• by Wendy Davis , Staff Writer @wendyndavis, April 16, 2015

In a closely watched battle over online reviews, Virginia's highest state court said today that Yelp doesn't have to disclose the identities of people who criticized a small rug-cleaning business based in Alexandria.

But the ruling, which rested on procedural grounds, didn't resolve questions about when business owners are entitled to learn who criticized them online. Instead, the Virginia Supreme Court said that Hadeed Carpet Cleaning didn't have the right to demand that Yelp produce documents in Virginia because the company is based in California.

“The information sought by Hadeed is stored by Yelp in the usual course of its business on administrative databases within the custody or control of only specified Yelp employees located in San Francisco, and thus, beyond the reach of the circuit court,” Justice Elizabeth McClanahan wrote today for the five-judge majority. (Two judges said in a separate opinion that they disagreed with McClanahan's reasoning, but not the result.)

The ruling stems from a court battle dating to 2012, when Hadeed alleged in court papers that seven commenters who wrote negative reviews on Yelp never actually used the rug-cleaning service.

Hadeed never had solid evidence that the reviewers weren't customers, but a trial judge and appellate court found the allegations enough to order the commenters unmasked.

Yelp appealed to Virginia's highest court. In addition to arguing that it shouldn't be subpoenaed in Virginia, Yelp also said that people have a free speech right to comment anonymously online, provided they don't defame anyone. Yelp added that companies shouldn't be able to unmask reviewers without solid proof of defamation -- which typically goes beyond a suspicion that commenters weren't actual customers.

Public Citizen attorney Paul Alan Levy, who represented Yelp, said in a statement that today's ruling was an “important win,” but noted the company had hoped the court would also rule that the reviewers have a free-speech right to preserve their anonymity.

Levy added that Public Citizen intends to seek out other Virginia disputes about anonymous speech, in hopes of persuading the state's highest court to “establish the procedures for protecting the First Amendment right of online reviewers.”

Meanwhile, if Hadeed wants to pursue the matter, the company will have to ask a judge in California to order Yelp to turn over its information about the commenters. Whether the rug-cleaning business will do so remains to be seen. But as a practical matter, filing suit in California in order to pursue Yelp commenters doesn't seem like the most efficient way for a small business to protect its reputation.