Antitrust Law Daily Wrap Up, ANTITRUST—D. Md.: Claims against inmate collect call service providers go through, (Jun 12, 2025)

By Rebecca Mayo, J.D.

Callers alleged that providers engaged in a horizontal price-fixing scheme, whereby providers fixed inflated prices for inmate calling service sing-call services and misrepresented information about the costs of these services to certain local and state government officials, and to consumers.

In a putative class action matter alleging price-fixing and a kickback scheme to inflate the prices of single-call collect calls placed by inmates from correctional facilities, the federal district court in Greenbelt, Maryland dismissed some claims as time-barred, but allowed Sherman Act and RICO claims against service providers to move forward. According to the complaint, two providers of inmate calling services (ICS) committed a per se violation of the Sherman Act by conspiring to eliminate competition between themselves, fixing and charging inflated prices for their single-call products, and paying low site commission fees for their single-call products. The complaint further alleged that the provider violated RICO by making fraudulent misrepresentations and omissions to certain contracting governments, and to consumers, for the purposes of charging excessive rates and paying low site commission fees for their single-call products (Albert v. Global TelLink Corp., No. 8:20-cv-01936-LKG (D. Md. Jun. 11, 2025)).

Securus Technologies, LLC is a provider of ICS and has two “single-call” services, including “PayNow” and “Text2Connect” which both charge a flat fee to a customer’s credit card for calls with a set time limit. Securus contracted with 3CInteractive Corp. (3CI) to market, implement and operate these ICS services. 3CI collects payment information from customers, processes and bills payments, and establishes and manages the websites for PayNow and Text2Connect services. In return, 3CI receives a “transaction fee” for each single call made via these services. Global Tel*Link Corp. (GTL) also offers two single-call programs, including “Collect2Card” and “Collect2Phone.”

Individuals who paid to accept PayNow and Collect2Phone calls from incarcerated individuals, filed suit against the providers of the ICS, GTL and Securus, as well as the processor 3CI. The callers also brought suit against Platinum Equity Capital Partners IV, L.P. and Platinum Equity, LLC as alter egos of GTL and Abry Partners VII, L.P. and Abry Partners, LLC as alter egos of Securus, claiming that these alter egos had a majority interest in their respective ICS providers and were therefore involved in the conspiracy.

According to the callers, Securus purchased 3CI’s patent for the technology used to charge mobile phone accounts for single calls, and that as a condition of agreeing to purchase the patent, Securus insisted that any agreement between 3CI and GTL to market and operate ICS calls required that GTL’s single-call program charge the same prices as Securus charges for its single-call program. The callers alleged that the providers committed a per se violation of Section 1 of the Sherman Antitrust act, by “entering into a continuing agreement, understanding, and conspiracy in restraint of trade to prevent and eliminate price competition over single calls between Securus and GTL and to fix, inflate, maintain, and stabilize the price of 3CI-operated single calls charged to consumers in the United States. As a result of this scheme, the callers alleged that the providers: (1) restrained or eliminated competition in the ICS market; (2) fixed and maintained inflated prices for single-call services, and (3) deprived consumers of the benefit of true competition in the ICS market.

The callers further alleged that the providers violated RICO by making certain misrepresentations and/or omissions to the contracting governments, and to consumers regarding the amount of the transaction fees that Securus and GTL paid to 3CI. They also alleged that the provider violated RICO by making several misrepresentations and/or omissions to certain local and state government officials, and to consumers, about the magnitude of the transaction fees associated with ICS single calls operated by 3CI.

Statute of limitations. Sherman Act and RICO claims must be brought within four years after the cause of action accrued. However, the statute of limitations period can be tolled by the fraudulent concealment doctrine if a plaintiff can show: (1) the party pleading the statute of limitations fraudulently concealed facts that are the basis of the plaintiff’s claims, (2) the plaintiff failed to discover those facts within the statutory period, and (3) the plaintiff failed to discover the facts despite the exercise of due diligence.

Here the court found that the Sherman Act and RICO claims against the Abry and Platinum defendants were clearly untimely as the claims were first asserted more than four years after the claims accrued. The court further found that the callers did not sufficiently allege facts to show fraudulent concealment with particularity with regards to the Abry and Platinum defendants, finding that bare factual allegations, taken as true, are simply not sufficient to satisfy the heightened pleading requirements of Rule 9(b), or to toll the statute of limitations based upon the fraudulent concealment doctrine. Finally, the court noted that it was well-established that plaintiffs cannot satisfy Rule 9(b) by alleging fraudulent conduct by multiple defendants in the aggregate, and here, the callers cited no legal authority to support the argument that they may rely on Securus’ alleged fraudulent conduct to toll the statute of limitations with respect to their Sherman Act and RICO claims against the Abry and Platinum defendants. Therefore, the court held that the claims were time-barred and dismissed the claims.

The court did, however, agree that the factual allegations were sufficient to plausibly show acts of fraudulent concealment on the part of Securus that could toll the statute of limitations for any Sherman Act or RICO claims that accrued more than four years before the action was commenced. The callers alleged that they were unable to discover that Securus had fraudulently concealed the facts underlying the alleged conspiracy in this case, despite the exercise of due diligence. The callers also alleged numerous facts that, taken as true, showed that Securus concealed information about its transaction fees from consumers and concealed the nature of its relationship with GTL and 3CI. Thus, the court found that the callers adequately pled facts to show that the fraudulent concealment doctrine applied to their RICO claims against Securus and denied the motion to dismiss those claims as untimely.

Sherman claims against Securus. The Fourth Circuit has long recognized that “certain recurring business practices, because of their pernicious effect on competition, are considered illegal per se under the Sherman Act.” Additionally, the Supreme Court has held that “price-fixing agreements between two or more competitors, otherwise known as horizontal price-fixing agreements, fall into the category of arrangements that are per se unlawful.” To prove the existence of a horizontal price-fixing conspiracy, a plaintiff must show: (1) the existence of an agreement, combination, or conspiracy, (2) among actual competitors, (3) with the express purpose or effect of raising, depressing, fixing, pegging, or stabilizing the price of a commodity, (4) in interstate or foreign commerce.

Securus argued that the Fourth Circuit’s recent decision in United States v. Brewbaker warranted the dismissal of the claims. The court noted that in Brewbaker, the Fourth Circuit held that a criminal indictment did not contain facts to support a per se Sherman Act violation because the facts of the indictment showed a hybrid relationship between the defendants that had horizontal and vertical components to the alleged anti-competitive scheme. However, the court also pointed out that the Fourth Circuit recognized that the rule regarding per se violations of the Sherman Act applied to horizontal constraints “that include restraints between competitors and nominally vertically related entities that are, in reality, instrumentalities the competitors use to facilitate the restraint among them.” The court concluded that this was the relationship alleged by the callers who claimed that 3CI was simply an instrumentality of Securus and GTL, because the relationship involved a sham licensing arrangement that allowed Securus and GTL to charge the same inflated price, and to pay the same commissions, for single calls, and therefore the vertical component of the relationship between Securus and 3CI was nominal. Therefore, the court found that the callers plausibly alleged a per se Sherman Act violation claim against Securus and declined to dismiss the Sherman Act claims against Securus.

Rico claims against Securus. The Fourth Circuit previously held that the callers had Article III RICO standing because their “injuries aren’t derivative of those suffered by the governments” and they “allege a scheme in which Defendants directly injured both consumers and governments in tandem.” Further, the court found that the callers plausibly alleged facts to support a reasonable inference that the contracting government at issue would have contracted for a lower price for single calls, but for Securus’ alleged misrepresentations and omissions. Therefore, the callers had Article III standing to pursue their claims.

The court found that the callers stated the fraudulent conduct that they relied on to establish the predicate acts for their RICO claims with sufficient particularity. The court noted that they alleged that Securus committed mail fraud, by knowingly and intentionally mailing misrepresentations and/or omissions to the contracting governments and consumers about transaction fees paid to 3CI for operating PayNow, Text2Connect, Collect2Card and Collect2Phone calls, and committed wire fraud by knowingly and intentionally transmitting misrepresentations and/or omissions electronically to the contracting governments and to consumers. Therefore, the court held that the factual allegations stated with particularity the nature of the fraudulent conduct the callers relied upon to establish mail and wire fraud to support their RICO claims against Securus, as required by Rule 9(b).

According to the court, the callers also alleged facts to show that their injuries arose from Securus’s alleged conduct. The court noted that the callers alleged that their injuries were monetary in nature and arose from having to pay higher prices for PayNow and Text2Collect calls, due to certain misrepresentations and/or omissions made by Securus.

Finally, the court noted that the Fourth Circuit has recognized that a defendant can conspire to violate RICO, and thus, violate § 1962(d), without actually committing or agreeing to commit the two or more acts of racketeering activity itself. Therefore, the court found that Securus could be found liable to the callers who only purchased GTL products, if those callers could show that Securus agreed to enter into a conspiracy with GTL to violate RICO.

Therefore, the court denied the motion to dismiss the RICO claims brought against Securus.

Class allegations against Securus. Although Securus moved to strike the class allegations, the court noted that it had not yet considered the question of class certification because the callers had not yet filed a motion for class certification. Therefore, the court found the motion to strike the class allegations as premature and denied the motion.

The Case is No. 8:20-cv-01936-LKG.

Judge: Griggsby L.

Attorneys: Alice Buttrick (Justice Catalyst Law) for Ashley Albert. Jonathan Ian Gleklen (Arnold & Porter Kaye Scholer LLP) for Global TelLink Corp.

Companies: Global TelLink Corp.

Cases: Antitrust RICO MarylandNews