Philadelphia-based injury firm Larry Pitt & Associates has filed an amended complaint in federal court against Lundy Law and its principal, L. Leonard Lundy, alleging Lundy's daughter works for the advertising agency that sells exterior bus advertisements on behalf of the Southeastern Pennsylvania Transportation Authority and helps manage her father's exclusive contract with the companies.
The amended complaint was filed Monday in the U.S. District Court for the Eastern District of Pennsylvania in response to the motion to dismiss the defendants filed in June, in which they argued that Pitt had failed to state a claim.
Pitt's firm filed its original complaint May 2, two weeks after Lundy Law dropped its federal trademark suit against the Pitt firm.
Pitt alleged in the original complaint that Lundy Law has entered into contracts that give the firm exclusive rights to advertise on the exteriors of SEPTA and Berks Area Regional Transportation Authority buses.
According to the complaint, these contracts have foreclosed Pitt & Associates from renewing its own contracts for exterior bus advertisements, which are considered to be among "the most effective forms of advertising for legal services for small personal injury, Social Security disability and workers' compensation law firms to use in order to achieve name recognition."
"Specifically, when plaintiff Pitt Law attempted to renew its contract for the highly coveted advertisements on the exterior of SEPTA buses, it was informed that defendant Lundy's advertising contract with SEPTA prevented SEPTA from contracting with any other legal service providers for advertising anywhere on the exterior of buses, for at least one year, with unlimited one-year renewal options," the complaint alleged, adding that Pitt & Associates received the same response when it tried to renew its contract with BARTA.
The amended complaint Monday added that, in March 2011, Lundy's daughter began working as an account executive at Titan, the advertising company that has the exclusive rights to sell advertisements on behalf of SEPTA.
Before Lundy's daughter joined Titan, several local personal injury firms, including Pitt Law, advertised on the exteriors of SEPTA buses, according to the amended complaint.
"Less than a year after L. Leonard Lundy's daughter began working for Titan, an agreement was entered into among SEPTA, Titan and defendant Lundy, under which no legal service provider except defendant Lundy would be permitted to place any advertisements on the exteriors of buses," the amended complaint said.
Since then, according to the amended complaint, Pitt's firm and other Lundy Law competitors have been told either by Lundy's daughter or another Titan representative that they could not purchase advertisements on the exteriors of SEPTA buses.
The amended complaint said Rand Spear, the founder and principal of Spear Greenfield, had advertised on the exteriors of SEPTA buses from about 2006 until October 2011, but was told in early 2012 and again in early 2013 that he could no longer purchase such advertisements, even if he paid a higher rate than Lundy.
Similarly, according to the amended complaint, Leonard K. Hill, managing partner of Hill & Associates, was told by Lundy's daughter that he could not purchase exterior bus advertisements because of her father's exclusive agreement with Titan and SEPTA.
In addition, Lundy's daughter told Hill she did not believe it was a conflict of interest for her to handle advertising agreements with SEPTA for both her father and his competitors, the amended complaint alleged.
The original complaint also alleged Pitt & Associates was unable to secure a contract with Comcast SportsNet to advertise during sporting events because Lundy Law's contract precluded the company from entering into agreements with any other legal service provider for advertising during games for at least one year, with unlimited one-year renewal options.
According to the complaint, Pitt & Associates encountered similar roadblocks when it tried to secure contracts to advertise within the Wells Fargo Center and on KYW Newsradio during traffic and weather reports, traffic sponsorships and time checks.
The complaint alleged Leonard Lundy was personally involved in negotiating these contracts.
According to the complaint, Lundy Law has billed itself since May 2011 as "'the predominant advertiser of personal injury services.'"
"For at least the past year, defendant Lundy has engaged in a predatory campaign to eliminate competition from Pitt Law and other small personal injury, Social Security disability and workers' compensation law firms and to harm Pitt Law as a direct competitor," the complaint alleges, adding that Lundy "makes large, economically unjustified payments to media outlets that are above market prices to induce them to enter into these predatory exclusive contracts."
The defendants, in their motion to dismiss, had argued, however, that Pitt Law has "been harmed, if at all, not by the perversion of competition, but instead by its very result."
Therefore, the defendants said in their motion, Pitt failed to allege an antitrust injury.
"The only factual allegations in the complaint regarding injury pertain to Pitt's foreclosure from five specific advertising opportunities. But the exclusion of a competitor 'is the inevitable result of competition for exclusive contracts'; it does not constitute an antitrust injury," the defendants said in their motion, quoting language from the U.S. District Court for the Western District of Pennsylvania's 2009 ruling in Race Tires America v. Hoosier Racing Tire.
The complaint also cited as an example of additional "predatory conduct" the suit Lundy Law filed against Pitt & Associates in March, which had claimed Pitt & Associates' "Remember This Number" slogan was too close to Lundy Law's "Remember This Name" slogan.
According to court records, Lundy Law voluntarily dismissed that suit April 18.
In its complaint, Pitt & Associates alleges Lundy Law's suit had "no good-faith basis in law and fact" and was filed "for anti-competitive purposes."
"Defendant Lundy never presented a single shred of evidence in its case to support its allegation that including in its advertisements an instruction to 'Remember This Name' had caused the phrase itself to acquire secondary meaning rendering it protectable under applicable trademark law," the complaint said. "Nor did defendant Lundy present any evidence of actual confusion on the part of consumers, despite the fact that the two phrases had been used concurrently in advertising for nearly a year before defendant Lundy decided to file the trademark lawsuit."
The complaint alleged Lundy Law's and Lundy's actions have caused Pitt & Associates to be "severely damaged through lost sales and profits, higher cost and loss of good will and name recognition in the relevant markets."
The defendants, however, argued in their motion to dismiss that Pitt failed to plead any facts to support the claim that Lundy's trademark suit was baseless.
In addition to the original complaint's allegations of Sherman Antitrust Act violations for unlawful monopolization, attempted monopolization, unlawful boycott and unlawful exclusive dealing, as well as common-law claims for unfair competition and tortious interference with prospective contract, the amended complaint included allegations of Dragonetti Act violations.
The amended complaint said Lundy had filed suit against Pitt Law to force Pitt's firm to waste its own funds on defending a suit, to shut down its advertising, to intimidate it into changing its slogan and to publicly disparage it.
According to the complaint, Pitt & Associates is seeking an award of treble damages or, in the alternative, an order requiring Lundy Law to pay Pitt & Associates "all profits realized … as a result of the illegal acts" alleged in the complaint.
Pitt & Associates is also seeking punitive and exemplary damages as well as attorney fees and costs related both to its own suit and Lundy Law's previous trademark suit, according to the complaint.
Counsel for Pitt & Associates, Carl W. Hittinger of DLA Piper in Philadelphia, declined to comment on the case Monday except to say the amended complaint "speaks for itself."
Counsel for the defendants, Robert C. Heim of Dechert in Philadelphia, said he and his clients will likely move to dismiss the amended complaint.
"The personal accusations don't cure the legal deficiencies," Heim said.