Court: Court of Appeals for the Second Circuit; April 25, 2019; Federal Appellate Court
Plaintiff-Appellant LLM Bar Exam, LLC (LBE) appeals a judgment from the U.S. District Court for the Southern District of New York, which dismissed its claims against Defendant-Appellee Barbri, Inc. and several law schools. LBE offered bar exam review courses for foreign attorneys with LL.M. degrees from U.S. law schools between 2009 and 2016, while Barbri, a direct competitor, provided courses to both LL.M. and J.D. graduates. LBE alleges that Barbri conspired with the law schools to restrict competition by donating to schools, bribing administrators, and hiring faculty, which allowed Barbri to promote its products on campus and maintain high prices for bar review courses. LBE claims this conspiracy led to Barbri monopolizing the bar review market with over 80% market share, effectively driving LBE out of business.
LBE differentiates between two markets: the J.D. Market and the L.L.M. Market, asserting that the latter is more restricted due to the limited number of foreign LL.M. graduates. Despite LBE's claim that Barbri monopolized the L.L.M. Market, evidence shows that other companies, like Kaplan and Pieper, also provide courses for LL.M. graduates. LBE faced multiple campus bans from law schools between 2010 and 2016, allegedly due to Barbri's interference and negative feedback from students regarding LBE's course quality and business practices. In 2016, LBE filed a lawsuit against Barbri and the law schools, alleging conspiracy to restrain trade and monopolization under the Sherman Act and racketeering under RICO. The District Court issued a comprehensive 76-page opinion analyzing LBE's claims and factual assertions.
The District Court dismissed LBE's claims against Barbri and several law schools, concluding that the First Amended Complaint (FAC) lacked sufficient factual support for its allegations of a conspiracy to monopolize the LL.M. market. LBE's appeal challenges the dismissal of its claims under the Sherman Act and RICO, asserting that the FAC adequately alleges agreements to restrain trade, Barbri's monopoly power, anticompetitive conduct, and a pattern of racketeering activity aimed at unlawfully acquiring LBE's customers. The appellate court reviewed the dismissal under a de novo standard, affirming that the FAC failed to present a plausible claim for relief as required by legal standards. The court adopted the District Court's reasoning in its entirety and found LBE's additional arguments unmeritorious, ultimately affirming the dismissal. The defendant law schools are categorized into those located in New York and those outside it, with LBE voluntarily dismissing its appeal regarding the non-New York schools. Additionally, the FAC does not specify whether the alleged agreements between Barbri and the law schools were written or oral, nor does it clarify the timing of these agreements.
