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This court battle over a bad Yelp review will make you think twice about your next online critique

NEW YORK, NY - OCTOBER 26: Employees of the online review site Yelp watch as New York City Mayor Michael Bloomberg speaks at the new East Coast headquarters of the tech company on October 26, 2011 in New York City. The Bloomberg administration has been heralding and working to facilitate the tech sector in New York City in hopes of making New York City a rival to Silicon Valley for start-up companies. (Photo by Spencer Platt/Getty Images)

This story has been updated to reflect a statement from Yelp.

A court battle brewing between a Washington, D.C. contractor and the homeowner he claims ruined his business with a negative Yelp review could make you think twice about posting one.

Monday marked the first day of trial in a lawsuit brought by Christopher Dietz, who is seeking $750,000 in damages against Jane Perez, a customer who claimed Deitz botched a home renovation project and charged her for unnecessary services.

Perez voiced her frustration in a scathing one-star review on Yelp and Angie’s List, both widely-used consumer review websites that draw tens of millions of viewers each month.

In the August 2012 review, Perez claimed Deitz caused lasting damage to her home and added that some of her jewelry had gone missing during the construction process.  It was enough to cost Deitz $300,000 in lost revenue, according to the complaint he filed in October 2012.

Not as anonymous as you think

For a while, online reviewers have been free to say whatever they like about businesses without much in the way of fact-checking by the review websites that host their comments. And because review sites like TripAdvisor, Yelp and Angie’s List often refuse to remove negative reviews without a court injunction, many businesses resort to responding to reviewers personally through the sites.

But others, like Deitz, have decided to cut out the middle man and lawyer up — no doubt because sites like Yelp are exerting increasing influence over consumers' buying decisions, from which plumber to hire to fix a leaky toilet to which spa to patronize to get a massage. Thanks to their efforts, anonymity as an online reviewer may soon be a thing of the past.

In a recent for business owners, a Virginia appeals court ruled earlier this month that Yelp must reveal the identities of seven users who wrote negative reviews of a local carpet cleaning business. In that case, the customers weren't actually patrons of the shop, the business owner claimed, which made their reviews false statements rather than opinions protected by the First Amendment.

In a statement posted to its blog, Yelp pledged to appeal the ruling. "This decision fails to protect the First Amendment rights of Virginia consumers who are turning to sites like Yelp to share their experiences with local businesses," wrote Senior Litigation Director Aaron Schur. "While the Virginia ruling is unfortunate, we plan to appeal and we’re optimistic about the future for protecting free speech online."

Other business owners have successfully won cases against negative reviewers in the past. A pair of Arizona surgeons won $12 million in a lawsuit against a patient who created an entire website accusing the doctors of botching her plastic surgery. Ane in November, a Texas woman claimed a retailer not only fined her for a negative review she posted, but retaliated by reporting her debt to credit bureaus afterward.

Know how to protect yourself

First Amendment advocacy groups have been quick to defend consumers against such lawsuits, but help doesn't come cheap. Defending yourself in a libel suit can still cost consumers tens of thousands of dollars in legal expenses, according to Paul Levy, an attorney for consumer advocacy group Public Citizen.

"The practical reality is that if you're a defendant and you're paying your own fees, chances are your lawyer is going to be trying to settle as quickly as possible unless you want to pay to stand up for your free speech rights," Levy said.

Luckily for Perez, Public Citizen was able to find an attorney who agreed to work her case pro bono. To protect themselves, Sevy advises consumers to check their homeowner's or renter's insurance policies to be sure they're covered for libel lawsuits — especially if they're avid online reviewers.

"I think the takeaway for consumers from this case is to tell the truth, be factual, have back-up [for your claims] and make sure that your homeowner's policy covers libel suits," he said. "That's always the first thing I ask people when they come to me. Do you have homeowner's insurance and what does your policy say?"

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