Antitrust Law Daily Wrap Up, ANTITRUST—D.N.J.: City escapes suit alleging anticompetitive bail bond recommendations, (Dec 11, 2014)

By Greg Hammond, J.D.

The City of Paterson, New Jersey has successfully eluded antitrust claims that one of its employees improperly recommended a bail bonds business to incoming prisoners at the City’s police department. In granting the City’s motion to dismiss, the federal district court in Newark determined that a competing bail bonds business failed to state a valid antitrust claim under the Sherman Act (Apple Bail Bonds, Inc. v. City of Paterson, December 10, 2014, Chesler, S.).

Apple Bail Bonds, Inc. filed suit against the City of Paterson, the Paterson Police Department, All Out Bail Bonds, and various city employees, alleging that a single municipal employee who books incoming prisoners at the Paterson Police Department, improperly recommended All Out Bail Bonds to those prisoners if they needed help making bail. Apple alleged, in part, state and federal antitrust violations, arguing that its business has suffered as a result of the employee’s recommendations for All Out. The defendants moved to dismiss, claiming that Apple failed to state an antitrust violation.

To state a valid antitrust claim under Section 1 of the Sherman Act, Apple was required to show: (1) concerted action by the defendants; (2) that produced anticompetitive effects within the relevant product and geographic markets; (3) that the concerted action was illegal; and (4) that Apple was injured as a proximate result of the concerted action.

The court determined that Apple failed to satisfy any of the four elements of an antitrust claim under the Sherman Act. Specifically, it determined that Apple failed to allege any facts regarding an agreement; the company made no attempt to frame a relevant market; and there were no facts demonstrating financial harm or any other antitrust injury. Instead, the court found that the “few facts” Apple did provide suggested that some consumers chose to contact Apple after All Out was recommended to them. Having dismissed each of Apple’s federal claims with prejudice, the New Jersey Antitrust Act claims were also dismissed, but without prejudice.

The case number is 14-cv-2733 (SRC).

Attorneys: Michael S. Kasanoff for Apple Bail Bonds, Inc. Alvaro Hasani (Florio Perrucci Steinhardt & Fader LLC) for the City of Paterson.

Companies: Apple Bail Bonds, Inc.

Cases: Antitrust NewJerseyNews