Tax Prep Company Tries To Sue Unhappy Customer Into Silence; Hit With Damages In Anti-SLAPP Order

from the or,-how-to-make-one-opinion-REALLY-MATTER dept

An anti-SLAPP win has just been handed down in Nevada, one of the few states with a strong anti-SLAPP law. At the center of the failed defamation lawsuit is (you guessed it) a negative review of a business posted at Yelp.

Pamela Boling (represented by Marc Randazza) hired IQTaxx to prepare her taxes, including the filing of a hardship notice. IQTaxx failed to do so. Boling tried to speak to the company about its failure to file the hardship paperwork, but after several attempts she was routed to a third-party number which informed her that the tax preparer's number was no longer in service.

Boling turned to Yelp and left a review detailing her experience with the company. Her review was headlined "This is MALPRACTICE!" Shortly thereafter, IQTaxx sent a cease-and-desist to Boling over her "exaggerated emotional rant review" -- wording it should have known would be fatal to its claims of defamation. Defamation does not cover exaggerations or emotional rants, but rather false statements purporting to be facts.

The court finds the company has failed to satisfy both prongs of Nevada's anti-SLAPP test. Not only that, but it has failed in pretty much all respects when it comes to pursuing a libel suit.

There is no dispute that Yelp is a well-known public forum. and Defendant has provided evidence that her allegedly defamatory statements were not made with knowledge of their falsity. Plaintiff failed to provide evidence tending to show that Defendant knew her statements were false when she made them. Defendant thus made the statements at issue in good faith under NRS 41.637(4). Defendant proved by a preponderance of the evidence that her statements were on a matter of public interest, in a public forum, and were made without knowledge of their falsity.
As for the second prong -- prevailing on the suit's merits -- the court similarly finds almost nothing to work with.
Plaintiff has failed to meet its burden under NRS 41.660(3)(b). Statements of opinion and rhetorical hyperbole are not actionable, as Supreme Court precedent establishes that "there is no such thing as a false idea. However pernicious an opinion may seem, we depend for its correction not on the conscience of judges and juries but on the competition of other ideas." Gertz v. Robert Welch, 418 US. 323, 339-40 (1974).
In other words, the Supreme Court has said the best defense against speech one doesn't like is more speech, not lawsuits.

The court adds that the context of the disputed assertions also plays a significant part in its interpretation.
Context is vitally important in determining whether a reasonable person is likely to view a statement as one of fact, or one of protected opinion or rhetorical hyperbole. The context of Defendant's statements is Yelp, a well-known online forum for consumer reviews. The Internet is the modern equivalent of the soapbox on the sidewalk, and web sites such as Yelp are the type of public forum that is protected under the First Amendment.

The public has become accustomed to seeing fiery rhetoric on online fora, and courts recognize that this context makes it less likely that a reader will interpret statements published in such places as actionable statements of fact.
The court then notes that IQTaxx's sole claim basically doomed its lawsuit from the start.
Plaintiff only asserts that the statement "This is MALPRACTICE!" is defamatory, meaning that only Defendant's September 11, 2015 Yelp review is properly considered in determining whether Plaintiff has met its burden. The statement "This is MALPRACTICE!" with the term "malpractice" in all capital letters and with an exclamation mark, in the context of a Yelp review, is a protected statement of rhetorical hyperbole that cannot make out a claim for defamation.

[...]

Defendant's statements are protected statements of emotional hyperbolic opinion. The average Yelp user would not read the statement "This is MALPRACTICE!" with the central term in all capital letters and with an exclamation mark as a carefully considered legal opinion.
IQTaxx must now pay Boling $1,000 in statutory damages, and the person it tried to sue in shutting up can also go after it for legal fees. The tax preparer has several options available to address the negative review, but chose the one that hurt it the most. Rather than just being known for questionable customer service, the company is now known for suing critics and losing badly.

Filed Under: anti-slapp, nevada, pamela boling, reviews
Companies: iqtaxx, yelp


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  1. identicon
    Anonymous Coward, 12 Apr 2016 @ 11:10pm

    IQTaxx WAS set up as a scam.
    Get as many customers as you can, hire NO STAFF who can actually file taxes and then run away with the money.

    They haven't filed a single proper tax document for a SINGLE CUSTOMER from 2014 upto when they finally decided to take the money they'd effectively stolen and run.

    The entire company was a scam from day one and every single person involved should get 10-15 years hard labor.

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