Boris Levitt v. Yelp! Inc.
2014 U.S. App. LEXIS 17079
| 9th Cir. | 2014Background
- Yelp operates an online review directory where users post and rate businesses; Yelp filters, removes, and orders reviews and sells advertising that can affect a business’s page visibility.
- Plaintiffs (four small-business owners) alleged Yelp manipulated, removed, or authored negative reviews to coerce them into buying Yelp advertising, asserting UCL (unlawful and unfair prongs), civil extortion, and attempted extortion claims.
- Plaintiffs amended their complaint multiple times, alleging specific sequences where positive reviews disappeared after they refused ads and reappeared or improved after purchasing ads; two plaintiffs alleged Yelp authored some negative reviews.
- The district court dismissed the Third Amended Complaint for failure to state a claim; plaintiffs appealed.
- The Ninth Circuit reviewed dismissal de novo and affirmed, holding plaintiffs pleaded insufficient facts that Yelp’s conduct was wrongful extortion or that Yelp authored the challenged negative reviews; the court therefore did not decide Communications Decency Act immunity.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Yelp’s manipulation/removal/ordering of user reviews to induce ad purchases constitutes extortion (unlawful UCL) | Yelp induced economic fear by removing positive reviews or reordering/posting negatives to coerce ad purchases | Yelp lawfully operates its platform and may condition advertising benefits; threats of economic harm via legitimate platform decisions are not wrongful | Dismissed — threats to withhold or reorder user-generated content that Yelp controls are not wrongful extortion absent a preexisting right or sham service |
| Whether Yelp authored negative reviews to coerce ads (extortion and civil extortion claims) | Yelp employees or agents created fake negative reviews to pressure businesses | Allegations are speculative; plaintiffs failed to plead factual content making Yelp authorship plausible | Dismissed — plaintiffs failed to plead sufficient facts to infer Yelp authored the complained-of reviews |
| Whether plaintiffs pleaded an "unfair" UCL claim tied to antitrust or legislatively declared policy | Yelp’s conduct favored advertisers and harmed competition by disadvantaging nonadvertisers | Plaintiffs did not allege conduct that violated antitrust policy or threatened competition in the manner required by Cel‑Tech | Dismissed — unfair-prong claim fails for lack of linkage to legislative policy or competitive harm |
| Pleading sufficiency under Twombly/Iqbal (plausibility standard) | Plaintiffs argued discovery was needed to uncover evidence of Yelp authorship/manipulation | Yelp argued the complaint lacked factual allegations to state plausible claims | Dismissed — complaint did not plausibly allege wrongful conduct or authorship; discovery would not cure fundamental pleading defects |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (plausibility standard for pleadings)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (plausibility and factual-pleading requirements)
- Enmons, 410 U.S. 396 (claim-of-right defense limits extortion where actor has lawful claim to property)
- Cel‑Tech Commc’ns, Inc. v. L.A. Cellular Tel. Co., 20 Cal.4th 163 (UCL unfair-prong must tie to legislative policy or competitive harm)
- Brokerage Concepts, Inc. v. U.S. Healthcare, Inc., 140 F.3d 494 (conditioning access to valuable services is not extortion when no right to the service exists)
- Sosa v. DIRECTV, Inc., 437 F.3d 923 (extortion requires more than fear; wrongful use of fear is required)
- Rothman v. Vedder Park Mgmt., 912 F.2d 315 (threats to do lawful acts are not wrongful extortion)