Can You Sue the BBB for an F?
Can you sue the Better Business Bureau for giving your business an “F?” And why should all consumer-facing businesses care take note of this issue?
For decades, the Better Business Bureau has been providing information to consumers about the quality of various businesses. Businesses are assigned grades from A to F depending on several factors. Recently, a Florida law firm, Kaufman, Englett & Lynd (KEL) sued the BBB after receiving a grade of F.
The Lanham Act is the Federal law that covers trademark and unfair competition. It includes a legal cause of action for businesses who have been harmed by false and misleading descriptions. From Section 1125(a):
(1) Any person who, on or in connection with any goods or services, or any container for goods, uses in commerce any word, term, name, symbol, or device, or any combination thereof, or any false designation of origin, false or misleading description of fact, or false or misleading representation of fact, which—
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(B) in commercial advertising or promotion, misrepresents the nature, characteristics, qualities, or geographic origin of his or her or another person’s goods, services, or commercial activities,
shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act.
The US District Court for the Middle District of Florida ruled against KEL and in favor of the BBB. (A PDF of the opinion can be found here.) Their reasoning was straightforward:
It is obvious…that BBB and Pepper do not compete with KEL. KEL is a law firm, whereas BBB is a non-profit corporation in the business of evaluating and rating other businesses…KEL nonetheless suggests that BBB “participate[s] in competition with Plaintiff” because their representations have cost KEL current and prospective clients and they have accredited and published favorable reviews of other law firms that pay a fee to maintain their accreditation…That KEL’s current and prospective clients may have taken their business to competing law firms on the basis of BBB[‘s]…alleged misrepresentations does not, however, place BBB…in commercial competition with KEL.
Simply put, because the BBB was not in direct competition with KEL, the Court found that KEL could not obtain legal relief for BBB’s alleged misrepresentations under the Lanham Act.
Larger Implications
OK, so your business hasn’t been given an F by the BBB (fortunately) – why should you care about this issue? Because it is a reminder of the limitations a business faces when they receive a bad review. The general proposition here – that a business can’t sue for damages over a negative review of this type – could, in theory, be applied to other ratings agencies, Yelp, and the like. Only when the reviewer is a direct competitor and the information is false can this provision of the Lanham Act be used to obtain legal relief.
Social Media Shaming
Finally, this provides an opportunity to consider another, non-legal factor that a business should consider when confronted with a bad review: social media shaming. There have been countless examples of this phenomenon, and businesses should give it a great deal of thought. The concept is simple – if you try to take legal action over a bad review, and the other party publicizes the issue via social media, your reputation and goodwill might suffer even greater damage than the original review would have caused. The worst result would be to take a bad review that few people might actually encounter and give someone an opportunity to spread the news far and wide.
Businesses would be well advised to take a cautious approach to these issues and to try to resolve them in a friendly, non-confrontational manner whenever possible.
