922 F.3d 136
2d Cir.2019Background
- LLM Bar Exam, LLC (LBE) operated bar-review courses for foreign LL.M. graduates (2009–2016) and sued Barbri, Inc. (bar-prep competitor) and several law schools alleging a conspiracy to exclude LBE from campus markets.
- LBE alleged agreements in which Barbri gave money/hired faculty and schools provided campus access and promotion rights, purportedly to restrain competition and maintain supracompetitive prices.
- LBE asserted separate JD and LL.M. bar-review markets, claimed Barbri monopolized the LL.M. market (alleging ~80% market share) and that LBE was forced out of business.
- Schools allegedly banned or limited LBE’s on-campus activities at times between 2010–2016; exhibits also showed complaints about LBE’s quality, refunds, marketing, and contract practices.
- LBE brought Sherman Act (Sections 1 and 2) and RICO claims; the district court dismissed under Rule 12(b)(6) for failure to plead plausible conspiracy, monopoly power, or a RICO pattern, and the Second Circuit affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether defendants entered an agreement to restrain trade under §1 Sherman Act | FAC alleges quid pro quo agreements (donations/bribes/access) between Barbri and schools to exclude LBE | Actions were independent school decisions responding to student complaints; no plausible agreement alleged | Dismissed — FAC fails to plausibly allege a conspiracy or agreement to restrain trade |
| Whether Barbri has monopoly power in the LL.M. market under §2 Sherman Act | Alleged >80% share and that LBE was excluded, asserting monopoly control of LL.M. market | Market share unsupported; multiple competitors (Kaplan, Pieper) and problematic market-definition/pleading | Dismissed — FAC does not plausibly plead monopoly power in a properly defined market |
| Whether defendants engaged in anticompetitive conduct or exclusionary acts causing harm | Alleged coordinated bans, campus exclusion, and promotional advantages that forced LBE out of business | Defendants’ conduct explained by non-antitrust reasons (consumer complaints, quality/refund issues); causation not plausibly alleged | Dismissed — pleading inadequately shows anticompetitive conduct and proximate causation |
| Whether RICO claim pleads a pattern of racketeering and predicate acts | Alleged dishonest means and predicate acts to wrest customers from LBE as part of a common purpose | Allegations are conclusory and internally inconsistent; no plausible pattern of racketeering shown | Dismissed — RICO claim fails for lack of adequately pleaded pattern and predicate acts |
Key Cases Cited
- Brown Media Corp. v. K&L Gates, LLP, 854 F.3d 150 (2d Cir. 2017) (standard of review for Rule 12(b)(6) and accepting factual allegations for pleading-stage review)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (complaint must state a plausible claim; legal conclusions insufficient)
- LLM Bar Exam, LLC v. Barbri, Inc., 271 F. Supp. 3d 547 (S.D.N.Y. 2017) (district court opinion dismissing the FAC on Rule 12(b)(6) grounds; thorough factual and legal analysis)