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More Plaintiffs Join in on Yelp Lawsuit

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By Minara El-Rahman on March 18, 2010 12:45 PM

Nine more plaintiffs have joined the Yelp lawsuit that claims that Yelp attempted to extort money in exchange for altering or removing user generated reviews of their business. The San Francisco Business Times reports that these new plaintiffs in the Yelp lawsuit include: Mermaid Cruises of San Francisco, Astro Appliance Service of San Carlos and Sofa Outlet of San Mateo, as well as businesses located in Chicago, New York City, Los Angeles, Torrance and Tujunga. This Yelp lawsuit is currently seeking class action status.

Some of the claims against Yelp in the lawsuit filed in federal court in Los Angeles include: unfair business practices, running an "extortion scheme," and having Yelp employees call businesses in order to have them pay Yelp monthly in order to remove or adjust negative reviews about their business.

There is currently another lawsuit that has been filed by a California day spa called D'Ames Day Spa against Yelp, which was filed in federal court in San Diego. Both lawsuits claim that the online review site tried to extort money in the form of advertising from them.

In response to both lawsuits, Yelp CEO Jeremy Stoppelman responded on the Yelp blog. He claimed that lawyers may be lining for litigation because they are aware of the new round of funding that his company had received. In fact, the San Francisco Business Times quoted him as saying that lawyers could be in a "race to the courthouse" to try to get some of the $25 million dollars that Yelp was able to raise from investor Elevation Partners. Yelp's CEO claims: "Advertising and content on Yelp is like the separation of Church and State: with the exception of a single review at the top of their review list (clearly marked as such), advertisers gain no control over how reviews appear on their business page."

While that may be the case, it seems like this complaint among small business owners does not seem to be going away. Mr. Jared Beck, the attorney representing the plaintiffs, has said that his phone has been ringing off the hook from businesses all over the country who are claiming that Yelp did the same thing to them.

For more information on Yelp and its lawsuits, please visit our Related Resources.

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