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Attorneys

First District Court of Appeal strikes small, but meaningful, victory for businesses combatting online libel.

July 28 2017

By Josiah Prendergast

Just last week, California’s First District Court of Appeal handed a small, but meaningful, victory to businesses that resort to litigation to defend their reputations against anonymous, online attacks.  In ZL Technologies, Inc. v. Does, the First District held that ZL Technologies (“ZL”) was entitled to discover the identities of persons who posted anonymous reviews of ZL on Glassdoor.com, after ZL made a prima facie showing that its libel c were factually and legally valid.  Following the Sixth District’s decision in Krinsky v. Doe 6, the First District refused to impose additional burdens on plaintiffs who apparently have been defamed by persons emboldened by the relative anonymity the internet provides.

In 2012, ZL sued a group of unknown persons for libel and online impersonation, based on anonymous reviews posted to Glassdoor.com—a website for job seekers, where current and former employees can post reviews.  In order to serve the defendants with the complaint and prosecute its lawsuit, ZL sought disclosure of the defendants’ identities through a subpoena to Glassdoor.  Glassdoor refused the comply with the subpoena and the trial court denied ZL’s motion to compel compliance and later dismissed ZL’s suit with prejudice for failure to serve the defendants.  The First District found that the trial court wrongfully denied ZL the opportunity to discover the identities of the anonymous reviewers and, as a result, also improperly dismissed the lawsuit.

ZL’s appeal raised a conflict that lacks a definitive standard for resolving—the conflict between an anonymous speaker’s First Amendment right to remain anonymous and a libel plaintiff’s right to prosecute its case.  Neither the U.S. nor California Supreme Court has established a standard for resolving this conflict.  In order to compel disclosure of an anonymous speaker’s identity, most courts agree that the plaintiff must make a prima facie showing that the elements of a libel claim are supported by some amount of evidence.  But courts differ as to what other requirements a plaintiff must meet.

One oft-followed standard was established by a New Jersey appellate court in Dendrite Intern. V. Doe No. 3.  Under Dendrite, a plaintiff is required to: (1) make an effort to notify the anonymous defendant that the plaintiff seeks disclosure of his or her identity, to provide the defendant an opportunity to oppose discovery; (2) identify the specific statements that were libelous; (3) produce sufficient evidence to state a prima facie cause of action; and (4) show that the strength of its prima facie claim outweighs the defendant’s First Amendment right to remain anonymous.

In ZL Techs. v. Does, amici curae Public Citizen Litigation Group and Twitter, Inc. encouraged the First District to wholly adopt the Dendrite test, which the Sixth District declined to do in Krinsky.  The First District followed Krinsky; however, by refusing to follow the fourth prong of the Dendrite test—balancing the strength of the plaintiff’s prima facie claim against the defendant’s First Amendment rights.  The First District found that the additional balancing test adds no protection beyond the requirement that the plaintiff make a prima facie showing of a valid claim, unduly complicates the analysis, and gives protection to conduct that, based on the plaintiff’s preliminary evidentiary showing, is not constitutionally protected.

The fourth prong of the Dendrite test is concerning because it creates an uncertain standard.  Once a plaintiff presents evidence that a specific statement was made, is provably false, and caused harm, what more must the plaintiff do to tip the balance?  Dendrite does not say.  Discovery was denied in Dendrite because the plaintiff did not make a prima facie showing of a valid claim—the balancing test was never reached, let alone applied.

Often, litigation is not the best approach to combatting criticism, negative reviews, and bad press, because libel claims are difficult to prove.  While false statements of fact may be actionable, statements of pure opinion or statements that cannot reasonably be interpreted as stating actual facts, i.e., obvious exaggeration, are not.  As a result, one’s business reputation usually is best protected through purposeful engagement, both with the market and, at times, with detractors.

For those times when litigation appears appropriate, one can hope ZL Techs. and Krinsky will be the foundation upon which California sets a consistent standard for determining whether a libel plaintiff is entitled to discover the identity of an anonymous speaker.