Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Bar associations allegedly limited competition by pursuing unauthorized practice of law actions, (Jul 10, 2015)

By Linda O’Brien, J.D., LL.M.

A state and local bar association have engaged in exclusionary and monopolistic conduct by taking action against perceived competitors for the unauthorized practice of law, according to a complaint filed by a legal document preparation website in the federal district court in New Orleans (Express Lien, Inc. v. Cleveland Metropolitan Bar Association, July 9, 2015).

The Cleveland Metropolitan Bar Association and Ohio State Bar Association are voluntary professional associations that are open to those admitted to the practice of law. The associations have committees comprised of association members who investigate allegations of persons engaged in the unauthorized practice of law. Express Lien, Inc., doing business as Zlien, operates a mechanics lien preparation and construction project payment software platform and distributes content through its website.

The complaint states that document automation is commonly used in the construction industry. The plaintiff’s software enables users to generate different construction documents through assembly features in which data provided by the user is merged with designated blanks on the document. Users of the plaintiff’s software can then direct the software to deliver certain documents to certain locations through email, postal mail, or a courier. For construction documents that need to signed, users can electronically sign the documents or appoint an agent for the limited purpose of signing the document.

According to the complaint, beginning in 2012, members of the Ohio State Bar Association and Cleveland Metropolitan Bar Association Unauthorized Practice of Law committees contacted Zlien and requested that the plaintiff refrain from offering mechanics lien preparation and filing services to contractors in the state of Ohio. These communications were attempts to intimidate Zlien into abandoning its legitimate commercial activities that competed with the defendants.

The complaint also alleges that, in 2015, the defendant committees lodged a complaint with the state board on the unauthorized practice of law and falsely claimed that Zlien refused to cooperate in identifying liens filed in Ohio. These misrepresentations allegedly were made with the intent of gaining an unfair advantage over the plaintiff. Rather than compete in the open market on price and service, the defendants have used their positions to threaten and intimidate Zlien into discontinuing its potential competition, the Express Lien claimed.

These threats and demands allegedly were taken without adequate state supervision and without conducting a reasonable investigation into the plaintiff’s business and product. The plaintiff has declined to stop and did not stop its commercial activity.

The plaintiff asserts claims for unfair competition and unfair trade practices in violation of the Sherman Act. The action seeks declaratory and injunctive relief, treble damages, costs of suit, attorney fees, and any other just and proper relief.

The case is No. 2:15-cv-02519.

Attorneys: Seth J. Smiley, Scott Wolfe, Jr. and Nathan L. Budde (Wolfe Law Group LLC) for Express Lien, Inc.

Companies: Express Lien, Inc.

News: Antitrust LouisianaNews