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Local

Kane County company accuses 'What's Happening' on Facebook of taking paid ads without disclosing

HVAC firm seeks more than $250K in damages in lawsuit

The owner of a Kane County heating and cooling company is suing Kevin Ketchum and his Geneva-based Nexxus Publishing LLC, claiming that the company uses deceptive practices by charging for advertising and posts on its "What's Happening" pages on Facebook without disclosing that information. 

The suit, filed June 7 in Kane County by Patriot Heating and Cooling Services Inc. of Elburn and Geneva, is seeking in excess of $250,000 in compensatory and punitive damages and legal fees, the lawsuit stated. It also names a rival heating and air conditioning company and a subcontractor of that company, the latter of which Patriot contends posted disparaging comments about Patriot on the Fox Valley "What's Happening" pages.

The suit accuses the defendants of deceptive and unfair advertising in the operation of the "What's Happening" Facebook pages. The lawsuit alleges that the "What's Happening" pages are run for profit without disclosing to the public that the company charges local businesses to post and advertise; referrals are also often paid. The lawsuit also alleges that Ketchum allowed a defamatory and disparaging post about Patriot to exist on the pages for no other purpose than to promote Ketchum's paid customer, McNally’s Heating and Cooling Inc. in St. Charles.

"The 'What's Happening' pages convey a message to consumers that the pages are an avenue to find unpaid referrals for any local business that a page participant from the local community would choose to refer," the suit claims. " ... In reality, Ketchum and Nexxus operate the 'What's Happening' pages for profit by charging local businesses to post and otherwise advertise on the pages. In exchange for the payments, Ketchum and Nexxus ensure that the local business will become the exclusive service provider for their category on the pages ... ."

The company also alleged in the lawsuit that Ketchum and Nexxus manipulate the content of the “What’s Happening” pages to promote their paid advertisers, while deleting postings by followers that endorse competing companies that do not advertise.

The “What’s Happening” pages serve various Fox Valley communities, and postings there often seek referrals for home services and related matters.

Ketchum and Nexxus referred all questions to retired Kane County judge Michael Colwell of the Geneva law firm of Meyers and Flowers.

"Ketchum and Nexxus LLC categorically deny these allegations and believe this case will be dismissed,” Colwell said. “It’s frankly just a bunch of baloney. We are confident that the matter will be dismissed, ultimately.”

Nexxus also publishes Fox Valley Magazine, the lawsuit stated.

The suit alleges that in late 2015, Ketchum and Nexxus Publishing sold advertising to McNally’s for the “What’s Happening” pages, making the company the exclusively endorsed heating, ventilation and air conditioning company on the Fox Valley communities’ sites.

McNally’s is also named in the lawsuit, though owner Brian McNally said June 8 that he had not yet been served with any paperwork.

McNally said his company did nothing wrong and should not be included in Patriot’s suit.

“We were not paying them for advertising,” McNally said of Ketchum and Nexxus. “We were paying for print publication. I don’t pay them to publish on ‘What’s Happening.’ [The plaintiff] had no business naming my company.”

McNally said he spoke to Patriot’s attorney, Joshua Feagans of the Griffin Williams law firm in Geneva, to ask him to remove his company’s name from the lawsuit.

“We are not removing him from the suit,” Feagans said. “The allegations speak for themselves. My client stands by the allegations in the complaint.”

In January 2016, Patriot noticed referrals on the “What’s Happening” pages were being removed by Ketchum, the lawsuit stated.

When the company contacted Ketchum, he said Patriot could not advertise in competition with McNally’s, but “if Patriot wanted to pay Nexxus more than [McNally’s] paid Nexxus, Ketchum would make Patriot the exclusive HVAC service provider advertiser on the ‘What’s Happening’ pages,” the lawsuit stated.

"Patriot refused to pay Ketchum and Nexxus such money to advertise on the 'What's Happening' pages believing that deceiving customers as to the true nature of the page was unethical and illegal," the suit claims.

After Patriot owner William White refused to pay to advertise, Ketchum retaliated and “blocked Patriot and its owner from all of the ‘What’s Happening’ pages,” the lawsuit stated.

Blocking Patriot from participating in the “What’s Happening” pages, coupled with Ketchum deleting many – if not all – referrals to Patriot, cost the company business, the lawsuit stated.

Another HVAC rival, Alan Herra of Jackson Alan Services of Elburn, also is named as a defendant in the suit.

Herra created a “What’s Happening” post on June 1 that claimed or conveyed that Patriot ran an illegal business; that it did not have licenses or bonding to run its business; failed to pay taxes; and allowed its home office to exist in a state of squalor, according to the lawsuit.

Herra said June 8 he had not yet been served with the lawsuit, but knows about it.

Herra would not comment except to say, "This is hilarious."

The negative post about Patriot was pinned to the top of each “What’s Happening” page by Ketchum, making it the first thing every visitor to the page would see, the lawsuit stated.

The “What’s Happening” pages generally do not allow disparaging remarks about a business or negative customer experiences, the lawsuit stated.

“Ketchum’s intentional and calculated placement of Herra’s post was clearly intended and had no other purpose than to damage the reputation of Patriot for the benefit of Ketchum’s paid advertising customer,” which is McNally’s, the lawsuit stated.

After Patriot’s attorney Feagans sent a cease and desist letter to Ketchum on June 2, Herra’s pinned post about Patriot remained on the St. Charles "What's Happening" site until June 6, the lawsuit stated.

But the pinning of Herra’s post cost Patriot substantial residential and commercial work, the lawsuit stated.

The lawsuit also alleges that Ketchum and Nexxus violated Federal Trade Commission regulations against unfair or deceptive business practices. The FTC requires that paid advertising or endorsements – including those on social media – be disclosed to consumers, the lawsuit stated.

"Defendants' false and misleading advertising has caused and is likely to cause in the future a public injury and detrimental effect on consumers ... ," the suit contends.

The case is scheduled to go to court Sept. 21.

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