A New York state trial court recently ruled in a long-running dispute between a cosmetic dentist and Yelp, the online consumer review site. Braverman v. Yelp, Inc., No. 158299-2013 (N.Y. Sup. Ct. Feb. 24, 2014).
The dentist originally complained that Yelp had defamed him by permitting negative reviews about him to appear on Yelp’s site. That claim had previously been denied because the federal Communications Decency Act’s safe harbor protected Yelp as a publisher of third-party content.
In the current matter, the dentist complained to Yelp personnel that Yelp had been filtering out positive reviews about his services. He claimed that Yelp personnel advised him to become a paid Yelp advertiser, and then his favorable consumer reviews would appear on the same web page as the unfavorable consumer reviews.
The dentist enrolled as a paid advertiser, at $350/month. As a part of the enrollment process, the dentist agreed to Yelp’s online agreement. The online agreement stated that:
- The purchase of advertising programs would not influence Yelp’s automated software for online reviews or otherwise enable the purchaser to reorder online reviews;
- The agreement merged and superseded any and all prior oral, emailed, or written representations and agreements between the parties (a “merger clause”); and
- The forum for any litigation was California.
When the favorable consumer reviews did not appear on the same web page as the unfavorable reviews, the dentist filed a lawsuit in New York state court, claiming breach of contract. Yelp moved to dismiss the claim based on documentary evidence, or, in the alternative, based on the online agreement’s forum selection clause.
The court agreed with Yelp and determined that Yelp’s documentary evidence of its online agreement terms “flatly contradicts” the dentist’s claim, and dismissed the breach of contract claim. But the court found that the dentist had adequately stated a claim for fraudulent inducement to enter into a contract.
The court then asked whether this potential fraud claim, by itself, was sufficient to invalidate the online agreement’s forum selection clause. The court held that it did not. The court ruled that the dentist never alleged any fraud with respect to the forum selection clause, nor had the dentist demonstrated that litigating in California would be “so financially prohibitive that, for all practical purposes, plaintiff would be deprived of his day in court.”
Therefore, the court dismissed the dentist’s complaint in its entirety.
As a result of this ruling, you may want to consider the following questions:
- Does your online agreement have a forum-selection clause?
- Does it have a merger clause?
- Does your call center know what your online agreement says?
- Are your sales personnel thoroughly familiar with the terms of your online agreement?
Sue Ross (firstname.lastname@example.org / +1 212 318 3280) is a lawyer in Norton Rose Fulbright’s US intellectual property practice.