When Disgruntled Customers Attack

After Best Buy (NYSE: BBY) lost the laptop Raelyn Campbell had brought in for repair, the D.C. resident filed a lawsuit demanding US$54 million from the company. That eye-popping claim -- and the publicity it engendered -- was the culmination of a long blog campaign during which Campbell related her frustration with Best Buy's evasive behavior and enlisted friends and family to contact the retailer on her behalf.

Most disputes between a customer and a company don't escalate to the fever pitch that Campbell's battle with Best Buy reached. However, the actions she took prior to filing the massive lawsuit -- calling attention to her complaints through persistent blogging -- are not unusual. Empowered with Web 2.0 technologies, customers are taking to the Web in increasing numbers to vent about deceptive practices, products that don't work the way they're advertised, and shoddy service.

Blogs, in particular, have been a great equalizer -- especially if they're well-trafficked.

There's a flip side, though, to this trend. At what point might a customer cross the line and end up on the wrong side of a lawsuit?

There Is Risk

"Someone who buys something and isn't satisfied with the product and then complains about it in a public forum exposes himself or herself to risk -- if those are false statements," Bob Clothier, chair of Fox Rothschild's media, defamation and privacy practice, told CRM Buyer.

Even a consumer who is taking pains to tell the truth about a particular experience can become the target of a threatening letter or a legal action.

"People get into trouble when they criticize a company or product by making what they think is a factual statement but, in actuality, it is incorrect," Steven Lester, a partner with LaReddola Lester & Associates, told CRM Buyer.

For example, a consumer may assert in a blog that a product doesn't have a specific safety feature that's been advertised. "But it then turns out [the blogger is] wrong," Lester said, "because the product addresses that safety issue in another way."

While Lester's example illustrates how a company's product might truly be misrepresented, the picture is not always so clear. Companies have been known to seize upon minor inconsistencies or inaccuracies in a customer complaint and then use them to paint the whole thing as a falsehood. Some companies build on those tactics by bullying the complaining consumers with cease-and-desist letters.

Unintentionally making false statements is just one possible trap for earnest but misinformed consumers. Other potential minefields await. Someone might inadvertently violate a trade secret statute, for example, by publicizing the details of a contract that contained protected information.

A Theoretical Club

All that said, the legal club that companies can wield against disgruntled consumers is more theoretical than practical.

For starters, anything that is an opinion -- and presented as such -- is safe. "I could buy a TV set and decide it is junk," Clothier said. "I could post on a blog or write a post saying exactly that -- 'Brand X TV is junk.' That is still protected speech, because it is opinion."

Although the case law relevant to blogging is still minimal, bloggers appear to have the best of legal protections afforded to both media and private citizens. To successfully sue for libel against a media outlet, the plaintiff has to show not only that a particular statement was false, but also that it was made with malicious intent. The damage to its reputation must be tallied up as well.

"With the ability to be a publisher online, there is real potential for individuals to be accorded some of the defenses accorded to traditional media," Proskauer Rose attorney Christopher Wolf told CRM Buyer. "In libel law, that is a significant distinction, because the threshold to challenge statements regarding public figures or matters of public concerns is much higher." A business could be considered both.

At the same time, the courts will generally grant more leeway to a consumer making a questionable statement about a product than to a competitor saying the same thing, Lester said.

Finally, many states have adopted "anti slap" laws. "California has a statute that allows people who are sued for defamation to countersue for stifling their participation in public discourse," Wolf pointed out.

Squeaky Wheel

That is why attorneys who represent companies usually advise them to engage with consumers to resolve their complaints.

"More and more, companies realize that [being heavy-handed] isn't the best way to deal with that kind of issue," Clothier said. Indeed, such tactics could backfire if a blogger were willing to ratchet up the dispute by going public with the company's letters or threats. The ensuing spotlight would just highlight the consumer's complaints -- complaints the company presumably feels are inaccurate -- all the more.

Winning could take a year or more, Clothier noted, "and the courts will virtually never order someone to take down the comments until the suit is settled -- that would be considered prior restraint on speech."

Still, a company may sometimes feel it has no choice but to plunge ahead. "If someone is completely incorrigible and impossible to reason with, making statements that are in fact hurting the company -- then, yes, I would advise it to considering bringing suit." Clothier said. "But it shouldn't be the first impulse."

Such a scenario is unfolding right now, Wolf noted. Supoenas have been issued seeking the identities of anonymous posters to the blog Eclipse Aviation Critic. Eclipse Aviation maintains the posts have irreparably damaged it, according to an article in the business aviation publication AINonline.

The blog's publisher is planning to file a motion to quash the subpoena.

"A company really should have the situation reach this threshold before it considers the courts," Wolf said.