Monday, March 30, 2015
Writing for Forbes.com, Santa Clara Law Prof Eric Goldman (pictured) reports on a recent SDNY case, Galland v. Johnston. The case is similar to others about which we have blogged recently. Plaintiffs rent out their apartment in Paris through a website. The rental agreement associated with the property provides that defendants would “not to use blogs or websites for complaints, anonymously or not." Notwithstanding this clause, defendants posted reviews of the apartment that were not entirely positive. In one case, plaintiffs offered a defendant $300 to remove a three-star review from a website. The defendant refused and complained to the website. Plaintiff then sued defendants for, among other things, breach of contract, extortion and defamation.
The magistrate judge dismissed all of the claims except the breach of contract claim. Plaintiffs objected to this disposition. Defendants did not, which may be a good reason why the District Court let the breach of contract claim stand while upholding the Magistrate's dismissal of the remaining claims. Indeed, the District Court's opinion did not address the breach of contract claim.
Professor Goldman expresses surprise that the Magistrate allowed the breach of contract claim to stand. Other New York courts have found that contracts clauses that prohibit customer reviews are a deceptive business violate New York's consumer protection laws. Professor Goldman also points out that they violate public policy regardless of New York law.