to crash and burn.”

The 9th U.S. Circuit Court of Appeals concluded that Richerson’s blog contained “several highly personal and vituperative comments” that justified the Central Kitsap School District’s decision to transfer her from her job as a curriculum specialist and instructional coach to a classroom teaching position. The court found that Richerson’s speech was disruptive, eroded work relationships and interfered with her job performance, which involved mentoring teachers.

“Common sense indicates that few teachers would expect that they could enter into a confidential and trusting relationship with Richerson after reading her blog,” the court wrote in its Tuesday opinion. “Accordingly, the district court did not err in concluding that the legitimate administrative interests of the school district outweighed Richerson’s First Amendment interests.”

The court ruled that Richerson’s blog attacking co-workers, the union and the school district was not protected speech, and therefore she was not unlawfully demoted over it.

According to court records, Richerson was transferred out of her coaching job in July 2007 after school officials discovered her blog months earlier. Another of the blog entries that Richerson came under fire for was one entry in which she allegedly attacked a teacher and union negotiator, who complained to school officials about it. It read: “What I wouldn’t give to draw a little Hitler mustache on the chief negotiator.”

The lesson to learn is that you can and will be held accountable for the things you say. Even if your comments do not cross the line into defamation, they may still be considered inappropriate for other reasons. It is disingenuous for people like Richerson to cry foul and cite the First Amendment when they are held responsible for their own comments. The First Amendment does not state that you can say whatever you want with no fear of repercussion. If someone feels strongly enough about an alleged wrong to blog about it, then they should be willing to stand by those convictions.

The oral argument in front of the Ninth Circuit Court of Appeal is fascinating, and can be heard in its entirety here. I explain to clients that judges and justices tend to paint with a broad brush, and if you find yourself arguing technicalities and minutia, you are probably not going to prevail. Richerson’s attorney did an outstanding job, but he was forced to argue that the adverse job action was based on benign blog posts, not the post set forth above. That was a tough argument to sell.

Trial Judges Still Struggling With Application of Anti-SLAPP

anti-SLAPP does not protect defamatory speech

A recent decision by the California Court of Appeal, which reverses a trial court’s decision to dismiss the underlying defamation case, beautifully illustrates how trial courts still do not understand the anti-SLAPP statute. It’s unfortunate the plaintiff had to go through an appeal in order to educate this particular judge. The following summary of facts and quotes are taken from the Court of Appeal’s opinion. I apologize for the long post and multiple citations, but I want to have a place where people can be directed for the proper anti-SLAPP considerations and standards.

The action appears to have roots going back to 2003, when there was an altercation between Rabbi Chaim Seidler-Feller, Director of Hillel at UCLA, and Rachel Neuwirth, a journalist working in the Los Angeles area. Neuwirth alleged that Seidler-Feller had attacked her without provocation in October 2003. Shortly after this attack, she alleges in her complaint, “disciples of Seidler-Feller maintained in public print that [she] had provoked the attack by making inc[e]ndiary statements” to him. Neuwirth denied these allegations. As a result of her injuries, she said, she sought legal redress and reached an “amicable settlement” with Seidler-Feller and Hillel accompanied by a letter of apology from Seidler-Feller, “published in various tribunals,” in which he “acknowledged that the attack upon [Neuwirth] was unprovoked, that he took full responsibility for said attack and apologized for his actions.” Continue reading

Aaron Morris

Morris & Stone, LLP

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View Aaron Morris, Trial Attorney and Partner at Morris & Stone, with emphasis on Free Speech and Defamation Law.

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