Probably you mistyped tex string:
figure
hold on
line1H=plot(1:10,1:10);
line2H=plot(1:10,2*(1:10),'r');
leg{1} = 'BlackText {\color{blue}line1} BlackAgain';
leg{2} = 'BlackText {\color{red}line2} BlackAgain';
legend([line1H,line2H],leg{:})
Generates: