Law Firm Can't Pin BBB for False Advertising
(CN) - The Better Business Bureau will not have to face claims that it disparaged a law firm by publishing misleading reviews of its services, a federal judge ruled.
Kaufman, Englett & Lynd, a Florida-based law firm that does business in 20 states, sued the Better Business Bureau of Central Florida, BBB President Judy Pepper and the Council of Better Business Bureaus, alleging false advertising under the Lanham Act, "disparagement of business" and breach of contract claims.
The law firm claimed that the defendants, whose business involves rating other businesses, published disparaging and misleading reviews of its legal services - including an F rating - which were inaccurate and inconsistent with the bureau's own criteria for evaluating businesses. It also claimed that the defendants breached their accreditation agreement with the law firm by failing to apply certain standards.
But U.S. District Judge John Antoon ruled Wednesday that the alleged misrepresentations cannot constitute commercial advertising under the Lanham Act because the bureau does not compete commercially with the law firm.
Kaufman, Englett & Lynd failed to persuade Antoon that the bureau competed with the law firm because BBB's representations had driven current and prospective clients to other law firms whose favorable reviews it had published.
"That KEL's current and prospective clients may have taken their business to competing law firms on the basis of BBB and Pepper's alleged misrepresentations does not, however, place BBB and Pepper themselves in commercial competition with KEL," Antoon wrote.
The court noted that it lacked personal jurisdiction over the claims against the council, a foreign corporation that neither owns shares in the Florida BBB nor controls its daily operations.
Established in 1912 to set standards for marketplace trust and protect consumers, the council is headquartered in Arlington, Va. Local Better Business Bureaus are required to comply with the council's guidelines, but their boards of directors govern them independently.
"Although BBB pays dues to the council for the use of the council's marks and agrees to comply with the council's policies, there is no evidence that the council exercises operational control over BBB or that BBB otherwise exists solely to serve the council," the Feb. 13 ruling states.
Antoon refused to exercise supplemental jurisdiction over the state law claims, and said the law firm is free to pursue them in state court.