Demetriades v. Yelp, Inc.
175 Cal. Rptr. 3d 131
Cal. Ct. App.2014Background
- James Demetriades (operator of Mammoth Lakes restaurants) sued Yelp under the UCL and FAL seeking an injunction to stop Yelp from advertising the accuracy/effectiveness of its automated review "filter."
- Yelp operates a free review website that sells advertising; Yelp developed proprietary filtering software to suppress unreliable reviews and markets that filter to users and advertisers.
- Demetriades alleges Yelp’s public statements (e.g., that the filter delivers the "most trusted" or "most unbiased and accurate" reviews) are false or misleading because the filter suppresses many legitimate reviews and fails to remove biased/false negative reviews.
- Yelp moved to strike under the anti‑SLAPP statute (Cal. Code Civ. Proc. §425.16), arguing the statements concerned matters of public interest and were protected speech, that CDA §230 barred claims, and that the statements were nonactionable opinion/puffery.
- The trial court granted Yelp’s anti‑SLAPP motion; on appeal the Court of Appeal reversed, holding Yelp’s statements about its filter fall within the commercial‑speech exemption to the anti‑SLAPP law (Cal. Code Civ. Proc. §425.17(c)).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Yelp’s statements about its review filter are protected speech under anti‑SLAPP or fall within the commercial‑speech exemption (§425.17(c)) | Statements are factual claims made to induce reliance and promote Yelp’s advertising services; exemption applies | Statements concern public discourse about reviews and are opinion/puffery or public interest speech protected by anti‑SLAPP | Held: Statements are commercial speech about Yelp’s services and satisfy both prongs of §425.17(c); anti‑SLAPP does not apply |
| Whether plaintiff lacks standing because the named individual is not the business owner | Demetriades relied on Yelp’s statements and purchased advertising; defect can be cured by substituting proper plaintiff | Yelp: the entity MEMP (owner) is the real party in interest so Demetriades lacks standing | Held: Naming the wrong real party is not fatal; plaintiff may move to substitute the proper party (amendment permitted) |
| Whether Yelp’s claims are nonactionable puffery/opinion rather than factual representations | Demetriades: statements are specific and factual ("most trusted," "most unbiased and accurate") and likely to induce reliance | Yelp: statements are general aspirational claims and disclaimers show the filter is imperfect; thus nonactionable | Held: Court finds the statements specific enough to be factual, not mere puffery, for §425.17(c) analysis |
| Whether CDA §230 bars Demetriades’ claims | Demetriades seeks to enjoin Yelp’s own statements about its filter, not third‑party reviews | Yelp: CDA §230 immunizes editorial decisions and any liability related to third‑party content | Held: CDA §230 does not bar the claim because plaintiff challenges Yelp’s own representations about its filter, not the third‑party reviews themselves |
Key Cases Cited
- Cel‑Tech Communications, Inc. v. Los Angeles Cellular Telephone Co., 20 Cal.4th 163 (1999) (distinguishes remedies under UCL and explains scope of private UCL actions)
- Kasky v. Nike, Inc., 27 Cal.4th 939 (2002) (framework for determining when speech is commercial: speaker, audience, content; factual representations about business operations can be commercial speech)
- Simpson Strong‑Tie Co. v. Gore, 49 Cal.4th 12 (2010) (addresses burden allocation regarding §425.17 exemptions)
- Brill Media Co., LLC v. TCW Group, Inc., 132 Cal.App.4th 324 (2005) (discusses §425.17(c) applicability to commercial speech)
- Stewart v. Rolling Stone LLC, 181 Cal.App.4th 664 (2010) (example of noncommercial/editorial context where §425.17(c) did not apply)
- Newcal Indus., Inc. v. Ikon Office Solutions, 513 F.3d 1038 (9th Cir. 2008) (distinguishes puffery from actionable factual claims based on specificity)
- Navellier v. Sletten, 29 Cal.4th 82 (2002) (anti‑SLAPP burden shifting and pleading standards)
- Kashian v. Harriman, 98 Cal.App.4th 892 (2002) (standard of review and anti‑SLAPP two‑step analysis)