Antitrust Law Daily Wrap Up, ANTITRUST—3d Cir.: Automated maritime telecomm system conspiracy claims properly tossed, (Apr 15, 2016)

By Greg Hammond, J.D.

The federal district court did not err in dismissing claims that holders of various automated maritime telecommunications system (AMTS) licenses conspired, in restraint of trade, in the AMTS market. The U.S. Court of Appeals in Philadelphia affirmed dismissal of the Sherman Act conspiracy claim, agreeing that the competitor plaintiff failed to show that a conspiracy existed (Havens v. Mobex Network Services, LLC, April 14, 2016, Roth, J.).

Warren Havens and five entities under his control filed suit against Mobex Network Services, LLC, Mobex Communications, Inc., Maritime Communication/Land Mobile, LLC, Paging Systems, Inc., and Touch Tel Corp. for allegedly violating the Federal Communications Act and the Sherman Act. In particular, the plaintiffs claimed that the defendants conspired among themselves and with non-named parties, in unreasonable restraint of trade or commerce in the AMTS market, by coordinating the purchase of licenses, agreeing to “warehouse” licenses by failing to construct site-based stations, by refusing to disclose the operating stations’ contours, and through false representations to the industry and the Federal Communications Commission.

The district court dismissed the antitrust claim, finding that the plaintiffs failed to show, by a preponderance of the evidence, that a conspiracy existed.

On appeal, the plaintiffs challenged the lower court’s conclusion that no agreement existed. However, the district court examined all of the evidence and provided more than ample support for its conclusion that no concerted action existed, the appellate court decided. The plaintiffs claimed that Touch Tel’s president reached an agreement with a businessman more than 25 years ago, whereby they allegedly agreed to split up the market for geographic licenses. This evidence, however, did not amount to direct evidence of market allocation, the lower court concluded. In addition, evidence that the agreement continued was deemed merely speculative because it only showed an opportunity for, not the existence of, an unlawful agreement. Finally, the lower court determined that the alleged plus factors in this action—that defendants refused to provide contour information, did not construct or operate their stations, and took actions not in their individual economic interests—did not amount to evidence that a meeting of the minds existed. The appellate court concluded that there was no clear error in the district court’s findings and consequently affirmed.

The case is No. 14-4043.

Attorneys: Michael Grohs, (Saiber LLC) for Warren Havens. Debra M. Albanese (Traflet & Fabian) for Mobex Communications Inc. and Mobex Network Services LLC.

Companies: Mobex Communications Inc.; Mobex Network Services LLC

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