A lawsuit alleging that Lundy Law L.L.P., a workers compensation firm based in Philadelphia, violated federal antitrust restrictions by locking up advertising on SEPTA buses and KYW drive-time radio has been dismissed by U.S. District Judge Cynthia Rufe.
Rufe said that the Lundy law firm, whose advertisements can be seen on SEPTA buses throughout the region, had not breached federal antitrust laws because competitor Larry Pitt & Associates likely had other advertising options.
At the same time, Rufe permitted the Pitt law firm to move forward with a claim that Lundy Law falsely stated in its advertisements that it handled social security disability claims, when in fact it referred those cases to other law firms.
Rufe also gave the Pitt law firm the option of refiling its lawsuit on the dismissed charges by Jan. 3, but made clear the firm would have to come up with new facts to support its claims.
Carl Hittinger, Pitt's lawyer, said the firm planned to file an amended complaint with additional evidence to back up its core allegations.
"Lundy Law clearly does not control all avenues for advertising in the Greater Philadelphia region," Rufe said in her 16-page opinion, released late Friday.
The Pitt law firm sued in May, alleging that Lundy Law, by signing an exclusive advertising contract with SEPTA, was seeking to driving competitors out of the market. Both firms concentrate on workers compensation and social security disability cases.
Pitt is itself a prodigious advertiser in the Philadelphia region and in its lawsuit, the firm maintained that the most effective advertising outlet for personal injury claims is the outside of public buses.
The firm says that the advertising medium is so effective that Lundy Law paid $435,000 to advertise exclusively on SEPTA buses during 2012, almost 10 times the rate that the Pitt firm paid when it advertised on SEPTA buses from 2008 to 2011.
The firm maintained in court documents that it had received hundreds of referrals during the time. But it said that the number of referrals dropped precipitously in 2012 and 2013, after Lundy Law took over the advertising spot.
Rufe found in Friday's opinion that the Pitt firm failed to show that Lundy law had engaged in predatory or anticompetive conduct aimed at monopolizing the market. In fact, Lundy Law was responding to competition in the marketplace, rather than trying to eliminate it, Rufe said.
"This is not an antitrust case," said Robert Heim, the lawyer for Lundy Law. "There are many outlets for advertising and exclusive contracts [of the kind between Lundy Law and SEPTA] are not illegal."
Rufe said it may well be true that exclusive Lundy Law advertising on SEPTA buses, public buses in the Reading area, at the Wells Fargo Center and on KYW radio had been highly effective. But she said that it did not necessarily follow that there were no other advertising outlets available.
Pitt, moreover, likely had the option of bidding for the same advertising space once Lundy Law's contracts expire.
"It is not clear from the complaint that Pitt has been or will be foreclosed from bidding for the very contracts from which Lundy Law now benefits," Rufe wrote.
Hittinger said that new facts have emerged that will bolster Pitt's case and they will be included in an amended complaint the firm plans to file by the Jan. 3 deadline.
"The amended complaint will be based on additional substantial facts that have been uncovered through further investigation as well as right-to-know requests made to . . . various mass transit agencies, including SEPT," he said.
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