Can states require out-of-state website operators to identify authors of negative reviews? This was the issue addressed by the Supreme Court of Virginia in Yelp, Inc. v. Hadeed Carpet Cleaning, Inc., 2015 WL 1726739 (Va. Apr. 16, 2015). Though the court avoided deciding the issue on free speech grounds, the court did otherwise hold that a Virginia circuit court could not enforce a subpoena on an out-of-state operator.
The long-standing case involved Hadeed Carpet Cleaning, a Virginia corporation doing business in Virginia. Hadeed took issue with critical Yelp reviews posted by individuals using pseudonyms. Hadeed filed a defamation action against these John Doe defendants, and served a subpoena on Yelp’s registered agent in Virginia, seeking documents that would reveal the identity of the John Doe defendants. Though Yelp was registered to do business in Virginia and had designated a registered agent for service of process in Virginia, Hadeed sought information stored by Yelp on databases accessible only by specified Yelp employees in California.
Yelp filed written objections, and Hadeed moved to overrule these objections. The Virginia circuit court agreed with Hadeed and issued an order to enforce the subpoena. Yelp refused to comply and was held in civil contempt. The Virginia Court of Appeals affirmed the decision, but the Supreme Court reversed. Relying on a jurisdictional analysis, the Virginia Supreme Court held that the Virginia circuit court could not enforce a non-party subpoena on a California company where documents stored by that company were within the custody or control of California employees. The fact that Yelp could in certain instances be subject to personal jurisdiction in Virginia in suits where it is a named party, did not mean that Yelp would likewise be subject to Virginia’s subpoena power in cases where it is not a named party.
By avoiding the First Amendment issue—namely, when companies must unmask anonymous speakers—the Virginia Supreme Court avoided deciding the degree of protection to afford to online speech. Nevertheless, companies operating sites with user-generated content should be cognizant of cases like Hadeed when balancing their duties to respond to complainants like Hadeed with their duties to users exercising free speech.
