The Texas Supreme Court has turned down a Blue Haven Pools & Spas franchisee that requested it hear a complaint against the local Better Business Bureau.
The Blue Haven office in Lewisville, Texas, about 20 miles outside Dallas, sued the Better Business Bureau of Metropolitan Dallas after losing its 30-year-old accreditation and seeing its rating drop from an A+ to an F because of a disagreement between the parties.
The BBB office approached the Blue Haven franchisee in 2010, requiring substantiation of the slogan “World’s Largest!” The phrase had been trademarked as part of Blue Haven’s national logo in 1991, and many offices used it in ads even earlier.
As proof, Blue Haven submitted Pool & Spa News’ Top 50 Builders lists showing the national builder at the No. 1 spot based on its reported residential construction revenue across all offices. Further, it said, the USA has the most active pool market across the globe and so, by deduction, Blue Haven is the world’s largest.
Blue Haven said it maintains an A+ rating with Fort Worth’s BBB, and that others have accepted the slogan and proof.
The BBB rejected the argument and, considering the stalemate, gave Blue Haven the option of resigning its accreditation. The builder declined, and the BBB revoked the accreditation and lowered the grade to an F. Blue Haven said it lost $750,000 to $1 million in business as a result.
In suing the BBB, Blue Haven claimed breach of contract, saying it had paid $1,000 per year to become an accredited business and had made a good-faith effort to substantiate the advertising claim. BBB also was accused of using wrongful means to interfere with the builder’s performance and interpreting its advertising requirements in an unreasonable manner. As its defense, BBB officials claimed free-speech rights in publishing the rating and said it gave the builder a fair chance at conforming with the advertising requirements.
The case never went to trial — the BBB moved that the suit be dismissed. When the lower court declined, the BBB appealed. Cases normally can’t be appealed at such an early stage; however, the BBB invoked a state free-speech law that allows it. The Appeals Court sided with the BBB, ordering that the case be dismissed and Blue Haven pay court costs.
In taking the case to the Texas Supreme Court, Blue Haven claimed the free-speech law was misused, saying it does not apply to actions, but only speech; it only protects people rather than organizations; and that it didn’t grant the BBB the right to approach the Court of Appeals before the case had actually gone to trial.
BBB countered that its rating constituted speech because it was published, that the law protects corporations, and that precedent and changes to the free-speech law allowed the BBB’s early-stage appeal.
The higher court declined the case, so the Appeals Court decision stands. But Blue Haven’s attorney sees similar suits down the road. “There are already many more cases on the same issues that have been filed with the Court,” said Dawn M. Grams Horak. “At issue in these cases is the Texas statute that is draconian and poorly drafted, and designed to give the BBB special protections not available to every other Texas litigant.”
