When Bad Online Reviews Cost Business A Washington, D.C., contractor sues a dissatisfied customer for $750,000 over a negative Yelp review.

By Lindsay LaVine

entrepreneur daily

Opinions expressed by Entrepreneur contributors are their own.

Negative online reviews can put a ding in your business's reputation, but one small-business owner has decided to sue a dissatisfied customer over negative statements she made online. Christopher Dietz and his Washington, D.C.-based company, Dietz Development, filed suit in October against Jane Perez alleging that Perez made defamatory statements about Dietz on Yelp and Angie's List that harmed his reputation and business to the tune of $750,000.

According to the complaint, Perez hired Dietz, a former high school classmate, to do some work on her new home. The trouble began after Perez allegedly failed to pay Dietz Development for any work performed and insisted work be completed that, according to Dietz, was outside the scope of the agreement. Beginning in January, Perez began posting negative reviews of Dietz Development on Angie's List and Yelp, alleging that Dietz stole property from her home, damaged her property, and engaged in improper billing.

According to the Washington Post, on December 5th a judge granted a preliminary injunction, ordering Perez to refrain from making statements alleging property theft by Dietz or referring to a previous lawsuit between the parties. On recent visit to Dietz's Yelp page, the Perez post was no longer displaying.

Related: Got a Bad Yelp Review? Here's What to Do

While a trial date for the defamation claim hasn't been set, the implications of the lawsuit are rippling through the Internet. Dietz Development's Yelp page is filled with comments from users from California to New York deriding Dietz's decision to sue a former customer. One user from California noted, "[It's] not cool to sue customers simply for writing a review," while another from Massachusetts said, "When you sue your customers for voicing their dissatisfaction in a public setting, you're attempting to stifle free speech."

Lawsuits brought by businesses against clients making allegedly defamatory statements online aren't exactly new. In 2008, a California chiropractor sued his patient after he took to Yelp to grumble about billing practices. (That case settled the following year.) In 2009 and 2010, Chicago plastic surgeon Dr. Jay Pensler sued three patients for comments they made about him on Yelp. (All three cases have been voluntarily dismissed.)

And then there is Courtney Love, whose tweets have cost her hundreds of thousands of dollars. She settled one lawsuit brought by a fashion designer for a reported $430,000, and has since been sued by a former lawyer after alleging the attorney had accepted a bribe.

Related: What to Do When Customers Get Mean on Social Media

The fallout from these recent lawsuits raises the question, when (if ever) should a business owner sue a client? On the one hand, business owners have a reputation to uphold. On the other, a lawsuit against a customer can be viewed as a David vs. Goliath battle, with the customer in the role of underdog. Such decisions should be considered thoughtfully. As these cases illustrate, all publicity isn't necessarily good publicity.

Lindsay LaVine is a Chicago-based freelance writer who has worked for NBC and CNN.

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