YELP class action dismissed from federal court

By Kyla Asbury | Feb 27, 2014

LOS ANGELES (Legal Newsline) - A class action lawsuit against YELP Inc. by former reviewers has been dismissed from federal court.

On Feb. 19, an order granting the defendant's motion to dismiss was filed in the U.S. District Court for the Central District of California.

The plaintiffs, represented by counsel, have not opposed the motion, according to the order.

Central District of California Local Rule 7-9 requires an opposing party to file an opposition to any motion at least 21 days prior to the date designated for hearing the motion.

"Additionally, Local Rule 7-12 provides that '[t]he failure to file any required document, or the failure to file it within the deadline, may be deemed consent to the granting or denial of the motion,'" the dismissal order says.

The hearing on the defendant's motion was noticed for March 10, meaning the plaintiffs' opposition was therefore due by Feb. 17. However, the plaintiffs did not file an opposition or any other filing that could be construed as a request for a continuance.

The court deems the plaintiffs' failure to oppose as consent to granting the motion to dismiss, according to the order.

The plaintiffs - Dr. Allen Panzer, Amy Sayers, Lily Jeung and Darren Walchesky - were Yelp reviewers who claimed they were unlawfully misclassified as non-wage-paid employees, according to a complaint filed Oct. 22 in the U.S. District Court for the Central District of California.

The plaintiffs claimed they, and other class members, performed their duties relating to the creation and promotion of content on behalf of Yelp, including writing, researching, editing, lodging review, upgrading prior reviews and generally promoting the site.

The plaintiffs were "an indispensable and integral part of the success of the defendant's business," the complaint stated.

The plaintiffs claimed Yelp's business model is predicated entirely on the exploitation of the plaintiffs' work product in order for the company and its owners to earn approximately $220 million annually.

"Its success is dependent upon the efforts of hordes of non-wage-paid reviewers and its ability to use those reviews as ready-made advertising-content to advertise businesses on their websites," according to the suit.

The plaintiffs claimed Yelp's enormous growth and preeminence as a publisher are directly attributable to its low operating costs, made possibly by not paying wages to an entire class of workers, thereby also sidestepping payment of taxes and other societal contributions.

Yelp has devised a system of cult-like rewards and disciplines to motivate its non-wage-paid writers to labor without wages or expense reimbursement, in violation of equitable principles and the Fair Labor Standards Act, by offering rewards such as trinkets, badges, titles, praise, social promotion, free liquor, free food and free promotional Yelp attire, according to the suit.

The plaintiffs were seeking unpaid wages, reimbursement of expenditures, liquidated damages and statutory damages with pre- and post-judgment interest. They were being represented by Randy Rosenblatt of the Yelp Class Action Law Firm.

Yelp Inc. was being represented by Angeli C. Aragon and James C. Potepan of LeClairRyan LLP; Mark Goldowitz of the California Anti-Slapp Project; and Aaron Schur of Yelp Inc.

The case was assigned to District Judge Dean D. Pregerson.

U.S. District Court for the Central District of California case number: 2:13-cv-07805

From Legal Newsline: Kyla Asbury can be reached at classactions@legalnewsline.com.

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