Antitrust Law Daily Wrap Up, FRANCHISING & DISTRIBUTION—S.D. Tex.: Tortious interference, trademark infringement, other claims survive dismissal in dispute between business-to-business matchmakers, (Mar 27, 2026)

By Justin Marcus Smith, J.D.

In contrast, the NIA antitrust counterclaims against BNI largely failed, especially as to a relevant geographic market and market-wide harm, but the court granted NIA one more chance to amend its counterclaims.

In a dispute between business-to-business matchmaking services, BNI Franchising, LLC and BNI Global, LLC (collectively, BNI) could proceed to discovery with most of their claims against Network in Action INTL, LLC (NIA), held the federal district court in Houston, Texas. The third amended complaint (TAC) claims of tortious interference, trademark infringement, breach of contract, misappropriation, and unfair competition survived a renewed NIA motion to dismiss. However, the court agreed with NIA that BNI alleged a computer trespass claim that was far too broad to survive dismissal because it only addressed browsing of a public website. Turning to the NIA counterclaims, the court dismissed the NIA monopolization and attempted monopolization counterclaims for (1) failure to plead a relevant geographic market; (2) pleading inconsistencies that tended to contradict market power; (3) pleading of contracts that were not unlawful per se; and (4) failure to plead harm to the market. In addition, the court found the NIA sham litigation claim was premature. The court also dismissed the NIA unfair competition counterclaim and request for a declaratory judgment to the extent they were not independent causes of action (BNI Franchising, LLC v. Network for Action INTL., LLC, No. 4:24-cv-03126 (S.D. Tex. Mar. 24, 2026)).

Background. In a dispute between competing “business networking companies,” which operate like the business equivalent of a dating service, the BNI TAC centered heavily on BNI’s assertion that NIA “scraped” members records off BNI websites in violation of BNI terms of service (ToS) and used the records to improperly solicit BNI members. The BNI TAC asserted eight causes of action: (1) interference with contract; (2) violation of the Defend Trade Secrets Act (DTSA); (3) violation of the Texas Uniform Trade Secrets Act (TUTSA); (4) federal trademark infringement; (5) breach of contract under North Carolina law; (6) computer trespass under North Carolina law; (7) common law misappropriation; (8) unfair competition under Texas law. BNI sought damages and permanent injunctive relief.

The parties stipulated to dismissal with prejudice of the DTSA and TUTSA claims, NIA moved to dismiss the remaining claims, and NIA counterclaims accused BNI of engaging in anti-competitive behavior. NIA’s amended counterclaims alleged (1) monopolization under the Sherman Act § 2; (2) attempted monopolization under the Sherman Act § 2; (3) monopolization and attempted monopolization under the Texas Antitrust Act; and (4) unfair competition. NIA sought a declaratory judgment, injunctive relief, and damages. BNI moved to dismiss the amended NIA counterclaims.

Tortious interference. The court denied the NIA motion to dismiss the BNI claims for tortious interference. The BNI TAC specifically alleged NIA knew about member agreements, franchise agreements, and employee agreements, and intentionally tried to undermine them. The TAC also alleged the NIA website provided strategies for avoiding exclusivity provisions in BNI member contracts.

The court found BNI sufficiently pleaded that NIA conduct caused BNI to suffer damages inasmuch as NIA allegedly solicited BNI members, franchisees, and employees to breach specific provisions of their agreements with BNI. BNI said that force it to make large expenditures.

Trademark infringement. The court declined to dismiss the BNI trademark infringement claim. NIA did not contest trademark ownership, but it argued BNI merely pleaded a “bare-bones” allegation that fell short of pleading standards. NIA also asserted it used the “GIVERS GAIN” mark only to distinguish its offerings from BNI and that it properly attributed the mark to BNI.

The court found BNI asserted more than NIA acknowledged. BNI alleged illegal benefit inasmuch as it did not consent to the NIA use of its mark, which purportedly caused confusion by leading the public to believe BNI condoned NIA’s services. Consumer confusion was not implausible. The court said the allegations were sufficient to survive dismissal.

Contract breach. Turning to the alleged scraping of BNI websites, the court denied dismissal of the BNI breach of contract claim. NIA argued there was no contract to breach because the BNI website ToS were unenforceable “browse-wrap” terms, as distinguishable from “click-wrap” terms, that lacked mutual assent and consideration. BNI alleged constructive and actual knowledge of the ToS, and NIA did not dispute actual notice. BNI alleged more than the mere existence of a link at the bottom of its website. It asserted many NIA franchisees’ websites had “identical” terms of service, similarly placed. Other courts found similar assertions were sufficient to survive dismissal.

Alleged tailoring of the NIA web scraping tool would have required knowledge of BNI websites, thus satisfying the pleading requirement for knowledge at this early stage.

BNI damage allegations were also sufficient because North Carolina law does not appear to require a plaintiff to plead actual damages. They were under Texas law, too.

Computer trespass. The court granted NIA’s motion to dismiss the BNI computer trespass claim under North Carolina law. There was very little North Carolina law on-point, but BNI pointed to no case law to support a broad application that would turn garden-variety ToS violation claims, based on access to a publicly available website, into a computer trespass. Amendment was futile. The court dismissed this claim with prejudice.

Misappropriation. The BNI common law misappropriation claim could proceed. NIA argued the dismissal-by-consent of the TUTSA claim, which necessarily implicated trade secrets, preempted the common law misappropriation claim and made it duplicative, but the court found BNI could recover without proving trade secret protection.

Unfair competition. The unfair competition claim could proceed. NIA argued the unfair competition claim did not involve an independent tort and that BNI failed to plead an independent wrongful act to survive dismissal, but the court disagreed. BNI sufficiently pleaded several underlying torts and wrongful acts, including tortious interference with business relationships.

Monopolization counterclaim. The court granted BNI’s motion to dismiss the NIA monopolization counterclaim for failure to allege a geographic relevant market, market wide harm, and other deficiencies.

BNI argued for dismissal of the NIA monopolization claim on various grounds, including: failure to allege the size of the relevant market, market shares, substitute services, cross-elasticity of demand; market power; monopoly power used to exclude, inasmuch as non-compete agreements alone are legally insufficient; and failure to allege antitrust injury to competition as a whole.

NIA counterclaims adequately alleged the relevant product market and substitute services. BNI did not explain why NIA’s proposed market was flawed or impossible, as opposed to cursorily alleged. NIA alleged that a few companies offer high-quality referrals for businesses, and that BNI is the dominant player in that market. The NIA allegations were reasonable on their face.

However, NIA claims did not adequately allege a relevant geographic market. The parties disputed whether the geographic market was national or local. Courts have found nationwide markets where alleged anticompetitive conduct is part of a nationwide business strategy with nationwide anticompetitive effects. The NIA counterclaim allegations left the relevant geographic market ambiguous. BNI has chapters around the country, but some NIA allegations suggested more localization. The NIA counterclaims were silent about who uses referral services and whether their needs make the market for BNI and NIA services local or national. The court gave NIA leave to amend the monopolization counterclaim because amendment satisfying the geographic relevant market pleading requirement appeared possible.

NIA’s counterclaim included allegations that established the relevant elements of monopoly power. NIA alleged BNI erected barriers to entry through a series of exclusive-dealing arrangements with customers and non-compete agreements with employees. However, the court ruled NIA would have to amend anyway because it introduced certain inconsistencies, e.g., a high BNI member non-renewal rate, which belied lock-in, and a claim on NIA’s website, incorporated by reference in the counterclaim, that BNI only has one percent market share.

As for exclusionary conduct causing harm, NIA allegations of BNI subscription restrictions on members and the noncompetition agreements described arrangements that are not unlawful per se. NIA did not establish facial market foreclosure. No allegations in the NIA counterclaims addressed whether, even if NIA could not compete for BNI customers, it could not compete by attracting new customers. The court gave NIA leave to amend its counterclaims one last time to overcome dismissal.

NIA also did not adequately plead a counterclaim for alleged sham litigation. NIA alleged this lawsuit and prelitigation events leading up to it were a “sham,” but NIA did not allege that BNI is targeting other competitors or otherwise harassing NIA over a period of years. NIA’s sole focus here was on the instant pending litigation. NIA did not identify with particularity which BNI claims lacked probable cause.

NIA also failed to allege a sufficient antitrust injury. It did not allege consumers suffered higher prices, reduced output, or lower quality services due to BNI’s allegedly monopolistic conduct. BNI churn-rate allegations were of ambiguous import.

For all of the above reasons, the court dismissed the NIA monopolization counterclaim with leave to amend inclusive of the allegations of exclusive dealing and sham litigation.

Attempted monopolization counterclaim. The flaws in NIA’s monopolization claim also applied to the respective attempted monopolization claims under the Sherman Act and under the Texas Antitrust Act. The court dismissed these two attempted monopolization claims without prejudice and with explicit leave to amend.

Unfair competition counterclaim. Unfair competition is not a stand-alone claim under Texas law. The court accordingly dismissed NIA’s unfair competition claim without prejudice.

Declaratory judgment claim. The court likewise dismissed NIA’s declaratory judgment claim seeking a declaration that the BNI restrictive covenants and non-competes were anticompetitive in nature. NIA did not offer an independent ground for jurisdiction or relief. The court stated the dismissal here was with prejudice to the extent such relief was inappropriate under NIA’s other, adequately alleged, substantive causes of action.

The Case is No. 4:24-cv-03126.

Judge: Rosenthal, L.

Attorneys: Catherine Seibel (Ballard Spahr LLP) for BNI Franchising, LLC. David Michael Noll (Hagan Noll & Boyle, LLC) for Network For Action Intl., LLC.

Companies: BNI Franchising, LLC; Network For Action Intl., LLC

Cases: Antitrust FranchisingDistribution TexasNews