California Court Rules Against Customer for Libelous Online Posts About Contractor

In the case of Paglia & Associates Construction, Inc. v. Hamilton, the Second District of California delivered a ruling that could be a sigh of relief for businesses troubled by defamatory online posts. The court found that a customer, Hamilton, who expressed dissatisfaction with her contractor’s work online could be held liable for libel, dismissing the argument that her comments were protected under the litigation privilege. This case stemmed from a home repair dispute where Hamilton was unhappy with the repairs made by Paglia & Associates, following damage caused by a fallen tree on her property.

Hamilton took her grievances online, making several disparaging remarks about Paglia’s work quality, including an accusation of "hard fraud." These comments were not deemed protected by the litigation privilege, as they were not sufficiently connected to the ongoing proceedings with the Contractors State License Board and were aimed more at disparaging Paglia’s business rather than contributing to any judicial or quasi-judicial process. The court emphasized that the litigation privilege is designed to facilitate free communication within the confines of legal proceedings, not to shield individuals from accountability for defamatory statements made in public forums like social media or review websites.

The decision underscores the limitations of the litigation privilege, particularly in the context of online posts. While the privilege protects communications related to legal proceedings, it does not extend to statements made outside of these proceedings that aim to damage a business’s reputation. The court also addressed the defense of truth and opinion, finding Hamilton’s claims unsubstantiated and her statements not merely opinions but potentially provable falsehoods, thus not protected against libel claims.

This ruling highlights the legal responsibilities that come with posting negative reviews or comments online and reaffirms the potential for business owners to seek recourse against false and damaging statements. It serves as a cautionary tale for individuals to consider the veracity and potential legal implications of their online comments about businesses, especially when those comments extend beyond subjective opinions to false accusations.