Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Pennsylvania Law Firm Files Antitrust Complaint Against Competitor over Exclusive Advertising Contracts, (May 3, 2013)

By Tobias J. Gillett, J.D., LL.M.

A Pennsylvania law firm has filed an antitrust complaint in the federal district court in Philadelphia, alleging that a competitor had monopolized and attempted to monopolize the market for the advertising of personal injury, social security disability, and workers’ compensation law services by small firms in the Greater Philadelphia area (Larry Pitt & Associates v. Lundy Law, LLP, May 2, 2013).

Larry Pitt & Associates’ action against its competitor Lundy Law, LLP, and its principal L. Leonard Lundy, asserts that Lundy Law has monopolized the market for the advertising of legal services by small personal injury, social security disability, and workers’ compensation law firms in the Pennsylvania counties of Berks, Bucks, Delaware, Chester, Montgomery, and Philadelphia.

According to Pitt’s complaint, Pitt and other small firms in the small personal injury, social security disability, and workers’ compensation areas have historically advertised their services on buses operated by the Southeastern Pennsylvania Transportation Authority (SEPTA) and the Berks Area Regional Transportation Authority (BARTA), on radio and television spots during and around sporting events, and on roadside billboards.

Pitts alleges that advertising on SEPTA buses "is essential for such law firms to effectively compete in the relevant market," while the sporting event radio and television advertisements "are the most influential and sought after advertising spots in this media outlet." Roadside billboards, on the other hand, "have limited effectiveness because they are only viewed by passing motorists at a particular location where billboards are permitted."

The lawsuit claims that Lundy has entered into exclusive contracts with providers of the premium forms of advertising, including with SEPTA and BARTA for bus advertising, with major sports and concert arenas, and with KYW Newsradio for advertising during the prime "rush hour" period. These contracts allegedly prevent Lundy’s competitors, including Pitt, from advertising with those providers, and last for periods of at least one year, with automatic and unlimited renewal provisions.

The complaint asserts that "[a]ccess to these media outlets and their premium advertising is an essential facility needed to effectively compete in the market for the advertising of legal services by such small personal injury, social security disability, and workers’ compensation law firms in the relevant geographic market." Lundy allegedly makes above market price payments to media outlets to induce them to enter into the exclusive contracts. The media outlets have allegedly colluded with Lundy to boycott Pitt from advertising its legal services.

In addition, Lundy has allegedly attempted to harm its competitors by threatening and filing baseless litigation against them. The complaint refers to a trademark infringement lawsuit filed by Lundy against Pitt over a slogan that Pitt asserted was unlikely to confuse consumers. Lundy also allegedly failed to support its infringement claims with any evidence that its slogan had acquired secondary meaning or that Pitt’s use of its slogan for over a year had caused any actual confusion. The defense of the lawsuit allegedly caused Pitt to incur significant costs before Lundy "without explanation or any advance notice" voluntarily dismissed its trademark lawsuit.

The complaint asserts claims for monopolization and attempted monopolization under Section 2 of the Sherman Act, unlawful boycott and exclusive dealing under Section 1 of the Sherman Act, and unfair competition and tortious interference with prospective contract under Pennsylvania common law. The complaint requests monetary damages, attorney fees and costs, punitive and exemplary damages, and injunctive relief.

The case is No. 2:13-cv-02398-CMR.

Attorneys: Carl W. Hittinger (DLA Piper LLP) for Larry Pitt & Associates.

Companies: Larry Pitt & Associates; Lundy Law, LLP

News: Antitrust