Arizona's restaurant scene is buzzing these days with last Friday's season finale of "Kitchen Nightmares". Just Google "Amy's Baking Company" and a proliferation of stories about the featured business appears, including a massive social media backlash against the restaurant. Users of Yelp, Reddit, and Facebook, among others, have taken to the Internet to discuss their personal experiences with the only restaurant that Gordon Ramsay could not fix. Instead of accepting the criticism and trying to fix things, the owners of Amy's Baking Company have voraciously responded to the voluminous criticism of their business. Initially utilizing a mix of personal attacks and generally negative rhetoric, the owners of Amy's Baking Company have now resorted to threats of lawsuits against each and every reviewer of their business.
The good news is that reviewers have almost nothing to fear. If one posts a review about a restaurant and says they did not like it, they are free to say so. That is what the First Amendment is all about.
It is understandable why restaurant owners have such a strong reaction to negative reviews. An October 2011 article in The Economic Journal found that a simple half-star improvement in a Yelp rating caused restaurants to sell out 49% more frequently than before. Anderson, Michael and Magruder, Jeremy, "Learning from the Crowd: Regression Discontinuity Estimates of the Effects of an Online Review Database", The Economic Journal, October 5, 2011. Search engines typically populate results that include negative business reviews, regardless of the SEO efforts of the business owner.
Just because business owners are frustrated with online reviews does not mean there is a defamation lawsuit to be had. Amateur restaurant critics shouldn't fear expressing their opinions about any business. The First Amendment provides that "Congress shall make no law ... abridging the freedom of speech...." Numerous decisions have recognized the "profound national commitment to the principle that debate on public issues should be uninhibited, robust, and wide-open." New York Times Co. v. Sullivan, 376 U.S. 254, 270 (1964).
In order for a restaurant owner to attempt a lawsuit for defamation, they must be able to prove each of the following four elements: (a) the reviewer made a false statement of fact (not opinion) about the restaurant; (b) the review was published to a third party; (c) the review was made with the requisite degree of fault; and (d) the review caused the restaurant to suffer legally recoverable damages. Defamation cannot be premised on a true statement, or a statement that is substantially true. Nor can it be based on a statement of opinion - meaning a statement that cannot be proved to be true or false. Our Supreme Court has explained that a statement of opinion cannot be actionable either, because "there is no such thing as a false idea. However pernicious an opinion may seem, we depend for its correction not on the conscience of judges and juries but on the competition of other ideas." Gertz v. Robert Welch, Inc., 418 U.S. 323, 339-40(1974).
When considering whether a restaurant review is defamatory, the court will look at the review as a whole, and its essential nature as an expression of opinion. Courts will look at the statement "from the standpoint of the average reader, judging the statement not in isolation, but within the context in which it is made." Norse v. Henry Holt & Co., 991 F.2d 563, 567 (9th Cir.1993) (citation omitted). Courts have held that when a statement contains "loose, figurative or hyperbolic language" then it does not contain a statement of fact capable of defamatory meaning. Yetman v. English, 168 Ariz. 71, 76, 811 P.2d 323, 328 (1991) and Milkovich v. Lorain Journal Co., 497 U.S. 1, 20(1990).
Another factor for restaurant owners to take into consideration is the fact that courts routinely consider restaurants to be "limited purpose public figures". This is important because it means that the restaurant must prove that the reviewer either intentionally lied or acted in reckless disregard of the truth, and this must be proven by clear and convincing evidence. This is because a restaurant is a place of public accommodation that seeks public patrons, In Pegasus v Reno Newspapers, Inc., 118 Nev. 706, 721, 57 P3d 82, 92 (2002) the Court explained it this way: "because a restaurant is a place of public accommodation that seeks public patrons, it is a public figure for the limited purpose of a food review or reporting on its goods and services."
All of that means a restaurant owner is held to an even higher burden of proof if trying to sue for defamation, and has to prove not only the four basic elements of defamation, but also that the author of the review acted with actual malice and reckless disregarded the truth of the statements. Dombey v. Phoenix Newspapers, 150 Ariz. 476, 724 P.2d 562 (1986). This threshold, in the context of a restaurant review, is difficult, if not impossible, for a restaurant owner to meet.
Indeed, it is so unlikely that a restaurant could successfully sue for defamation that one commentator has said "these obstacles make it virtually impossible for a restaurant to recover damages in a defamation suit, irrespective of the outrageousness of the statements in the review." The Clute Institute, Restaurant Reviewer Liability
For Defamation in a Global Context, 10 J. Bus. & Econ. Res., 153 (January 2012).
Your right to free speech is not absolute. But, if you are weighing whether to write a review about Amy's Baking Company, or any other restaurant, concerns about defamation should not be in the forefront of your mind. Instead, give your honest opinion about what you liked and did not like, and make sure that if you provide any actual fact about your experience, that your facts are true. If you are even somewhat careful about what you say, the business owner should think twice before initiating a lawsuit for defamation because the restaurant will lose.
About the author: Laura A. Rogal is an attorney at the Phoenix law firm of Jaburg Wilk. She assists clients with their intellectual property legal needs including internet law, social media, domain disputes and commercial litigation. Laura can be reached at lar@jaburgwilk.com
