By Richard Burnett, Orlando Sentinel
Stung by a dismal mark last year, the KEL law firm has filed a federal lawsuit against the Better Business Bureau of Central Florida that challenges its rating system, accuses it of false advertising and seeks unspecified damages for alleged business defamation.
Orlando-based Kaufman, Englett and Lynd, took aim at the rating system, which gave the firm an "F" in mid-2011, citing its failure "to resolve the underlying cause of a pattern of (client) complaints." KEL later resigned under pressure from the BBB's accreditation program – the first law firm to drop out in the BBB's history.
But KEL's suit, filed last month in Orlando federal court, alleges the rating system is flawed, erroneous, misleading and, in short, anything but the unbiased process the BBB claims in its promotional material.
The bureau "intentionally provides biased and inconsistent ratings of businesses, specifically favoring businesses that have chosen to pay money to and participate in the Defendants own accreditation program," the suit said. It also named as defendants BBB chief Judy Pepper and the Council of Better Business Bureaus Inc., based in Washington, D.C.
It is the first time the local BBB has been sued in more than a decade and the third lawsuit in nearly 20 years, according to court records.
Last year, the bureau said KEL drew a poor rating because it consistently generated unresolved complaints from unhappy foreclosure-defense or loan modification clients, who claimed the firm took thousands of dollars from them but provided little or no assistance. The Florida Bar is also investigating similar complaints.
According to the suit, however, KEL said the BBB focused on a handful of unresolved client complaints, which represented a tiny fraction of the 25,000 cases it says it handled over three years.
The BBB ignored the nature of KEL's practice, the firm said, which has many foreclosure clients who are "under a tremendous amount of stress" and are more likely to complain because they don't understand "legal complexities" and have "the expectation of expeditious results."
"Many of the complaints forwarded to the BBB were baseless in nature and only lodged as an attempt by clients to harass KEL for situations in which the clients had unreasonable expectations," the suit said.
KEL said false information disseminated by the BBB hurt the law firm's business, discouraged prospective clients and upset existing ones. The firm has fielded more than 500 calls from clients seeking refunds and explanations since the BBB imposed its rating, the suit said.
KEL accuses the BBB of false advertising under federal law and business "disparagement," or defamation, under Florida common law. It seeks unspecified compensatory, punitive and special damages.
KEL lawyer Curtis Wilson said the firm's case is supported by a number of legal precedents, including a recent Nevada case in which a business accused the BBB there of falsely promoting itself as an unbiased, quasi-governmental agency. Wilson said the BBB settled that case and apologized.
But some legal experts said the law firm may have a tough road ahead: Most legal precedent tends to favor a BBB's rating practice as free speech that is constitutionally protected, as long as it is supported by facts.
Still, a BBB agency can't just publish information without proper due diligence to verify it, said Joseph W. Little, a professor emeritus at the University of Florida's Levin College of Law. The burden would be on KEL to prove reckless negligence by the BBB, he said.
"The BBB has common law right to express fair comment and honest opinion based on true facts," Little said. "If it does that, then it is protected speech and opinion, even though it is not the opinion the law firm would want them to have."
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