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A Philadelphia jury Tuesday rejected a defamation claim against the Better Business Bureau of Eastern Pennsylvania in a suit brought by Progressive Business Publications, a Malvern-based business newsletter company that said it was unfairly assigned an “unsatisfactory” business rating. In the suit, Progressive Business Publications v. Better Business Bureau of Eastern Pennsylvania, PBP claimed that the Better Business Bureau never investigated the alleged consumer complaints that led it to downgrade PBP’s longtime “satisfactory” rating to “unsatisfactory.” The negative report caused some customers to cancel their subscriptions, the suit said. But the Better Business Bureau insisted in court papers that its report on PBP was literally true because it had received more than 300 customer complaints about the company’s telemarketing and business practices. The report, quoted in the suit, said PBP “has an unsatisfactory business performance record due to a pattern of customer complaints alleging billing for unordered merchandise. Some customers have claimed that they canceled their subscriptions but their cancellations were not honored.” According to court papers, the Better Business Bureau later amended the report to include PBP’s rebuttal: “The company claims it has a liberal cancellation policy permitting the customer to cancel anytime within the first three months of the telephone order and receive a refund on all unsent issues.” The rebuttal also said that the number of customer complaints about PBP was “negligible compared to its volume of business.” In the suit, PBP contended that the alleged customer complaints did not represent a “pattern” because they represented “a minuscule percentage of PBP’s business.” The suit said the complaints related to “less than .005 percent of all orders received by PBP,” and that the company had less than two complaints per office per year, and less than one complaint for every 15 telemarketing representatives. According to PBP’s Internet Web site, the company has 15 offices in Pennsylvania and New Jersey and employs more than 600 workers. Among its newsletter publications are: “CFO & Controller Alert,” “What’s Working in Credit & Collection,” “Keep Up to Date on Accounts Payable,” “Information Technology Adviser” and “Internet Marketing Report.” Defense attorney Paul D. Weller of Morgan Lewis & Bockius said the suit was the first defamation case against a Better Business Bureau anywhere in the United States in more than 10 years that went to a jury trial. The jury deliberated less than three hours, Weller said. Plaintiff’s attorney Wayne Mack of Duane Morris said he was disappointed by the verdict, but he is confident that PBP will win a new trial on appeal because the trial judge incorrectly instructed the jury to apply an “actual-malice” standard. Mack said Philadelphia Common Pleas Judge Sheldon C. Jelin also erred by barring PBP from presenting some of its most compelling evidence. In court papers, Weller argued that under Pennsylvania law, the Better Business Bureau is entitled to a “conditional privilege” that protects any communication made “from a proper motive, in a proper manner and based upon reasonable cause.” Courts in other states, Weller argued, have also granted a “qualified privilege” to the Better Business Bureau to protect consumer affairs reporting from defamation claims. Weller argued that the Better Business Bureau is a not-for-profit organization created to “promote integrity and business ethics in the marketplace.” As a result, he argued, it is “entitled to a conditional privilege in reporting to consumers that [it has] received customer complaints about a certain company.” But Mack argued that since PBP is legally a private figure, its defamation suit against the Better Business Bureau should be decided on a pure negligence standard. Jelin sided with Weller and found that the Better Business Bureau is entitled to a conditional privilege. As a result, he instructed the jury that it should apply an actual-malice standard and find in favor of the plaintiff only if the publication was done in reckless disregard for the truth. In an interview, Mack said he intends to file an appeal from the trial that will focus on the actual-malice ruling as well as numerous evidentiary issues. Weller was assisted at trial by Morgan Lewis attorney Jennifer B. Jordan. Mack was assisted at trial by Duane Morris attorney James H. Steigerwald.

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