A Texas appeals court has thrown out a lawsuit brought by BCG Attorney Search Inc. against rival recruiter Robert Kinney and upheld $75,000 in sanctions against BCG.
The Texas Court of Appeals in Austin on Wednesday reversed a lower court and found that a bitter dispute between the two attorney search firms already had been decided in California.
The ruling stemmed from a 2008 lawsuit filed in California by BCG, its chief executive officer Harrison Barnes and some of his other companies, over comments that Robert Kinney, president of Kinney Recruiting LLC, allegedly made on the website RipoffReport.com.
The lawsuit alleged that after Kinney quit BCG and formed his own company, he used a pseudonym to post comments on the website, including that Barnes’ companies were built on “a web of lies” and that Barnes was not to be trusted.
Barnes’ lawsuit originally named John Doe defendants, until, 14 months later, he said he’d identified Kinney as the author of the statements. After Kinney filed a motion to dismiss based on California’s Anti-SLAPP law, a California trial court tossed the case and awarded Kinney $45,000 in attorney’s fees. Anti-SLAPP laws prevent plaintiffs from filing lawsuits against defendants who are legally exercising their rights.
In May 2012, Barnes and BCG filed a lawsuit in Texas, asserting violations of federal trademark law, breach of contract and breach of fiduciary duty for the online post. The lawsuit claimed $1 million in damages.
A Texas trial court in July 2012 dismissed the trademark claims and fined BCG $75,000, finding that Barnes’ had brought them to harass Kinney. The court let survive the breach claims.
In Wednesday’s decision, the Texas appeals court found that the California court had essentially ruled on the merits of BCG’s claims, which barred Barnes and his company from relitigating them in Texas. It also ruled that the trial court’s sanction of $75,000 against BCG was reasonable.
“We conclude that the sanction has a direct relationship to BCG's sanctionable conduct and that the trial court did not abuse its discretion in determining that a lesser sanction would have been insufficient to deter further actions by BCG,” the court wrote.
The action brought by BCG is not the only litigation between the two parties. In 2010, Kinney sued BCG for statements Barnes’ allegedly made about Kinney on various websites. Kinney’s lawsuit sought an injunction without monetary damages—relief that a Texas appeals court found could not be granted under state law.
Regarding Wednesday’s decision, Barnes said that he would appeal. “We’re going to the Texas Supreme Court,” he said. “The only way to respond to [Kinney’s statements] is through these lawsuits. We want him to stop.”
Kinney said the decision was “right.” He added, “It’s too bad it had to go this far.”
Contact Leigh Jones at email@example.com.