Antitrust Law Daily Wrap Up, ANTITRUST—2d Cir.: Dismissal of competitor’s monopolization, misrepresentation claims against McGraw-Hill upheld, (Jan 7, 2016)

By Michael Menzhuber, J.D., LL.M.

The U.S. Court of Appeals in New York City upheld a federal district court’s ruling that allegedly false or misleading statements made by McGraw-Hill, that compared its construction project data with that of a competitor, did not violate either the Lanham Act or the Sherman Act. In reaching its decision, the appellate court determined that no reasonable jury could conclude that any allegedly false or misleading statements were material to customers’ purchasing decisions and the statements were insufficiently material to support the competitor’s monopolization claims (Reed Construction Data Inc. v. McGraw-Hill Companies, Inc., January 7, 2016, per curiam).

Reed Construction Data Inc. appealed a decision by a federal district court in New York City that granted summary judgment in favor of McGraw-Hill Companies, Inc., disposing of claims that McGraw-Hill’s advertising campaign made allegedly false or misleading comparisons between the quantity of construction project data offered by the two companies, in violation of §43 of the Lanham Act, the Sherman Act, and state law.

Lanham Act. The district court found that, while certain of McGraw-Hill’s comments were arguably literally false and others were arguable misleading, none of the statements were material. The appellate court agreed. The discovery in the case revealed that: (1) only one customer arguable relied on McGraw-Hill’s advertising in deciding between it and Reed; and (2) numerous customers testified that they discounted the companies’ representations as to their own products and they conducted their own independent investigations. Based on this evidence, the appellate court determined that no reasonable jury could conclude that any allegedly false or misleading statements by McGraw-Hill were material to customers’ purchasing decision.

Sherman Act. The appellate court next determined that in order to assert a monopolization claim based on misleading advertising, Reed was required to overcome the presumption that the effect on competition of such a practice was de minimis. However, because McGraw-Hill’s statements were insufficiently material to influence customer decisions, they could not support Reed’s monopolization claims.

The case is No. 14-4022-cv.

Attorneys: William N. Withrow, Jr. (Troutman Sanders LLP) for Reed Construction Data Inc.; Saul B Shapiro (Patterson Belkap Webb & Tyler LLP) for McGraw-Hill Companies, Inc.

Companies: Reed Construction Data Inc.; McGraw-Hill Companies, Inc.

Cases: Antitrust NewYorkNews