The Red Monkey

Two law firms, Beck & Lee

from Miami and The Weston Firm

in San Diego, have filed a class action lawsuit

in Los Angeles federal court alleging unfair business practices by local business review and rating website operator Yelp

.

The plaintiff in the suit, a veterinary hospital in Long Beach, CA, is said to have requested that Yelp remove a negative review from the website, which was allegedly refused by the San Francisco startup, after which its sales representatives repeatedly contacted the hospital demanding payments of roughly $300 per month in exchange for hiding or deleting the review.

Sounds familiar, you say?

You may be thinking of last year, when East Bay Express ran an explosive story, basically accusing Yelp of being in the %u2018Business of Extortion 2.0%u2032

, which covered similar ground. Shortly after reporter Kathleen Richards published the article, Yelp vehemently denied everything

and called her piece inaccurate

.

Now, the company will have to defend itself in court rather than on its company blog.

The lawsuit essentially alleges that the heavily funded

startup runs an %u201Cextortion scheme%u201D and has %u201Cunscrupulous sales practices%u201D in place to generate revenue, in which the company%u2019s employees call businesses demanding monthly payments in the guise of advertising contracts, in exchange for removing or modifying negative reviews.

The case, which is styled Cats and Dogs Animal Hospital Inc. v. Yelp Inc., was filed on February 23, 2010, and is pending in the U.S. District Court for the Central District of California. We have an e-mail in with Yelp and are awaiting a response.

Update: a Yelp representative commented as follows:

Yelp provides a valuable service to millions of consumers and businesses, based on trusted content. This is evidenced by advertisers and non-advertisers, who each have negative and positive reviews. While we haven%u2019t seen the suit yet, anyone can file one, and since the allegations are false we will dispute them aggressively.%u201D

The class action lawsuit comes mere weeks after Yelp took a large investment from Elevation Partners, and months after we reported the company walked away from a $550 million Google acquisition deal.

(Image via Gawker

)

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CrunchBase Information

Yelp

Website:	yelp.com
Location:	San Francisco, California, United States
Founded:	July 1, 2004
Funding:	$56M

Another company founded in 2004 by two former PayPal employees, Yelp is a local reviews website covering almost 40 states. Yelp also launched in the UK in January 2009. Users write and read reviews about%u2026 Learn More

Information provided by CrunchBase