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Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 

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FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

BORIS Y. LEVITT, on behalf of

himself and all others similarly

situated, DBA Renaissance

Restoration; CATS AND DOGS

ANIMAL HOSPITAL, INC.; TRACY

CHAN, DBA Marina Dental

Care; JOHN MERCURIO, DBA

Wheel Techniques,

Plaintiffs-Appellants,

v.

YELP! INC.,

Defendant-Appellee.

No. 11-17676

D.C. Nos.

3:10-cv-01321-EMC

3:10-cv-02351-EMC

OPINION

Appeal from the United States District Court

for the Northern District of California

Edward M. Chen, District Judge, Presiding

Argued and Submitted

July 11, 2013—San Francisco, California

Filed September 2, 2014

Before: Richard A. Paez, Marsha S. Berzon,

and Richard C. Tallman, Circuit Judges.

Opinion by Judge Berzon

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2 LEVITT V. YELP! INC.

SUMMARY*

California Unfair Competition Law / Civil Extortion

The panel affirmed the district court’s dismissal of an

action by small business owners alleging that Yelp! Inc.

extorted or attempted to extort advertising payments from

them by manipulating user reviews and penning negative

reviews of their businesses in violation of California state

law.

The panel held that the business owners failed to state a

claim for extortionate, and therefore unlawful, business

practices in violation of California’s Unfair Competition Law

because, under the Hobbs Act and California law, unless a

person has a pre-existing right to be free of the threatened

economic harm, threatening economic harm to induce a

person to pay for a legitimate service is not extortion. The

panel held that, given these stringent requirements, the

business owners failed sufficiently to allege that Yelp

wrongfully threatened economic loss by manipulating user

reviews. In addition, the business owners did not allege

sufficient facts to support their claim that Yelp authored

negative user reviews of their businesses.

The panel held that the business owners also failed to

state a claim for unfair business practices in violation of the

UCL.

* This summary constitutes no part of the opinion of the court. It has

been prepared by court staff for the convenience of the reader.

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LEVITT V. YELP! INC. 3

In addition, the business owners failed to state a claim for

civil extortion or attempted civil extortion under California

law.

COUNSEL

Lawrence Dale Murray (argued), John Henning III, and

Robert C. Strickland, Murray & Associates, San Francisco,

California, for Plaintiffs-Appellants.

S. Ashlie Beringer (argued) and Molly Cutler, Gibson Dunn

& Crutcher, Palo Alto, California; Gail Ellen Lees, Gibson

Dunn & Crutcher, Los Angeles, California; and Aaron Schur,

Yelp Inc., San Francisco, California, for Defendant-Appellee.

OPINION

BERZON, Circuit Judge:

Today, individuals can share their opinions with the entire

world courtesy of a few taps on the keyboard. The appellee

in this case, Yelp! Inc. (“Yelp”), provides an online forum on

which its users express opinions as to services ranging from

dog walkers to taco trucks.

The appellees, Boris Levitt, Cats and Dogs Animal

Hospital, Inc. (“Cats and Dogs”), John Mercurio, and Dr.

Tracy Chan, are small business owners (collectively, “the

business owners”) who allege that Yelp extorted or attempted

to extort advertising payments from them by manipulating

user reviews and penning negative reviews of their

businesses. The business owners filed a class-action lawsuit

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4 LEVITT V. YELP! INC.

against Yelp for violations of California’sUnfairCompetition

Law (“UCL”), California Business & Professions Code

§ 17200 et seq., civil extortion, and attempted civil extortion.

The district court dismissed the lawsuit for failure to state

a claim. We review the dismissal de novo, see Wilson v.

Hewlett-Packard Co., 668 F.3d 1136, 1140 (9th Cir. 2012),

and, holding that the facts and legal theories alleged in the

business owners’ complaint are insufficient to make out a

prima facie case of unlawful or unfair business practices

against Yelp, affirm.

I.

A. Yelp’s Service

Yelp provides an online directory that allows registered

users to post reviews and rank businesses on a scale of one to

five stars. Based on these user rankings, Yelp then assigns

businesses an overall “star” rating. Businesses cannot opt out

of being listed on Yelp.

Not all user reviews submitted appear on a business’s

Yelp page or remain there after initially appearing. Reviews

can be removed by the reviewer, removed by Yelp for

violating Yelp’s “Review Guidelines” or “Terms of Service,”

or removed by an automated filtering software maintained by

Yelp. According to Yelp’s website, its filtering system

operates as follows:

Th[e] system decides how established a

particular reviewer is and whether a review

will be shown based on the reviewer’s

involvement on Yelp. While this may seem

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LEVITT V. YELP! INC. 5

unfair . . . this system is designed to protect

both consumers and businesses alike from

fake reviews (i.e., a malicious review from a

competitor or a planted review from an

employee). The process is entirely automated

to avoid human bias, and it affects both

positive and negative reviews. It’s important

to note that these reviews are not deleted (they

are always shown on the reviewer’s public

profile) and may reappear on your business

page in the future.

Yelp also offers businesses advertising opportunities on

its website for $300 to $1200 per month. Purchasing

advertising allows a business to: appear in advertisements

displayed above Yelp search results and on related business

pages; prevent competitors’ advertisements from appearing

on its Yelp page listing; enhance its page listing with photos;

and promote a favorite review to the top of its page.1

B. The Allegations Against Yelp

The business owners maintain that Yelp created negative

reviews of their businesses and manipulated review and

ratings content to induce them to purchase advertising

through Yelp. They urge that Yelp has thereby violated the

UCL through acts of extortion and, when not successful in

inducing payments to Yelp, attempted extortion. They also

1 Yelp states that the specific benefits of advertising “have changed

somewhat over time.” For example, Yelp no longer permits businesses to

highlight a “favorite review” and now offers a “video feature” for

advertisers’ Yelp pages.

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6 LEVITT V. YELP! INC.

allege separate causes of action for civil extortion and

attempted civil extortion.

The business owners seek to represent two subclasses of

businesses: those that declined to advertise with Yelp

(“nonsponsors”), and those that have, at some point,

purchased advertising (“sponsors”). They support their

claims by alleging that “approximately 200 Yelp employees

or individuals acting on behalf of Yelp have written reviews

of businesses on Yelp” and that Yelp’s Chief Executive

Officer admitted to a New York Times reporter that Yelp has

paid users to write reviews, although it does not do so directly

anymore.

The Third Amended Complaint contains the following

plaintiff-specific allegations:

a. Boris Levitt

Levitt, the owner of a furniture restoration business,

alleged that several positive reviews disappeared from his

business’s Yelp page, causing the overall star rating of his

business to decline. Levitt contacted Yelp to ask why a

certain positive review had disappeared from his business’s

page and was told by a Yelp agent that she could not assist

him.

Two months later, a Yelp sales representative contacted

Levitt to invite him to advertise with Yelp. Levitt declined,

stating that he already had a “high volume of users reviewing

his business page” and “an overall rating of 4.5 stars.”

According to Levitt, two days after he declined to

purchase advertising, several five-star reviews disappeared

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LEVITT V. YELP! INC. 7

from his page, leaving his business with an overall star rating

of three-and-a-half stars. Levitt asserted that “Yelp

manipulated the reviews of [his] business because he did not

purchase advertising,” and did so “as a threat” made to induce

him to purchase advertising. As a result of the lower overall

rating, Levitt alleged, his business reputation and revenues

declined.

b. Cats and Dogs Animal Hospital

Cats and Dogs is an animal hospital in Santa Barbara. Its

allegations center on reviews from two negative users.

Cats and Dogs contacted Yelp to request removal of the

first negative review, posted byYelp user “Chris R.,” because

the review referred to a visit that occurred outside of Yelp’s

twelve-month policy. That review was subsequently

removed, but another negative review from a different user,

“Kay K.,” showed up soon afterwards on the Cats and Dogs

Yelp page.

Cats and Dogs states that “soon after the appearance of

these negative reviews, [it] began receiving frequent, highpressure calls from Yelp sales representatives, who promised

to manipulate [Cats and Dogs’] listing page in exchange for

[Cats and Dogs’] purchasing . . . advertising.” Cats and Dogs

alleged it received a call from a Yelp sales representative who

stated that Yelp would “hide negative reviews” or “place

them lower on [Cats and Dogs] listing page” if Cats and Dogs

purchased advertising. Cats and Dogs declined. According

to Cats and Dogs, a week after it rejected this particularly

explicit advertising pitch, the Chris R. review reappeared,

followed by a second negative review from Kay K. Cats and

Dogs alleged that “Yelp re-posted the ‘Chris R’ and two ‘Kay

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8 LEVITT V. YELP! INC.

K’ reviews and/or manufactured its own reviews to instill fear

in [Cats and Dogs] to advertise.” Cats and Dogs further

alleged that “[a]s a result of Yelp’s conduct,” Cats and Dogs’

business revenues and reputation were injured.

c. Mercurio

Mercurio owns Wheel Techniques, an automobile body

repair shop. He alleged that Yelp posted “false reviews,”

meaning reviews not composed by actual customers, “as a

threat to induce Wheel Techniques to advertise.” He based

his allegation on the appearance of “negative reviews . . . on

Wheel Techniques’ Yelp review page” that did not

correspond to customer records and contemporaneous

“telephone calls from Yelp requesting that [Wheel

Techniques] purchase advertising.”

Mercurio stated that he “called Yelp to inquire about why

one of his competitors, known in the industry for its ‘shotty

[sic] work,’” had a high overall star rating. Yelp allegedly

responded that the competitor advertised and that “[Yelp]

work[s] with your reviews if you advertise with us.” Later,

when Mercurio declined an offer to advertise on Yelp, he

alleges that “[w]ithin minutes,” “a one-star review was

moved to the top of [Wheel Techniques’] Yelp review page

. . . as a threat to cause Wheel Techniques to fear that if it did

not pay Yelp money to advertise, the negative review would

remain at the top of its Yelp review page.”

Mercurio also alleged that he “was told . . . that a former

Yelp employee stated that Yelp . . . terminated a group of

sales employees . . . as a result of scamming related to

advertising.” The Third Amended Complaint does not

indicate who told Mercurio this information, nor does it

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LEVITT V. YELP! INC. 9

identify the Yelp employee who allegedly made the original

statement or of what the “scamming related to advertising”

consisted.

d. Dr. Tracy Chan

Chan, a dentist, stated that she received calls from a Yelp

sales representative “offer[ing] her lots of benefits, such as

the opportunity to keep Chan’s business ratings high by

hiding or burying bad reviews,” if she advertised with Yelp. 

According to Chan, the sales representative stated that

“although many Yelp reviews were manipulated by a

computer system, Yelp employees also had the ability to

remove reviews from a business’s Yelp page.”

Chan initially declined to purchase advertising from Yelp. 

Two or three days after doing so, “Yelp removed nine 5-star

reviews” from her page, causing her overall rating to drop

from five to three stars. Chan called Yelp to ask about the

decline in her overall rating, and was told that “Yelp ‘tweaks’

the ratings every so often and that [Yelp] could help her if she

signed up for advertising services with Yelp.” Chan alleged

that “Yelp removed positive reviews . . . as a threat to cause

Chan to fear that if she did not purchase advertising . . . her

business’s overall star rating would stay low.”

“[O]ut of fear of further manipulations,” Chan signed an

advertising contract with Yelp. According to Chan, just days

after signing the contract, her “overall rating increased to 4

stars and various five star reviews were reinstated by Yelp.” 

She believes the rating increase was the result of her agreeing

to advertise with Yelp.

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10 LEVITT V. YELP! INC.

Several months later, a Yelp sales agent asked Chan

whether she was interested in increasing her advertising

purchase with Yelp. When Chan declined, she “noticed that

her reviews were again declining.” That same month, Chan

cancelled her existing advertising contract with Yelp. Chan

alleged that after she cancelled, “Yelp removed positive

reviews . . . and replaced them with negative reviews . . . to

cause Chan to fear that if she did not pay Yelp for

advertising, Yelp would continue to remove positive reviews

from her [page].”

Chan’s overall rating fluctuated over the next year and a

half. She attributed dips in her rating to specific interactions

with Yelp. For example, Chan stated that Yelp “removed

several positive reviews,” prompting her to “post a negative

review about Yelp’s conduct” on her Yelp page. “Within two

to three days,” she alleged, Yelp removed more positive

reviews, causing her overall rating to “[fall] to 3 stars.” Over

a year later, Chan alleged that her overall rating fell again,

this time from four stars to three and a half stars, when “Yelp

removed six positive reviews” from her page after she

“posted a negative review about Yelp to her own website.” 

Chan asserted that the removal of positive reviews was done

“to induce [her] to pay for advertising and/or to discourage

her from posting negative information about Yelp.”

C. District Court’s Rulings

The district court dismissed the business owners’ Second

Amended Complaint for failure to state a claim upon which

relief could be granted. With respect to the business owners’

claim that Yelp’s conduct violated California’s UCL, the

district court ruled that: theories of extortion for failure to

remove negative user reviews were covered by Yelp’s

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LEVITT V. YELP! INC. 11

immunity under the Communications Decency Act of 1996

(“CDA”), 47 U.S.C. § 230(c)(1); there were insufficient facts

from which to infer that Yelp authored or manipulated the

negative reviews and ratings; and there were insufficient

factual allegations from which to infer communication of an

extortionate threat.

After the business owners amended their complaint to fix

these deficiencies, the district court again dismissed it for

failure to state a claim. Describing the allegations that Yelp

manufactures negative reviews as “entirely speculative,” the

district court concluded that the Third Amended Complaint

failed to allege facts sufficient to support a conclusion that

Yelp authored content. Even assuming Yelp employees had

authored reviews, the district court found only “a mere

possibility” that Yelp authored content to extort advertising

payments. The district court further found that “allegations

based on Yelp’s purported manipulation of user-generated

content” were immunized by the CDA. The separate civil

extortion and attempted civil extortion claims failed for the

same reasons.

This appeal followed.

II.

The business owners maintain that Yelp attempted to

extort and did extort advertising payments from them by

wrongfully threatening them with economic loss. We hold

that the business owners have failed to state a claim under

California law on which relief can be granted. Accordingly,

we do not address Yelp’s defense of immunity under the

CDA.

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12 LEVITT V. YELP! INC.

A. California’s Unfair Competition Law

California’s Unfair Competition Law prohibits “any

unlawful, unfair or fraudulent business act or practice and

unfair, deceptive, untrue or misleading advertising.” Cal.

Bus. & Prof. Code § 17200. “[I]t establishes three varieties

of unfair competition — acts or practices which are unlawful,

or unfair, or fraudulent.” Cel-Tech Commc’ns, Inc. v. L.A.

Cellular Tel. Co., 20 Cal. 4th 163, 180 (1999) (internal

quotation marks omitted).

In prohibiting “any unlawful” business practice, the UCL

“borrows violations of other laws and treats them as unlawful

practices that the unfair competition law makes independently

actionable.” Id. (internal quotation marks omitted); see also

Davis v. HSBC Bank Nev., N.A., 691 F.3d 1152, 1168 (9th

Cir. 2012). The business owners premise their “unlawful”

UCL claim on Yelp’s allegedly extortionate conduct.

Specifically, they allege that the following conduct

amounts to extortion: (1) Yelp manipulating user-generated

reviews to induce them to buy advertising; and (2) Yelp

creating its own negative reviews of their businesses to

induce them to buy advertising. They do not assert any

claims based on failure to remove negative third-party

reviews of their businesses.

We conclude, first, that Yelp’s manipulation of user

reviews, assuming it occurred, was not wrongful use of

economic fear, and, second, that the business owners pled

insufficient facts to make out a plausible claim that Yelp

authored negative reviews of their businesses. Accordingly,

we agree with the district court that these allegations do not

support a claim for extortion.

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LEVITT V. YELP! INC. 13

B. Unlawful (Extortionate) Business Practices

We first consider whether the business owners have stated

a claim of extortionate, and therefore unlawful, business

practices under California’s UCL.

1

The Hobbs Act defines extortion as “the obtaining of

property from another, with his consent, induced bywrongful

use of actual or threatened force, violence, or fear, or under

color of official right.” 18 U.S.C. § 1951(b)(2) (emphasis

added). Threats of economic harm made to “obtain[] . . .

property from another,” id., are not generally considered

“wrongful,” id., where the alleged extortioner has a legitimate

claim to the property obtained through such threats. 

Brokerage Concepts, Inc. v. U.S. Healthcare, Inc., 140 F.3d

494, 523 (3d Cir. 1998). Therefore, unless a person has a preexisting right to be free of the threatened economic harm,

threatening economic harm to induce a person to pay for a

legitimate service is not extortion. See United States v. Vigil,

523 F.3d 1258, 1265 (10th Cir. 2008) (citing United States v.

Enmons, 410 U.S. 396, 400 (1973)); Viacom Intern. Inc. v.

Icahn, 747 F. Supp. 205, 213 (S.D.N.Y. 1990).

Enmons is the starting point for the interpretation of

“wrongful” in the extortion statute. 410 U.S. 396 (1973). 

Enmons held that the use of violence in a labor strike to

obtain higher wages and other benefits did not constitute

extortion under the Hobbs Act. Id. at 400. In so holding,

Enmons explained that “[t]he term ‘wrongful,’ which . . .

modifies the use of each of the enumerated means of

obtaining property — actual or threatened force, violence, or

fear — would be superfluous if it only served to describe the

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14 LEVITT V. YELP! INC.

means used.” Id. at 399. “Rather, ‘wrongful’ . . . limits the

statute’s coverage to those instances where the obtaining of

the property would itself be ‘wrongful’ because the alleged

extortionist has no lawful claim to that property.” Id. at 400. 

Thus, Enmons concluded that the “[Hobbs] Act does not

apply to the use of force to achieve legitimate labor ends.” 

Id. at 401. Enmons’ reasoning “created the claim of right

defense to charges of extortion under the Hobbs Act.” United

States v. Sturm, 870 F.2d 769, 772 (1st Cir. 1989).

As to violent threats, we have “declined to extend Enmons

beyond the context of a labor dispute,” United States v.

Daane, 475 F.3d 1114, 1119 (9th Cir. 2007), “read[ing]

Enmons as holding only that the use of violence to secure

legitimate collective bargaining objectives is beyond the

reach of the Hobbs Act,” United States v. Thordarson,

646 F.2d 1323, 1327 (9th Cir. 1981). We have also

recognized that, aside from violence, “some attempts to

obtain property . . . are so inherently wrongful that whether

the defendant had a lawful claim to the property demanded is

not relevant in determining whether extortion or attempted

extortion has been proven.” United States v. Villalobos,

748 F.3d 953, 956 (9th Cir. 2014).

Though the claim-of-right defense has been limited in

other contexts, see id., it continues to apply to allegations of

extortion involving threats of economic harm. So long as the

alleged extortioner seeks payment for services that have some

“objective value,” Viacom, 747 F. Supp. at 212, n.7, he has “a

lawful claim to the property obtained.” Brokerage Concepts,

140 F.3d at 524. Consequently, barring any “preexisting right

to be free of the economic fear . . . utilized” on the part of the

threatened party, United States v. Tobin, 155 F.3d 636, 640

(3d Cir. 1998), “purely economic threats” do not violate the

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LEVITT V. YELP! INC. 15

Hobbs Act, id.; see also George Lussier Enters., Inc. v.

Subaru of New England, Inc., 393 F.3d 36, 50 (1st Cir. 2004).

In Brokerage Concepts, for example, the Third Circuit

considered whether payments received by a health

maintenance organization (“HMO”) were the product of

extortion by wrongful use of economic fear. 140 F.3d at 501. 

In that case, the HMO refused to approve a pharmacy

branch’s application to join the HMO’s network of medical

prescription providers unless the branch discontinued its

contractual relationship with a particular health care

consulting firm and gave its business to one of the HMO’s

subsidiaries. Id. The HMO also applied various “hard-ball”

negotiation tactics, such as auditing and putting a “freeze” on

the pharmacy’s other locations, which had previously been

approved to join the HMO’s network. Id. at 501, 506. 

Eventually, the pharmacy branch acquiesced, dropped its

existing healthcare consulting firm, and made payments to the

HMO’s subsidiary.

Recognizing the undoubted value of access to the HMO’s

network, Brokerage Concepts concluded that the payments to

the HMO’s subsidiary were not the product of extortion. Id.

at 525–26. No law prohibited the HMO from conditioning

access to its network on such payments, and the pharmacy

had no “right” to access the network. Id. at 526. Brokerage

Concepts therefore declined to interpret a “mutually

beneficial exchange of property” between “two private

parties” as “the wrongful use of economic fear.” Id.

Similarly, in Sturm, the First Circuit held that “the term

‘wrongful’ requires the government to prove, in cases

involving extortion based on economic fear, that the

defendant knew that he was not legally entitled to the

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16 LEVITT V. YELP! INC.

property that he [tried to obtain].” 870 F.2d at 774. Insisting

that “hard bargaining” does not amount to extortion, the

Seventh Circuit has likewise concluded that “[w]here the

defendant has a claim of right to property and exerts

economic pressure to obtain that property, that conduct is not

extortion and no violation of the Hobbs Act has occurred.” 

Rennell v. Rowe, 635 F.3d 1008, 1011, 1012 (7th Cir. 2011);

see also United States v. Capo, 791 F.2d 1054, 1062–63 (2d

Cir. 1986) (noting “that fear of economic loss plays a role in

many business transactions that are entirely legitimate” and

therefore the Hobbs Act reaches only “the exploitation of the

fear of economic loss in order to obtain property to which the

exploiter is not entitled”), vacated in part on other grounds,

817 F.2d 947 (2d Cir. 1987) (en banc).

As to what one may threaten to do in the economic

context, Rothman v. Vedder Park Management, is instructive. 

912 F.2d 315 (9th Cir. 1990). In that case, a group of tenants

sued the owner and operator of a mobile-home park, claiming

the owner violated the Racketeer Influenced and Corrupt

Organizations Act, 18 U.S.C. §§ 1961–68, by using

extortionate tactics to induce them to sign leases. Id. at 316. 

We considered, under both the Hobbs Act and California law,

whether alleged threats that non-signers would have to pay

their own utility bills and would be subject to future rent

increases of undisclosed amounts were wrongful. Id. at

317–18.

We concluded that these threats were not wrongful and

therefore not extortionate. Id. at 318. Because the tenants did

not allege that the park owner “may not raise the rent of those

who have not signed the lease or that it may not refuse to pay

their utility bills,” the tenants had no pre-existing right to be

free of such threats. Id. Moreover, although the park owner

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LEVITT V. YELP! INC. 17

threatened to raise the rent, he had a right to condition use of

his mobile-home park on payment. Id. The threats alleged

did not, therefore, amount to extortion. Id. In so holding, we

relied on the “general rule” that “what you may do in a

certain event you may threaten to do, that is, give warning of

your intention to do in that event, and thus allow the other

person the chance of avoiding the consequences.” Id.

(quoting McKay v. Retail Auto. Salesmen’s Local Union No.

1067, 16 Cal. 2d 311, 321 (1940)).

Sosa v. DIRECTV, Inc., is similarly instructive. 437 F.3d

923, 939–40 (9th Cir. 2006). In that case, we considered

whether claim-settlement letters sent by DIRECTV

constituted “extortion” within the meaning of the Hobbs Act

and California law. Id. at 939. We declined to adopt a broad

construction of the Hobbs Act, noting that while “[i]t is

certainly possible, perhaps even likely, that the threat of being

faced with a costly lawsuit induced ‘fear’ in [the plaintiffs],

. . . extortion requires more than fear.” Id. (citing Rothman,

912 F.2d at 318). We emphasized that “[t]he use of the fear

must be ‘wrongful.’” Id. (citing Rothman, 912 F.2d at 318).

And, although “the assertion of weak claims predicated on

unsupportable factual allegations may be said in some sense

to be wrongful,” we rejected a reading of either the Hobbs

Act or California’s extortion statute that would impose

liability for “threats of litigation where the asserted claims do

not rise to the level of a sham.” Id. at 939–40.2

Like the Hobbs Act, California law states that “[e]xtortion

is the obtaining of property from another, with his consent . . .

2 Our holding in Sosa was also influenced by the need to avoid an

interpretation of extortion that would impinge on the defendant’s First

Amendment rights. Id. at 940.

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18 LEVITT V. YELP! INC.

induced by a wrongful use of force or fear.” Cal. Penal Code

§ 518 (emphasis added). California law also provides that

“[f]ear, such as will constitute extortion, may be induced by

a threat . . . [t]o do an unlawful injury to the person or

property of the individual threatened,” id. § 519(1) (emphasis

added), “thus excluding fear induced by threat to do a lawful

injury,” People v. Beggs, 178 Cal. 79, 83 (1918); see also In

re Nichols, 82 Cal. App. 73, 77 (Dist. Ct. App. 1927). 

Accordingly, the elements of extortion under federal and

California law are substantially the same. See Sosa, 437 F.3d

at 939–40; Rothman, 912 F.2d at 317–18. The plaintiffs here

point to no pertinent distinctions between the federal and

California statutes.3

In sum, to state a claim of economic extortion under both

federal and California law, a litigant must demonstrate either

that he had a pre-existing right to be free from the threatened

harm, or that the defendant had no right to seek payment for

the service offered. Any less stringent standard would

transform a wide variety of legally acceptable business

dealings into extortion.

2

Given these stringent requirements, the business owners

in this case failed sufficiently to allege that Yelp wrongfully

threatened economic loss by manipulating user reviews.

3 Although we have noted that California does not have a claim-of-right

defense, see Gomez v. Garcia, 81 F.3d 95, 97 (9th Cir. 1996), the state

authority we relied on for that conclusion did not involve threats of

economic harm, see, e.g., Beggs, 178 Cal. at 83 (threats to accuse a person

of a crime); People v. Serrano, 11 Cal. App. 4th 1672, 1678 (Ct. App.

1992) (recovering debt by kidnapping and holding a person for ransom).

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LEVITT V. YELP! INC. 19

To start, we note that there is no allegation that Yelp

directly threatened economic harm if the business owners

refused to purchase advertising packages from Yelp. While

the lack of such express threats does not alone dispose of the

extortion claims, see United States v. Marsh, 26 F.3d 1496,

1501 (9th Cir. 1994), it does make the business owners’ case

considerably more difficult. Absent explicit threats of

economic harm, the business owners must allege sufficient

facts to support the inference, In re Century Aluminum Co.

Sec. Litig., 729 F.3d 1104, 1107 (9th Cir. 2013), that Yelp

“inten[ded] . . . to induce payment through the use of threats

or the exploitation of [economic] fears,” United States v.

Greger, 716 F.2d 1275, 1278 (9th Cir. 1983).

We begin with Chan, who alleges that Yelp extorted her

by removing positive reviews from her Yelp page. Chan

asserts that she was deprived of the benefit of the positive

reviews Yelp users posted to Yelp’s website, and that, had

she received the benefits of the positive reviews, they would

have counteracted the negative reviews other users posted.

But Chan had no pre-existing right to have positive

reviews appear on Yelp’s website. She alleges no contractual

right pursuant to which Yelp must publish positive reviews,4

nor does any law require Yelp to publish them. By

withholding the benefit of these positive reviews, Yelp is

withholding a benefit that Yelp makes possible and

maintains. It has no obligation to do so, however. Chan

does not, and could not successfully, maintain that removal

4 Chan alleges that she purchased advertising after a Yelp representative

told her that Yelp could “tweak” her reviews if she advertised with Yelp. 

But Chan does not allege that this pledge was part of her advertising

contract with Yelp.

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20 LEVITT V. YELP! INC.

of positive user-generated reviews, byitself, violates anything

other than Yelp’s own purported practice. “[W]hat [Yelp]

may do in a certain event [Yelp] may threaten to do.”

Rothman, 912 F.2d at 318. Moreover, Chan does not allege

that the advertising Yelp sold her was a valueless sham, or

that she was already entitled to the advertising privileges

Yelp induced her to buy. See Viacom, 747 F. Supp. at 212

n.7. We thus “deal with a very narrow subset of the potential

universe of extortion cases: one involving solely the

accusation of the wrongful use of economic fear where two

private parties have engaged in a mutually beneficial

exchange of property.” Brokerage Concepts, 140 F.3d at

525–26.

As Chan alleges no independent barrier to the ratingsmanipulation of which she complains, and as there is no

allegation that Yelp’s advertising services are, objectively,

worthless, see Viacom, 747 F. Supp. at 212 n.7, any implicit

threat by Yelp to remove positive reviews absent payment for

advertising was not wrongful within the meaning of the

extortion statutes.

This conclusion is not entirely the end of the matter, as

Chan alleges that the ratings manipulation negativelyaffected

her “business’s reputation.” But Chan does not connect her

claim of reputational harm to a specific allegation of

wrongful conduct.5 We note, too, that unlike the other

5 By the reference to reputational injuries, the business owners may have

meant to invoke trade libel law as the basis for the wrongfulness element

of extortion. But as the business owners have not pled the other elements

of trade libel, see Gregory v. McDonnel Douglas Corp., 17 Cal. 3d 596,

600 (1976); City of Costa Mesa v. D’Alessio Invs., LLC, 214 Cal. App. 4th

358, 375–76 (Ct. App. 2013), we do not decide whether a sufficient

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LEVITT V. YELP! INC. 21

business owners, Chan at one time had a contractual

relationship with Yelp. It may be that by manipulating

Chan’s ratings to induce her to increase her advertising

dollars, Yelp “breached [its] duties under the contract[ ].” 

Rennell, 635 F.3d at 1014. “But those claims should be

pursued through state-law theories of contract . . . — not

[extortion].” Id.

Chan’s pleadings thus fail to allege that deflation of her

business’s overall rating resulting from removing positive

reviews constitutes “wrongful” conduct, and she therefore

fails to state a claim of economic extortion.

Levitt and Mercurio similarly allege that Yelp attempted

to extort them by removing positive user reviews. As with

Chan, such allegations are insufficient to show that Yelp

threatened them wrongfully.

The other brand of extortionate ratings manipulation the

business owners allege is the re-posting of negative reviews

and the placement of negative reviews at the top of the

business owners’ Yelp pages. Business owners Mercurio and

Cats and Dogs bring these allegations. Here, too, however,

Cats and Dogs and Mercurio have no claim that it is

independently wrongful for Yelp to post and arrange actual

user reviews on its website as it sees fit. The business owners

may deem the posting or order of user reviews as a threat of

economic harm, but it is not unlawful for Yelp to post and

sequence the reviews. As Yelp has the right to charge for

legitimate advertising services, the threat of economic harm

that Yelp leveraged is, at most, hard bargaining.

allegation of trade libel could supply the wrongfulness element for

extortion purposes.

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22 LEVITT V. YELP! INC.

C. Yelp’s Alleged Authoring of Negative Reviews

We next consider whether the business owners have

adequately pled a claim of extortion based on Yelp’s alleged

authoring of negative reviews.

To survive a motion to dismiss for failure to state a claim

after the Supreme Court’s decisions in Ashcroft v. Iqbal,

556 U.S. 662 (2009) and Bell Atlantic Corp. v. Twombly,

550 U.S. 544 (2007), the business owners’ factual allegations

“must . . . suggest that the claim has at least a plausible

chance of success.” In re Century Aluminum, 729 F.3d at

1107. In other words, their complaint “must allege ‘factual

content that allows the court to draw the reasonable inference

that the defendant is liable for the misconduct alleged.’” Id.

(quoting Iqbal, 556 U.S. at 678).

Following Iqbal and Twombly, we have attempted to

reconcile the plausibility standard as set out in those rulings

with the more lenient pleading standard the Court has also, at

times, applied. See Eclectic Props. E., LLC v. Marcus &

Millichap Co., 751 F.3d 990, 996 (9th Cir. 2014) (citing

Swierkiewicz v. Sorema, N.A., 534 U.S. 506 (2002) and

Erickson v. Pardus, 551 U.S. 89 (2007) (per curiam)). While

recognizing some tension among the Court’s pleadingstandards cases, we have settled on a two-step process for

evaluating pleadings:

First, to be entitled to the presumption of

truth, allegations in a complaint or

counterclaim may not simply recite the

elements of a cause of action, but must

contain sufficient allegations of underlying

facts to give fair notice and to enable the

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LEVITT V. YELP! INC. 23

opposing party to defend itself effectively.

Second, the factual allegations that are taken

as true must plausibly suggest an entitlement

to relief, such that it is not unfair to require

the opposing party to be subjected to the

expense of discovery and continued litigation.

Id. (quoting Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir.

2011)). In all cases, evaluating a complaint’s plausibility is

a “context-specific” endeavor that requires courts to “draw on

. . . judicial experience and common sense.” Id. at 995–96

(internal quotation marks omitted).

Applying this standard, we conclude that the business

owners have not alleged sufficient facts to support their claim

that Yelp authored negative user reviews of the businesses in

question.

Only two business owners allege that Yelp authored

negative reviews of their businesses: Cats and Dogs and

Mercurio. Cats and Dogs’ allegations concern negative

reviews from just two users, Chris R. and Kay K. Cats and

Dogs admits that the Chris R. review corresponds with an

actual client visit, as it complained to Yelp that the review

was posted more than a year after the visit. In light of this

acknowledgment, common sense suggests that Yelp was not

the author of the Chris R. review. So the allegation that Yelp

itself authored negative reviews must boil down to the two

reviews attributed to Kay K.

The facts alleged in the complaint do not plausibly

establish that Yelp authored the Kay K. review. Yelp is a

forum for consumers to review businesses, and huge numbers

of consumers do just that. For Cats and Dogs to make a

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24 LEVITT V. YELP! INC.

plausible claim that Yelp authored the Kay K. reviews, it

must plead facts tending to demonstrate that the Kay K.

review was not, as is usual, authored by a user. Cats and

Dogs pleads no such facts. In the Second Amended

Complaint, Cats and Dogs suggested that the Kay K. reviews

were authored not by Yelp, but by the same person who

authored the Chris R. posts or by a person who had

vandalized the hospital. And while the Third Amended

Complaint alleges generally that “approximately 200 Yelp

employees or individuals acting on behalf of Yelp have

written reviews of business on Yelp,” and that Yelp’s CEO

admitted in a New York Times blog post that Yelp has paid

users to write reviews, nothing connects these general

allegations to the specific, negative reviews complained of

here.

Mercurio fares no better. He surmises that because he has

no records of doing the work cited in the review, and because

the names of the users do not match the names of his

customers, Yelp authored the negative reviews. But even if

a particular review was not accurate as to the work done or

the customer’s name, the inaccuracy does not make it

plausible that it was Yelp — as opposed to a competitor, or

a disgruntled customer hiding behind an alias, or an angry

neighbor, just to give a few possibilities — that authored the

offending review.

Accordingly, we agree with the district court that the

Third Amended Complaint does not allege sufficient facts

from which to infer that Yelp authored the negative reviews

of which Cats and Dogs and Mercurio complain.

For these reasons and the reasons explained in Part II.B

of this opinion, we conclude that none of the business owners

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LEVITT V. YELP! INC. 25

have stated a claim of “unlawful” conduct on the basis of

extortion. We therefore affirm the dismissal of the separate

claims of civil extortion and attempted civil extortion, as

well.6

D. The UCL “Unfair” Prong

“Each prong of the UCL is a separate and distinct theory

of liability,” and so “the ‘unfair’ practices prong offers

[plaintiffs] an independent basis for relief.” Lozano v. AT &

T Wireless Servs., Inc., 504 F.3d 718, 731 (9th Cir. 2007). At

least with respect to business-competitor cases, to state a

claim under the UCL’s “unfair” prong the alleged unfairness

must “be tethered to some legislatively declared policy or

proof of some actual or threatened impact on competition.” 

Cel-Tech, 20 Cal. 4th at 186–87.

The business owners acknowledge that the Cel-Tech

standard applies here. Although this case is not a suit

involving “unfairness to the defendant’s competitors,”

Lozano, 504 F.3d at 735 (emphasis added), as Yelp does not

compete with the business owners, the crux of the business

owners’ complaint is that Yelp’s conduct unfairly injures

their economic interests to the benefit of other businesses

who choose to advertise with Yelp.

In business-competitor claims, “the word ‘unfair’ . . .

means conduct that threatens an incipient violation of an

antitrust law, or violates the policy or spirit of one of those

laws because its effects are comparable to or the same as a

violation of the law, or otherwise significantly threatens or

6 We do so without reaching the question of whether California courts

recognize a distinct tort of civil extortion.

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26 LEVITT V. YELP! INC.

harms competition.” Cel-Tech, 20 Cal. 4th at 187. Under

this standard, the business owners have not stated a claim that

Yelp violated the UCL’s prohibition of unfair business

practices.

The business owners do not allege that Yelp violated any

“legislatively declared policy” other than the prohibitions on

extortion discussed above. For the reasons discussed, they

have not pled facts sufficient to support an inference of

extortion.

As to violations of antitrust principles, the business

owners allege generally that Yelp’s conduct “harms

competition by favoring businesses that submit to Yelp’s

manipulative conduct and purchase advertising to the

detriment of competing businesses that decline to purchase

advertising.” This very general allegation does not satisfy

Cel-Tech’s requirement that the effect of Yelp’s conduct

amounts to a violation of antitrust laws “or otherwise

significantly threatens or harms competition.” Id.

For these reasons, we conclude that the UCL claim fails

under the “unfair” prong, as well.7

7 The business owners suggest that the district court should have allowed

them to participate in discovery before granting the motion to dismiss, so

that the business owners could have marshaled facts to support their

allegations. Because the business owners sought discovery relating to

Yelp’s challenge to their standing, which Yelp does not renew on appeal,

and because we affirm the dismissal based on the Third Amended

Complaint’s failure to state a claim, the discovery sought could not have

affected our decision.

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LEVITT V. YELP! INC. 27

III.

The business owners’ Third Amended Complaint fails to

state a claim under California’s unfair competition laws, and

fails to sufficiently allege extortion or attempted extortion.

We emphasize that we are not holding that no cause of

action exists that would cover conduct such as that alleged, if

adequately pled.8 But for all the reasons noted, extortion is an

exceedingly narrow concept as applied to fundamentally

economic behavior. The business owners have not alleged a

legal theory or plausible facts to support the theories they do

argue.

The judgment of the district court is, accordingly,

AFFIRMED.

8

 Again, we are not considering whether the CDA would pose a barrier

to any such claims.

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