What Remedies Remain for those Rebuffed by Reputation Ratings?

This inquiry seeks to examine how the law recently has been found an improper vehicle to address the grievances of the victims of reputational ratings systems as well as some possible responses that could help alleviate the discomfort experienced by potential plaintiffs as a result of these new rating mechanisms.

A. The 1st Amendment permits any statement in the form of an opinion; ratings websites are constitutional

In Browne v. Avvo, Inc., 525 F.Supp.2d 1249 (2007), the plaintiffs primary challenge was to the accuracy and validity of the numerical rating system used by Avvo to compare attorneys. However, the court held that the opinions expressed through the rating system were absolutely protected by the First Amendment and could not serve as the basis for defamation liability. The key issue was whether the challenged statement could reasonably have been interpreted as stating actual facts about the plaintiff. Hustler Magazine, Inc. v. Falwell, 485 U.S. 46, 50 (1998).

The Ninth Circuit developed a three-part test for determining whether a reasonable factfinder could conclude that the offending statement implies an assertion of objective fact: 1) whether the general tenor of the entire work negates the impression that the defendant was asserting an objective fact, 2) whether the defendant used figurative or hyperbolic language that negates that impression and 3) whether the statement in question is susceptible of being proved true or false. Partington v. Bugliosi, 56 F.3d 1147, 1153 (1995) (citing Unelko Corp. v. Rooney, 912 F.2d 1049, 1053 (1990)).

In these types of situations, it appears the courts are looking to determine whether a reasonable person would understand that two people looking at the same underlying data could come up with vastly different ratings depending on their subjective views of what is relevant and what is important. Website ratings would only be found liable if the information or language used on the website would lead a reasonable person to believe that the ratings were a statement of actual fact, rather than opinion. This leaves potential plaintiffs with no practical legal recourse, yet the persistence of cases being brought under similar claims may implicate a need to address the issue in some other manner.

B. While the ratings websites are not illegal, there may still be some options for government regulations to cabin content and foster standards

In determining a course of action, private organizations or the government would need to take care to preserve the articulated First Amendment rights while balancing the objective of redress. Private systems will likely have less utility because they are too easily manipulated by money and bias. Government regulation can step in, but needs to be carefully crafted to provide a supportive structure that doesn’t abridge the content.

1. Risk of payment/motives will not work in a private feedback system:

- The cardinal error of "feedback systems" as "reputation markets" is that no one in these so-called markets has to bet with real money; all transactions are conducted in an infinitely inflatable currency. If, on the other hand, people had to pay money to create these "opinions" or "feedbacks," only two classes of commentators would predominate: those who had a significant material incentive to boost the rated entity, or those who had a significant monetary or personal motive to harm it. So the votes cast in an actual "market" would be biased, while those cast in a phony market are simply meaningless. See Eben Moglen.

- An example to corroborate this premise can be found in ZL Techs, Inc. v. Gartner, Inc., 709 F.Supp.2d 789 (2010). ZL Techs claimed that Gartners placement of vendors was biased and that purchasing time with a Gartner analyst allowed vendors to obtain information that help it to improve its rating. This understanding caused ZL to take the position that, "When Gartner expresses a favorable opinion of a particular vendor that has paid the company substantial fees, Gartner is not performing an independent analysis but making a self-interested statement about a business partner." Id. The money invested into this reputational feedback system disturbed the ratings, and arguably, diminished the utility of the system as a whole.

2. Proper role/actions for government may be to construct regulations that foster transferability:

- Private market actors are already doing a fine job of making new ratings information available to the public. In these settings, the government’s role may be most properly confined to facilitating the adoption of uniform standards so that information can be aggregated easily from among a number of different websites, and reputations can be transported from one site to another. See generally Nolan Miller et al., Eliciting Informative Feedback: The Peer-Prediction Model, 51 Mgmt. Sci. 1359 (2005). This will increase the utility of the ratings systems because a true consensus will emerge, and the separate rating engines would not cooperate or collude.

3. Another promising option would be a government-mandated right of reply:

- Just as Congress enacted §230 of the Communications Decency Act, 47 U.S.C. §230 to avoid chilling internet discussion, courts are providing immunity against tort suits stemming from unflattering ratings, so long as the defendant offers the poorly rated individual or firm a right of reply similar to eBays. Specifically, in Avvo, the Court placed much significance on the fact that individuals like Browne who believed that false information was disseminated about them had a right of reply -- an ability to explain why they believe they received inappropriate ratings from a website or a complaining consumer. This right of reply is already built into most consumer feedback systems, but to increase potential plaintiffs sense of vindication, the government could mandate that this be a part of every ratings website. This rule permits a vendor to point out possible biases that formed the basis for an unfair rating or blatantly refute the rating and provide countering evidence to support their position.

4. Finally, the government could require that the websites list the particular discrepancies that led them to that rating (like MI currently requires as part of a defamation claim):

- Various privileges have arisen from the protections offered by the First Amendment including the absolute privilege accorded to statements of opinion, which even if made maliciously or insincerely, do not give rise to a libel cause of action. However, Missouri recognizes one exception to this general rule -- the privilege does not apply when the statement of opinion implies the existence of undisclosed defamatory facts. See Castle Rock Remodel, Inc. v. Better Business Bureau of Greater St. Louis, Inc., BL 282687 (2011) (citing Ribaudo v. Bauer, 982 S.W.2d 701, 704 (1998)). The FDIC could issue regulations or Congress could pass legislation to require the same thing that Missouri does, disclosure of all relevant defamatory facts. This would be particularly helpful to potential plaintiffs who would feel more accurately portrayed and have a better understanding of the origin of the rating. It would also permit subscribers to make their own opinions based on those facts, instead of relying on the ratings and opinions of the site exclusively.

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