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Negative online reviews and the limits of litigation

A business that used litigation to address an online Yelp review has to pay sanctions to the customer who posted the review. And the case still is not over!

I remember an old saying about being focused on the cheese and forgetting about the trap. The idea is that at some point you need to re-evaluate the initial goals and objectives in light of new information or circumstances.  You know that you need to forget about the cheese and start worrying about the trap when you start using words like quagmire and phrases like “exit strategy” and “cut your losses.”

Litigation can be a classic example of being focused on the cheese and forgetting about the trap.  The Fifth Court of Appeals, Dallas, Texas issued an opinion this week involving a Yelp review and the Texas Citizens Participation Act that shows how litigation can create problems that did not exist prior to going down the litigation path.

The case is Duchouquette v. Prestigious Pets, LLC.   The Douchouquettes hired Prestigious Pets to feed their fish while the Douchouquettes were out-of-town.  On their fish webcam, the Douchouquettes saw Prestigious Pets’ pet sitter over feed the fish. The Douchouquettes posted a negative review on Yelp.com.  Prestigious Pets filed a lawsuit in justice court against the Douchouquettes over the Yelp review.  The Douchouquettes responded with a motion to dismiss under the Texas Citizens Participation Act, and requested attorney fees and sanctions against Prestigious Pets.

The Texas Citizens Participation Act “encourage[s] and safeguard[s] the constitutional rights of persons to petition, speak freely, associate freely, and otherwise participate in government to the maximum extent permitted by law. . ..”  The TCPA allows a part to file a motion to dismiss a legal action if the legal action is “based on, relates to, or is in response to a party’s exercise of the right of free speech, . . ..”  A TCPA motion to dismiss must be filed within 60 days after service of the legal action, and all discovery is suspended until the court decides the motion to dismiss.  If the court grants the motion to dismiss under TCPA, the court must award court costs, reasonable attorney fees, and sanctions against the party who brought the legal action.

The TCPA raises the stakes anytime the legal action relates to free speech, and especially for parties like Prestigious Pets who file legal actions over negative online reviews.

Getting back at the Douchouquettes for the Yelp post was the cheese.  The TCPA was the trap.  Recognizing that it should forget the cheese and worry about the trap, Prestigious Pets dismissed its claims against the Douchouquettes in justice court and thereafter the justice court denied the Douchouquettes’ TCPA motion.

The Douchouquettes appealed the denial of their TCPA motion to county court.  At the same time, Prestigious Pets filed a separate legal action in district court, and the Douchouquettes filed another TCPA motion in the district court.  The county court dismissed the case for lack of jurisdiction. In the district court case, the district court granted the Douchouquettes’ TCPA motion and sanctioned Prestigious Pets $7,000 under the TCPA.  Despite the mandatory language in the TCPA, the district court denied the Douchouquettes’ request for $10,415 in attorney fees.

The Douchouquettes were not finished.  They appealed the county court’s dismissal on jurisdictional grounds to the Dallas Court of Appeals.  The Dallas Court of Appeals reversed the county court, and remanded the Douchouquettes’ TCPA motion for consideration by the county court.

What happens next in the county court with the Douchouquettes’ original TCPA motion is anyone’s guess.  The county court could rule that the district court already decided the issue when it granted the Douchouquettes’ TCPA motion and awarded them $7,000 in sanctions against Prestigious Pets. Or the county court could revisit the Douchouquettes’ request for attorney fees, which now will include appellate attorney fees.

Prior to filing the legal action against the Douchouquettes for the Yelp review, Prestigious Pets’ primary problem was how to overcome the Yelp review.  After filing the legal action, Prestigious Pets had the Yelp problem, and the Douchouquettes’ TCPA motion.  If nothing else, this case is a cautionary tale of how the TCPA imposes limits on addressing online reviews through litigation.