Catching Up on the Bogus “Yelp Law” Litigation Campaign–Tao v. Uniqlo
[Personal note: the Free Speech Coalition v. Paxton ruling took a lot of wind out of my blogging sails. First, the opinion is pure Calvinball. It makes me question everything I know about Internet “Law” when courts shamelessly disregard precedent and the rule of law. I’m not sure how much value I add blogging the finer points of jurisprudential development in a Calvinball world. Second, the opinion opened the door to virulent and devastating regulations that will surely reshape–and shrink–the Internet to the detriment of all of us. Should I pay attention to incremental legal developments in an industry that’s about to have a cataclysmic meltdown? I’m sure I’ll regain my blogging mojo eventually, but for now, I’m still disoriented by the FSC v. Paxton ruling and struggling to determine what’s worth my blogging time and your reading time.]
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This blog post relates to California Civil Code 1670.8, colloquially called the “Yelp Law,” which complements (and predates) the Consumer Review Fairness Act to restrict businesses from blocking their customers from writing consumer reviews. While the Yelp Law (and the CRFA) are good policy initiatives, the Yelp Law contained a miscalibrated private right of action that has spurred a spate of meritless lawsuits. I reapped that enforcement genre most recently in this post.
Today’s case is slightly unusual because the plaintiffs are enforcing the California statute in New York state court rather than in a California court. The court suggests that Uniqlo’s TOS designated New York as the litigation venue, which would explain this choice.
The litigation genre includes some truly bizarre advocacy. Plaintiffs sue businesses in state court, perhaps hoping the case will take longer (and churn more defense legal cycles) and benefit from more plaintiff-sympathetic judges. When the defendants remove the case to federal court, the plaintiffs then argue they lack Article III standing to support federal court jurisdiction because their case is trash. This creates the bizarrest upside-down advocacy, where the plaintiff is arguing how weak their case is and the defendant is hyping the case’s strength.
Even more bizarrely, many judges are accepting plaintiffs’ acknowledgement that their case is shit. However, instead of dismissing the shit case entirely, the courts are giving the plaintiffs what they ask for and remanding the case back to state court. In theory, this intermediate plaintiff victory should be pyrrhic. On remand to state court, the defendant should be able to cite the plaintiffs’ own words about how their case is shit and achieve easy defense wins. Unfortunately, state court proceedings are largely invisible to me, so I don’t know what happens to these cases on remand. My guess is that the plaintiffs use the extra legal cycles to pressure defendants to settle for a fraction of the future legal costs.
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That brings us to today’s case. The defendant is Uniqlo, a fashion retailer. Its online TOS contains the following provision:
Unless otherwise indicated, all names, graphics, designs, logos, page headers, button icons, scripts, commercial markings, trade dress, and service names included in the Site are trademarks of UNIQLO or its licensors, sponsors or suppliers and are protected by trademark laws. The trademarks may not be used in any manner that is likely to cause confusion to, or in any manner that disparages or discredits, UNIQLO. UNIQLO and its logo are, without limitation, among the registered trademarks of UNIQLO and its Affiliates. Infringement of any UNIQLO trademark is not permitted.
I’ve complained about provisions like this before. They are unnecessary. Uniqlo’s legal rights as a trademark owner would be the same even if their TOS omitted this provision. Worse, it’s poorly drafted. The verb “use” is fatally ambiguous in trademark law (it has at least 3 separate meanings), and trademark “use” is different from ordinary dictionary meanings of the term “use.” By collapsing all of this semantic baggage into a single verb “use,” the provision can be read in ways never intended by the drafter. And even if the drafter meant to restrict only trademark “uses,” trademark owners can’t ordinarily control “disparaging” or “discrediting” references to their marks. So Uniqlo should not have adopted this provision.
At the same time, anyone who understands the context of this provision knows that it doesn’t purport to restrict, nor could it be reasonably interpreted as a restriction on, consumers referencing the Uniqlo brand as part of disparaging or discrediting consumer reviews. In context, the verb “use” has a technical meaning drawn from trademark law, and no consumer review makes a “use” that would trigger the contractual restrictions. This is so obvious to trademark experts that the plaintiffs’ interpretation was probably beyond the drafter’s wildest imagination.
So from my perspective, this case is obviously meritless. This trademark provision never controlled consumers’ reviews, so it never implicates the Yelp Law. But here we are.
As the plaintiff hoped, the court says it lacks Article III standing:
Plaintiff does not allege that he violated Defendant’s Terms or intended or wanted to violate the Terms, or that Defendant enforced or threatened to enforce the Terms against him….Plaintiff has failed to allege that he faced a credible threat of enforcement. Plaintiff simply has not alleged facts from which the Court could reasonably infer that it is likely that Plaintiff intended to make statements that would violate the Terms or that the Terms will be enforced against Plaintiff.
So what the hell are the parties still doing in court???
The plaintiff’s neat trick (“my case is too stupid to stay in federal court”) works again in this case, and the federal court remands the case back to state court. The court says:
Courts, almost uniformly, have granted motions to remand in Yelp Law cases…Defendant’s attempt to distinguish its statutory standing argument from Article III standing is unpersuasive.
As a bonus F-U to the defendant and the legal system, the plaintiff sought its attorneys’ fees for defeating the remand motion, i.e., “pay me for bringing a case so terrible that it’s unworthy of federal courts.” (The court summarizes: “Plaintiff argues that Defendant’s failure to establish that Plaintiff has Article III standing merits an award of attorneys’ fees and costs.” Read that sentence again and pay close attention to the pronouns). The court denies the fee shift, saying the defendant had a reasonable basis to make the removal motion.
I don’t blog every Yelp Law case I see, because they are all pretty much like this one: an insult to the court’s, and readers’, intelligence. Still, I hope you enjoyed today’s foray into Wackyland.
Case Citation: Tao v. Uniqlo USA LLC, 2025 WL 1906685 (S.D.N.Y. July 10, 2025)
Selected Blog Posts Regarding 1670.8