Metropolitan News-Enterprise


Wednesday, August 21, 2013


Page 1


C.A. Allows Suit Against Better Business Bureau Over Rating




A company that brokers household moving services can sue the local Better Business Bureau for disparaging its service on the BBB’s website, the Court of Appeal for this district ruled yesterday.

Div. Seven, in an unpublished opinion by Los Angeles Superior Court Judge John Segal, sitting by designation, said New York-based Budget Van Lines, Inc. had presented a prima facie case of libel against Better Business Bureau of the Southland, Inc. The panel affirmed Judge Michael Solner’s order denying the BBB’s anti-SLAPP motion.

Budget is a “household goods broker”—a company that arranges for moving companies to transport household goods—and has been doing business since 2005. It claims that the failing grade and other disparaging comments posted on the BBB’s website, including statements that it engaged in “grossly misleading” advertising and failed to comply with legal requirements regarding licensing and registration, as well as the Southland BBB’s efforts to have other BBB’s give the company failing grades, constituted libel, trade libel, and unfair competition.

Denied Motion

In denying the BBB’s special motion to strike, Solner ruled that Budget has a reasonable chance  to prove that it complies with licensing and registration laws, so that the BBB’s statement to the contrary was libelous per se. A meritorious claim of defamation as to a single statement is sufficient to defeat an anti-SLAPP motion, the judge ruled, so the plaintiff prevails on the issue, even if the other allegedly defamatory statements are non-actionable opinions.

Solner held in the process that Budget is not a public figure and that the allegedly defamatory “reliability reports” on the website are commercial speech.

Segal, writing for the Court of Appeal, agreed that Budget satisfied its burden of demonstrating “minimal merit” to its claims.

He rejected the BBB’s claims that the bureau was not specifically accusing Budget of being in violation of licensing laws, but merely giving a hypothetical illustration of a possible reason for an “F” grade. The placement of the statements on the website would clearly lead the reader to reasonably conclude that the reference to violation of licensing laws was aimed directly at Budget, the jurist said.

The statements explaining the “F” rating, plus the reliability report that “stated or strongly implied that Budget was not licensed,” were assertions of fact regarding Budget that the company may be able to prove were false, Segal said.

He cited a declaration of the company’s president laying out the company’s compliance with laws governing moving brokers, verification of the licensing of the local carriers who do the actual moving.

Prima Facie Case

Segal went on to say that the company also has a prima facie case of libel with regard to the claim that it engages in grossly misleading advertising. While use of the term “grossly misleading” may constitute mere opinion in some contexts, he said, this is not one of those contexts.

“The BBB holds itself out as an expert on the professionalism and trustworthiness of businesses,” he explained, and says that it evaluates advertising to promote business integrity. When the BBB says that a company engages in misleading advertising, he said, that statement “is reasonably susceptible to a defamatory interpretation,” adding that it will be up to the trier of fact to determine whether the statement is actually defamatory. 

The jurist went on to say that whether the “F” grade was defamatory was a “closer question,” and that the court did not have to decide it because the denial of the anti-SLAPP motion was correct based on the other statements. He also explained that by showing a prima facie case that the BBB had libeled it in the course of its business, the plaintiff necessarily made out a prima facie case on its claim under the Unfair Competition Law.

The case is Budget Van Lines, Inc. v. Better Business Bureau of the Southland, Inc., B235338.


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