I do believe the guy is simply a bully that is flexing his muscles because his ego got hurt. His email to me was very confusing in that it seemed to reference more reviews than the one I put on his site and so I suspect it was a blanket email that he sends to anyone he doesn't like. Only after I was having a horrible time with this guy did I search out the company and find that he was indeed trashed on other sites where he didn't have the ability to edit or remove the offending reviews. In one of his communiques to me he did volunteer that he edits the reviews and he has of course removed my review from his site.
There are two big take aways from this experience:
Never trust a review.
Be very careful about posting a review and engaging someone that challenges you.
Ty's posting with definitions is really something to keep in mind. I actually looked up other legal definitions and yes indeed this guy doesn't have a leg to stand on. That said, bullies can make your life a living hell and can indeed succeed in suing you. Also note that many of the things you sign are often contracts that prevent you from posting a negative review. Take a careful look at the forms you sign when going to a hotel for example.
My research into these types of lawsuits shows that SLAPP (strategic lawsuit against public participation) and frivolous lawsuits can be defenses but even with these defenses any type of escalation or statements that are not 100% factual and true could get you in deep trouble. Such escalation or falsification can go either way; that is, it can damn both the party being accused as well as the accuser.
Ultimately it is a cold cruel world full of bullies. I see everyday media reports and legislation that is attempting to prevent internet bullying. I guess these efforts need to extend beyond the SLAPP legislation to something that will have a bit more bite. As for me, I will hence force refrain from providing reviews in the future and will never trust a review again; especially if the site only has positive reviews.