Philadelphia-based personal injury firm Lundy Law and its principal, L. Leonard Lundy, have filed a motion to dismiss rival firm Larry Pitt & Associates’ amended complaint, which alleged that Lundy has monopolized the market for exterior bus advertisements in the Philadelphia region.
The defendants said in their September 12 motion to dismiss the amended complaint that Pitt has failed to allege an antitrust injury.
“Notwithstanding the rhetoric, hyperbole, and personal attacks, Pitt has once again failed … to state a plausible claim for relief, and the amended complaint should be dismissed with prejudice,” the defendants said in the motion.
Pitt’s amended complaint was filed in August in the U.S. District Court for the Eastern District of Pennsylvania in response to the first motion to dismiss the defendants filed in June.
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 Southeastern Pennsylvania Transportation Authority 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.”
The August amended complaint 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 alleged.
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 allegedly told by Lundy’s daughter that he could not purchase exterior bus advertisements because of her father’s exclusive agreement with Titan and SEPTA.
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 defendants did not directly address the Pitt firm’s allegations regarding Lundy’s daughter in its September 12 motion to dismiss, except to say that “while Pitt has dressed up its allegations with inconsequential personal attacks, Pitt has failed to fix the fundamental problems Lundy previously identified.”
“As before, Pitt summarily accuses Lundy of outbidding Pitt for certain exclusive advertising opportunities in the Philadelphia area,” the defendants said. “The antitrust laws, however, are designed to protect the competitive process, not particular competitors.”
The defendants argued that the Pitt firm “does not and cannot allege that Lundy has tied up all (or even a substantial portion) of the countless advertising opportunities that exist in the proposed market.”
“There is simply no harm to competition when firms like Pitt retain hundreds or thousands of ways to reach their potential clients,” the defendants said.
The defendants said the Pitt firm’s assertion that it has seen a decrease in net income, annual fees and SEPTA-based referrals also fails because there are a number of potential reasons, aside from advertising, why a firm’s financial performance might change from year to year.
“Furthermore, at most, Pitt’s assertions about its declining financial performance allege harm to Pitt — a particular competitor — not harm to the competitive process,” the defendants said. “Indeed, Pitt appears to be using this lawsuit in an effort to avoid competition. Pitt wants to enjoin Lundy from entering into advertising contracts providing limited exclusive rights because Pitt itself does not want to pay for such rights.”
The defendants also argued that the Pitt firm failed to show how Lundy had monopolized a relevant market.
“Although Pitt summarily accuses Lundy of ‘dominating’ the proposed markets, Pitt alleges no facts — e.g., Lundy’s market share or the existence of barriers to entry — to support the accusation, and that omission is fatal,” the defendants said, pointing to the 2009 District of Delaware case Sun Microsystems v. Versata Enters, in which antitrust counterclaims were dismissed for failing “‘even approximately [to] establish what [the plaintiff's] market share was or could be.’”
In addition, the defendants said the Pitt firm has failed to show that the “‘Greater Philadelphia region’” is the relevant market Lundy Law allegedly monopolized.
Even if it were, the defendants argued, “there are presumably hundreds (if not thousands) of public transportation, radio, and sporting event and concert venue advertising opportunities in the ‘Greater Philadelphia region.’”
“Pitt never explains how Lundy could possibly ‘dominate’ a market of this size through the four discrete opportunities identified in the amended complaint,” the defendants said.
The Pitt firm’s original complaint had 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 anticompetitive purposes.”
The complaint alleged Lundy Law 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.”
But the defendants argued that Pitt did not allege a misuse of court process, but rather ill motive in Lundy Law’s trademark suit.
“As this court has recognized, such allegations are insufficient to state a claim for abuse of process,” the defendants said.
Counsel for the defendants, Robert C. Heim of Dechert in Philadelphia, declined to comment beyond what was in the motion to dismiss.
Counsel for the Pitt firm, Carl W. Hittinger of DLA Piper in Philadelphia, said he and his client would be filing a response to the motion to dismiss October 18.
“We will set forth our position in that brief for the court,” Hittinger said.