Four personal injury law firms and two other businesses have filed class actions alleging the nation’s largest broadcasters have conspired to fix prices on TV advertising.
The four law firms, along with an automobile dealership in Pennsylvania and a marketing consultant in Alabama, filed six separate lawsuits after The Wall Street Journal reported last month that the Justice Department was investigating whether sales teams at Tribune Media Co., Sinclair Broadcast Group Inc. and other independent TV station owners shared information with one another. Tribune and Sinclair had planned a $3.9 billion merger, but the Federal Communications Commission raised concerns about the deal. This month, Tribune filed a $1 billion suit against Sinclair over the botched merger.
The plaintiff law firms are Clay, Massey & Associates and the Ford Firm, both in Alabama; the Dozier Law Firm in Georgia; and the Law Offices of Peter Miller in Arkansas. The suits named Tribune, Sinclair, Hearst Corp. and three other broadcast companies.
“During the class period, defendants unlawfully shared information and coordinated efforts to artificially inflate prices for television commercials,” wrote Hollis Salzman at Robins Kaplan, in the suit brought by Clay, Massey & Associates. “Specifically, instead of competing with each other on prices for advertising sales, as competitors normally do, defendants and their co-conspirators shared proprietary information and conspired to fix prices and reduce competition in the market.”
Salzman, a New York partner, filed a July 31 motion before the U.S. Judicial Panel on Multidistrict Litigation to coordinate all the TV advertising cases in Illinois, where four are pending and where Tribune is based. The other defendants are Gray Television Inc., Nexstar Media Group Inc. and Gannett spinoff TEGNA Inc. In June, Gray agreed to merge with Raycom Media Inc. for $3.65 billion.
In filings this week, the Dozier Law Firm, based in Macon, Georgia, and the defendants, supported an MDL, but the Law Offices of Peter Miller, in Little Rock, Arkansas, pushed for Maryland, where two suits are pending and where Sinclair has its headquarters in Hunt Valley.
The panel has scheduled the cases for its Sept. 27 hearing in San Francisco.
The suits all claim that advertising sales teams for independent local TV station owners, faced with anticipated merger challenges and declines in TV ad purchases, coordinated with one another to inflate prices in violation of the Sherman Antitrust Act. As evidence of the conspiracy, the suits cite the DOJ investigation and the defendants’ participation in various trade associations.
The suits were brought on behalf of a nationwide class of ad buyers since 2014.
Salzman and R. Edward Massey, of Clay Massey & Associates in Mobile, Alabama, did not respond to a request for comment. Peter Miller referred calls to his attorneys at Kessler Topaz Meltzer & Check in Radnor, Pennsylvania, who didn’t respond. Ken Wexler, managing partner at Chicago’s Wexler Wallace, who represented the Dozier Law Firm, declined to comment.
Randal Ford, in Tuscaloosa, Alabama, referred a call to his lawyer, Megan Jones at Hausfeld, who wrote: “Businesses should compete for customers, not share competitively sensitive information to the disadvantage of their customers. Our complaint alleges that defendants shared such information, rather than go head to head and compete for customers. As a result, advertisers were harmed and our complaint seeks a remedy for that.”
A spokesman for Tribune, represented by Jay Cohen at New York’s Paul, Weiss, Rifkind, Wharton & Garrison, declined to comment. Other defense attorneys—Jerome Fortinsky at New York’s Shearman & Sterling for Sinclair, Eliot Adelson at Kirkland & Ellis in San Francisco for Nexstar, Evan Chesler at New York’s Cravath, Swaine & Moore for Hearst, Ross Bricker of Jenner & Block in Chicago for TEGNA, and Cooley’s Mazda Antia, a partner in San Diego, for Gray Television—did not respond to requests for comment.