LINVEL JAMES RISNER v. LAW SCHOOL ADMISSION COUNCIL, INC.
CIVIL ACTION NO. 25-4461
IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA
April 28, 2026
MURPHY, J.
MURPHY, J. April 28, 2026
Motions to dismiss in antitrust cases like this one can be thorny. On the one hand, the pleading standards are the same as any other case. But on the other, the layered analysis of antitrust law can make it difficult to cut a path to discovery. One thing is for certain: the plaintiff must state the claim in the complaint, not in the briefing in opposition to the motion to dismiss. This case is about the Law School Admissions Council, which is a central clearinghouse for law-school applicants. Mr. Risner sued the LSAC on behalf of a nationwide class, alleging that it fixed application-services prices and maintained a monopoly in violation of the Sherman Act. Mr. Risner has standing, and his allegations make sense in broad strokes. But they are also unclear and self-contradictory. To rebut the LSAC‘s detailed arguments urging dismissal, Mr. Risner advances unwarranted assumptions, self-serving interpretations, and purported new factual allegations. Focusing on the complaint, as we must, each of Mr. Risner‘s claims falls short: the purported economic markets are implausible, the alleged antitrust harms are nearsighted, and there are insufficient allegations of the LSAC‘s monopoly power. As such, we grant the LSAC‘s motion to dismiss, but without prejudice and with leave to amend.
I. Factual Allegations
Created by law school deans “to make education accessible and equitable,” the LSAC serves to “construct, administer, and report” test scores for admission to law school, “conduct
A. The LSAC‘s application software
At the direction of the law schools, the LSAC developed software to process electronic applications.1 Id. at ¶ 22. The software comprises both “applicant-facing and Member Law School-facing elements.” Id. On the applicant side is the LSAC‘s “Credential Assembly Service,” through which applicants submit transcripts, letters of recommendation, and other application documents to the LSAC all at once, saving them “time and effort.” Id. at ¶ 23. The LSAC, acting as a “middleman,” transmits those materials to an applicant‘s chosen law schools. Id. at ¶¶ 2, 23.
On the law school-facing side of the LSAC‘s software, schools can review applications and manage enrollment through its “LSAC Unite” product. Id. at ¶ 33. LSAC Unite is a “customer relationship and enrollment management platform that enables law schools to build, nurture, and manage the pipeline of prospective students.” Id. (internal quotations omitted). The law schools do not pay for the LSAC‘s application platform, having “directed” the LSAC to provide its platform at no cost. Id. at ¶ 33. The LSAC has entered into separate agreements with each ABA-approved law school for access to its application platform, each of which confirms that the law schools do not pay for its services. Id. Those agreements are for one-year terms with automatic renewals upon their expiration. Id. at ¶ 146.
Each year, tens of thousands of students will apply to law school. Id. at ¶¶ 1, 19. In 2025, there were over 60,000 applicants, amounting to over 500,000 law school applications — a 23% increase in applicants from the previous year. Id. at ¶¶ 1, 19, 149. To apply to law school in 2026, an applicant must pay the LSAC a minimum of $260: an initial fee of $215 for its application processing platform, and an additional $45 per application. Id. at ¶¶ 2, 21, 59. The $215 upfront cost provides access to the LSAC‘s application services for five years and includes transcript summarization and authentication, creation of a CAS report, letter of recommendation processing, and electronic application processing. Id. at ¶ 25. Over the last five years, the LSAC‘s subscription fee has increased with each application cycle:
| Application Cycle | Subscription | Each Report |
|---|---|---|
| 2022 | $195 | $45 |
| 2023 | $195 | $45 |
| 2024 | $200 | $45 |
| 2025 | $207 | $45 |
| 2026 | $215 | $45 |
Id. at ¶ 29.
Some applicants may receive waivers for the LSAC‘s fees, including for financial need, but most applicants will pay these costs as part of the application process. Id. at ¶ 24. Absent fee waivers, there is a uniform $45 fee charged per application, regardless of the varying application requirements of each school. Id. at ¶¶ 26-28. Outside fees paid to the LSAC, applicants also pay school-specific fees ranging from $50 to $105, for which they may also seek a waiver. Id. at ¶ 30.
Mr. Risner says the LSAC‘s application scheme has been profitable: over the last three
C. Application processing in other education sectors
In other education sectors, there are two predominate models for application processing: (1) a centralized model, where applicants can apply to many schools through a single service; and (2) a decentralized model, where schools host their own applications, developing software internally or engaging an outside vendor. Id. at ¶¶ 47-48. In both models, schools allegedly compete with each other on the total price of their application fees. Id.
The undergraduate Common Application is an example of a centralized model, offering “most of the same features as does LSAC,” including applicant-facing and school-facing elements. Id. at ¶ 49. And like the LSAC, “the Common Application is a membership organization controlled by the schools who use the application.” Id. at ¶ 50. The Common Application does not charge applicants any fees, and instead charges member schools a flat fee per year. Id. at ¶ 51. Common Application schools then decide whether to pass the costs on to their applicants. Id. at ¶ 52.
Graduate business schools are an example of a decentralized model. Id. at ¶ 56. The
II. The LSAC‘s motion to dismiss
In the summer of 2022, Linvel Risner paid for a CAS subscription from the LSAC and applied to seven law schools. Id. at ¶ 78. In total, Mr. Risner paid $510 to the LSAC — $195 upfront, and $315 in application fees. Id. at ¶¶ 78-79. He was not permitted to apply by other means. Id. at ¶ 80. Now, Mr. Risner brings three claims on behalf of a putative nationwide class of similarly situated individuals, beginning four years prior to the filing of the complaint. Id. at ¶¶ 82-83. Count I alleges a horizontal restraint of trade in the J.D. education market in violation of Sherman Act Section 1. Id. at ¶¶ 95-114. According to the complaint, the J.D. education market is defined as “the 197 Member Law Schools and other law schools in the United States,” who are “direct competitors . . . for applicants to law school.” Id. at ¶¶ 69-70. Count II, also brought under Section 1, alleges a horizontal restraint of trade in the law school application platform market. Id. at ¶¶ 115-38. Mr. Risner defines the law school application platform market as “the market for a platform to handle applications to U.S. law schools,” which “includes the LSAC Law School Application Platform and the other application platforms used by the small number of U.S. law schools (less than 15%) that do not use the LSAC Law School Application Platform.” Id. at ¶ 73. Count III alleges that the LSAC has monopolized the law
The LSAC seeks dismissal of all Mr. Risner‘s claims. DI 22-1. Beginning with the Section 1 claims, the LSAC argues that Mr. Risner does not adequately allege concerted action. Id. at 4-13. And even if he could, the LSAC says that any alleged agreement is not an unreasonable restraint of trade in violation of the Sherman Act because the rule of reason applies, Mr. Risner‘s relevant markets are implausibly alleged and, at any rate, that the complaint does not allege competitive harm in either of the alleged markets. Id. at 13-20. The motion then turns to Mr. Risner‘s monopolization claim, challenging Mr. Risner‘s allegations of monopoly power and exclusive conduct. Id. at 18-22. The LSAC concludes by arguing that regardless of the adequacy of Mr. Risner‘s complaint, he lacks antitrust standing. Id. at 23-25.
Mr. Risner disagrees. DI 24. He argues that the LSAC engaged in concerted action by setting fees at the same price for each of its member schools, which control it. Id. at 2. And the restraint of trade he alleges does not require an assessment of its reasonableness because it is subject to the per se rule. Id. at 11-13. But even if the rule of reason applies, Mr. Risner maintains that he has adequately alleged a rule of reason claim, and that both of his relevant markets are plausible because he defines their “outer boundaries.” Id. at 13-17. As for his monopoly claim, Mr. Risner claims to offer both direct and indirect evidence of the LSAC‘s monopoly power and exclusionary conduct, including the structure of its application platform, exclusive agreements with the law schools, and kickbacks paid to them. Id. at 17-20. Last, Mr. Risner argues that he has antitrust standing because he purchased directly from the LSAC. Id. at 24.
As with any other motion to dismiss, “we accept as true the factual allegations in the complaint, and draw all reasonable inferences in plaintiff‘s favor.” Host Int‘l, Inc. v. MarketPlace, PHL, LLC, 32 F.4th 242, 248 (3d Cir. 2022) (quoting Bell Atl. v. Twombly, 550 U.S. 544, 570 (2007) (citation modified)). But “we are not compelled to accept unsupported conclusions and unwarranted inferences.” Id. Instead of following “an attenuated chain of assumptions,” we rely on “judicial experience and common sense.” Id. And “while it is inappropriate to apply Twombly‘s plausibility standard with extra bite in antitrust and other complex cases . . . we need not accept as true a legal conclusion couched as a factual allegation.” Id. With that in mind, Mr. Risner must plead facts that make each element of his case “plausible on its face” in order to survive the LSAC‘s motion to dismiss. Id.; Wheeler v. Wheeler, 639 F. App‘x 147, 149 (3d Cir. 2016) (“To state such a ‘plausible’ claim, a plaintiff must plead sufficient facts to permit a reasonable expectation that discovery will reveal evidence establishing each element of the relevant cause of action[.]“).
IV. Discussion
Mr. Risner has two things going for him: he alleges concerted action, and he has antitrust standing. The rest presents an uphill battle. For starters, neither of Mr. Risner‘s markets — the J.D. education market nor the law school application software market — is plausibly alleged, dooming his Section 1 claims under the rule of reason. Even assuming the law school application platform market is plausibly alleged, though, the complaint describes a two-sided transaction platform for which Mr. Risner has not alleged anticompetitive harm as a whole. And Mr. Risner‘s Section 2 claim falls short because he does not allege direct evidence of the LSAC‘s market power, and he cannot offer indirect evidence of said market power because the
A. Mr. Risner‘s Sherman Act Section 1 claims must be dismissed
Under Section 1 of the Sherman Act, “[e]very contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal.” In re Insurance Brokerage Antitrust Litig., 618 F.3d 300, 314 (3d Cir. 2010) (quoting
Meeting the requirements of a Section 1 claim is rarely as simple as the brevity of its elements might suggest, however. Am. Needle, Inc. v. National Football League, 560 U.S. 183, 189 (2010) (explaining that “even though, ‘read literally,’ § 1 would address ‘the entire body of private contract,’ that is not what the statute means.“) (quoting National Soc. of Professional Engineers v. United States, 435 U.S. 679, 688 (1978)). Looking to Mr. Risner‘s well-pled, non-conclusory allegations, we conclude that Mr. Risner plausibly alleges concerted action. But Mr. Risner‘s markets are implausible as alleged, and even if plausible, Mr. Risner does not allege sufficient harm across the law school application software market to save that claim, so we dismiss both of his Section 1 claims.
1. The complaint plausibly alleges concerted action
Concerted action is “the hallmark of a Section 1 claim.” Insurance Brokerage, 618 F.3d
The concerted action inquiry “does not turn simply on whether the parties involved are legally distinct entities.” Am. Needle, 560 U.S. at 191. Rather, courts have “eschewed such formalistic distinctions in favor of a functional consideration of how the parties involved in the alleged anticompetitive conduct actually operate.” Id.; see also Copperweld, 467 U.S. at 760 (the Sherman Act is “aimed at substance rather than form.“). As such, the Supreme Court has “repeatedly” accommodated theories under Section 1 where a “legally single entity . . . was controlled by a group of competitors and served, in essence, as a vehicle for ongoing concerted activity.” Id. In analyzing whether Mr. Risner adequately alleges concerted action, then, our focus is not on formalities.
The LSAC argues that both of Mr. Risner‘s Section 1 claims must be dismissed because he has not alleged concerted action. DI 22-1 at 4. Rather, the LSAC says the conduct Mr. Risner challenges (1) is unilateral price setting, and (2) does not plausibly allege a horizontal
a. The challenged conduct is concerted action
Quoting the complaint, the LSAC argues that the conduct Mr. Risner challenges is unilateral price setting and not concerted action because Mr. Risner alleges that the LSAC “sets the price it charges for the Credential Assembly Service subscription reports.” DI 22-1 at 4 (quoting DI 1 at ¶ 27) (citation modified). But that is an incomplete picture of the relevant allegations. Before that, the complaint alleges that the LSAC sets its prices “at the direction of the Member Law Schools that control it.” DI 1 at ¶ 27. The LSAC says that this allegation makes no difference because (1) it is conclusory; (2) a single entity cannot conspire with itself; and (3) a presumption of independent action applies here. DI 22-1 at 5-8. We disagree.
Isolated, Mr. Risner‘s allegation that the LSAC sets its prices at the direction of the member law schools may seem conclusory. See DI 1 at ¶ 27. But there is more to Mr. Risner‘s alleged conspiracy. In re Processed Eggs Products Antitrust Litigation, 821 F. Supp. 709, 718 (E.D. Pa. 2011) (Pratter, J.) (allegations of conspiracy “are not to be judged by dismembering it and viewing its separate parts, but only by looking at it as a whole.“) (quoting Continental Ore Co. v. Union Carbide & Carbon Corp., 370 U.S. 690, 699 (1962) (citation modified)). Relevant here, Mr. Risner alleges that the law schools: created the LSAC through “law school deans who wanted to make legal education accessible and equitable,” DI 1 at ¶ 17 (citation modified); elect the LSAC‘s Board of Trustees, who “manage or direct LSAC‘s business and affairs,” id. at ¶ 18; exercise control over the LSAC by electing the Board of Trustees, with each law school having a
We are also unconvinced that concerted action is lacking because “[a] single entity cannot conspire with itself.” DI 22-1 at 5. As the Supreme Court has explained:
Because the inquiry is one of competitive reality, it is not determinative that two parties to an alleged § 1 violation are legally distinct entities. Nor, however, is it determinative that two legally distinct entities have organized themselves under a single umbrella or into a structured joint venture. The question is whether the agreement joins together independent centers of decisionmaking.
Am. Needle, 560 U.S. at 196 (citation modified); see also Alvord-Polk, Inc. v. F. Schumacher & Co., 37 F.3d 996, 1007 (3d Cir. 1994) (“The actions of a group of competitors taken in one name present the same potential evils as do the actions of a group of competitors who have not created a formal organization within which to operate.“). Nonetheless, the LSAC argues that under the Supreme Court‘s decision in American Needle, we should presume that it acted independently because “[t]he Complaint contains no allegations that any Member Law School had or acted on any ‘interests separate from’ those of LSAC itself in purportedly directing LSAC to set fees” and that Mr. Risner “does not allege, as he must, that any Member Law School is an actual or potential competitor of LSAC.” DI 22-1 at 6 (citing American Needle, 560 U.S. at 197, 200).
In American Needle, an apparel vendor alleged that all 32 of the National Football League‘s teams violated the Sherman Act by jointly forming National Football League Properties (NFLP), an entity meant to develop and license each teams’ intellectual property to produce items like hats and jerseys. 560 U.S. at 187. The teams and the NFLP argued that the NFLP was a “single entity” such that the vendor could not show concerted action. Id. at 197-99. The Supreme Court rejected this argument, explaining that “it is not dispositive that the teams have organized and own a legally separate entity that centralizes the management of their intellectual property. An ongoing § 1 violation cannot evade § 1 scrutiny simply by giving the ongoing violation a name and label.” Id. at 197. Were it otherwise, “every agreement and combination in restraint of trade could be so labeled.” Id. Accordingly, the Court concluded that the teams’ formation of the NFLP constituted concerted action: “The NFL teams do not possess either the unitary decisionmaking quality or the single aggregation of economic power characteristic of independent action. Each team is a substantial, independently owned, and independently managed business.” Id. Thus, “decisions by NFLP regarding the teams’ separately owned intellectual property constitue[d] concerted action.” Id. at 200. Same here.3
The LSAC also attempts to distinguish American Needle on its facts, but the parallels are
It may well be the case, as LSAC posits, that centralized software simplifies the application process for both schools and applicants and therefore creates procompetitive efficiencies. DI 22-1 at 7; Twombly, 550 U.S. at 556 (“of course, a well-pleaded complaint may proceed even if it strikes a savvy judge that actual proof of those facts is improbable, and that ‘recovery is very remote and unlikely.‘“). But our concern at this step is the presence of concerted action, not whether it is justified. Am. Needle, 560 U.S. at 199 (“The justification for cooperation is not relevant to whether that cooperation is concerted or independent action.“); Copperweld, 467 U.S. at 769 (“Of course, such mergings of resources may well lead to efficiencies that benefit consumers, but their anticompetitive potential is sufficient to warrant scrutiny even in the absence of incipient monopoly.“). Similarly, a discussion of whether the law schools are plausibly alleged to be competitors in the law school application platform market is
Whether it is division rivals who play on Sundays or law schools hunting for the best students, we think that a group of competitors’ creation of an entity to do their bidding — in a way materially related the operation and financial success of their respective businesses — is the type of action subject to Section 1. The complaint plausibly alleges concerted action.
b. The complaint plausibly alleges an agreement among the law schools
According to the LSAC, “[e]ven assuming LSAC‘s pricing decisions could amount to concerted action, Plaintiff has pled no facts raising a plausible inference that they are, in fact, the product of an agreement among the law schools.” DI 22-1 at 8 (emphasis in original). Put differently, the LSAC urges us to conclude that the complaint pleads at most a “rimless” hub and spoke conspiracy. Insurance Brokerage, 618 F.3d at 370 (“a plaintiff must show not simply that the defendants all engaged in similar wrongdoing, but that they agreed to undertake concerted action in restraint of trade.“) (emphasis added); Howard Hess Dental Lab‘ys Inc. v. Dentsply Int‘l, Inc., 602 F.3d 237, 256 (3d Cir. 2010) (dismissing claim for hub and spoke conspiracy for lack of a “rim” and refusing to assess allegations on “rimless” conspiracy because such a conspiracy was not alleged). We disagree for many of the same reasons discussed above under the heading of concerted action.
i. The complaint does not identify a rule or policy constituting direct evidence of a horizontal agreement between the law schools
First, the LSAC argues that Mr. Risner‘s allegations do not allege any direct evidence of
We note at the outset that absent explicit direction from the Third Circuit adopting the Second Circuit‘s view in Relevent Sports, that decision is not binding. See Aguilar v. Vitamin Shoppe, Inc., 2018 WL 1960444, at *7 (D.N.J. April 25, 2018) (“Second Circuit decisions do not bind district courts in the Third Circuit.“). Understanding Relevent Sports for the useful
To that end, in Davis I, Chief Judge Beetlestone aptly rejected the plaintiff‘s attempt to shoehorn his allegations into Relevent Sports: “[u]ltimately, though, at the motion to dismiss stage, it is the allegations in the operative complaint that set the terms of the analysis—not the parties’ arguments in their briefs or at oral argument.” Davis I, 787 F. Supp. 3d at 59. So too here. Howard Hess, 602 F.3d at 257 (“To the extent the Plaintiffs are recasting their allegations in an effort to circumvent a motion to dismiss, we must reject that approach.“).
Mr. Risner says that he alleges a policy within the purview of Relevent Sports because “he challenges the Council‘s policy of charging the same CAS Fees for every school.” DI 24 at 7. But that is post hoc argument; the complaint does not identify any rule or policy, in form or substance, governing the relationship between the law schools and the LSAC. Rather, the complaint describes the LSAC as a “conduit for, participant in, facilitator of, and beneficiary of an agreement to restrict trade between Member Law Schools.” DI 1 at ¶ 113. And the law schools purportedly enter ”de facto exclusive agreements” with LSAC, id. ¶ 146, which are not equivalent to the explicit rules imposed on members of the associations in Muhammad and Davis. A plaintiff cannot hitch his wagon to Relevent Sports simply by labeling any conduct a
ii. The alleged conduct amounts to circumstantial evidence of a horizontal agreement
Second, the LSAC argues that Mr. Risner fails to show circumstantial evidence of an agreement among the law schools, lacking the required allegations of parallel conduct and plus factors. DI 22-1 at 9-12. Mr. Risner disagrees again: the law schools have engaged in parallel conduct because they all require law students to apply through the LSAC, and the complaint alleges a motive to enter a conspiracy, actions contrary to the law schools’ own interests, and the improbability that each school would make the same decision in the absence of an agreement. DI 24 at 8-10. We start with parallel conduct and then consider Mr. Risner‘s alleged plus factors. We conclude that he meets his burden at this stage.
To plausibly allege an agreement by circumstantial evidence, the allegedly parallel conduct “must be placed in a context that raises a suggestion of a preceding agreement, not merely parallel conduct that could just as well be independent action.” Lifewatch Services Inc. v. Highmark Inc., 902 F.3d 323, 333 (3d Cir. 2018) (quoting Twombly, 550 U.S. at 557 (citation modified)). The LSAC argues that complaint does not identify when any of the schools began to use its application platform, so Mr. Risner comes up short of parallel conduct. DI 22-1 at 9-10. In turn, Mr. Risner argues that temporal proximity among the law schools is not necessary because “it is elementary that an unlawful conspiracy may be and often is formed without
Next we consider Mr. Risner‘s alleged plus factors. The complaint does not fairly suggest that the law schools have acted contrary to their own interests by engaging in the alleged conduct. “[A]llegations of conspiracy are deficient if there are ‘obvious alternative explanations’ for the facts alleged.” Insurance Brokerage, 618 F.3d at 322-23 (quoting Twombly, 550 U.S. at 567). As the complaint itself acknowledges — and Mr. Risner‘s opposition brief does not challenge — a centralized application model permits an applicant to “apply to many schools through a central application service.” DI 1 at ¶ 48; DI 24 at 10. And “each Member Law School . . . competes with each other to woo applicants to apply to, and ultimately attend, its institution.” Id. at ¶ 20. It would therefore be rational for self-interested, competing law schools to decide to use a centralized application service to maximize the number of applications each receives. See Kerwin v. Casino, 802 F. App‘x 723, 726 (3d Cir. 2020) (plaintiff‘s own allegations made clear that independent self-interest was an obvious alternative explanation for defendant casinos’ parallel behavior).
Mr. Risner tries to avoid this obstacle by suggesting that he does not challenge the benefits of a centralized application software. DI 24 at 10. Rather, he says the schools have
We are persuaded, however, that the complaint plausibly alleges a motive to conspire among the law schools. “Evidence of a motive to conspire means that the market is conducive to price fixing.” In re Confectionary Antitrust Litig., 801 F.3d 383, 398 (3d Cir. 2015). A market may be conducive to price fixing where it is highly concentrated, there are high barriers to entry, or declining prices or profits make collusion attractive. See In re Blood Reagents Antitrust Litig., 266 F. Supp. 3d 750, 772 (E.D. Pa. 2017). Typical examples of entry barriers are “economies of scale, high initial investment, capital market imperfections, risk, low prices, scarce inputs or customers, product reputation and promotion, and government constraints.” P. Areeda & H. Hovekamp, Antitrust Law, ¶ 421 (5th ed. 2021) (Areeda & Hovenkamp). Without citing to supporting authority, Mr. Risner‘s opposition brief suggests three ways that he has plausibly alleged a motive to conspire: (1) the stability of not having to make independent, market-based decisions about fees for an application platform; (2) the receipt of kickbacks; and (3) the free provision of the application platform to law schools. DI 24 at 9. These proffered reasons speak
The complaint adds a little more. It alleges that the “LSAC has constructed illegitimate and insurmountable barriers to entry for competitors,” including “using the revenue from the price-fixed Applicant Platform fee to provide its service in the Law School Application Platform Market for free to law schools.” DI 1 at ¶ 144. Potential competitors are also unable to “feasibly sell alternative application platforms” to the member law schools, according to the complaint, because none “could feasibly, or legally, provide a competing platform to Member Law Schools at no cost while providing kickbacks to schools using price-fixed fees extracted from applicants, as LSAC does.”7 Id. at ¶ 145. In this way, Mr. Risner adequately pleads high barriers to entry, and suggests that the law school application software market is conducive to price fixing. Areeda & Hovenkamp, ¶ 421f; see also United States v. Dentsply Int‘l, Inc., 399 F.3d 181, 195-96 (3d Cir. 2005) (defendant supplier‘s access to and “power over” dealers through exclusive agreements was a barrier to entry).8 The fact that a market is conducive to collusion alone, however, “does not create a reasonable inference of concerted action[.]” Confectionary Antitrust Litig., 801 F.3d at 398; Insurance Brokerage, 618 F.3d at 322 (“care must be taken with the first two types of evidence, each of which may indicate simply that . . . market behavior is interdependent and characterized by conscious parallelism.“); Areeda & Hovenkamp at ¶ 421
Significantly, the complaint’s allegations imply a traditional conspiracy — “the most important plus factor in cases like this one.” Confectionary Antitrust Litigation, 801 F.3d at 398; Insurance Brokerage, 618 F.3d at 321-22. That plus factor “looks for ‘proof that the defendants got together and exchanged assurances of common action or otherwise adopted a common plan even though no meetings, conversations, or exchanged documents are shown.’” Confectionary Antitrust Litig., 801 F.3d at 398. Mr. Risner does not offer direct evidence of meetings, conversations, or exchanged documents between the law schools at this stage. But he does allege that the LSAC was created and is controlled by the law schools, which elect the LSAC’s Board of Trustees (for which all ABA-approved law schools have a vote) and receive kickbacks for their participation. DI 1 at ¶¶ 14, 17-18, 42-44, 100-103. These allegations plainly imply a traditional conspiracy, rendering it plausible that at some point the law schools “got together . . . adopted a common plan,” and continue to implement that plan. Confectionary Antitrust Litigation, 801 F.3d at 398.
Mr. Risner plausibly alleges the horizontal and vertical aspects of a hub-and-spoke conspiracy. As he tells it, the law schools engaged in concerted action by creating the LSAC and electing a body of individuals to control its operations. That brings us to Mr. Risner’s next hurdle: he must also plausibly allege an unreasonable restraint of trade in a plausibly defined market. That one, he does not clear.
2. The alleged restraints will be analyzed under the rule of reason
Courts apply one of three tests to assess the reasonableness of an alleged restraint of
Which of these three tests applies in an antitrust case generally depends on judicial experience with the type of restraint at issue. As such, application of the per se or quick look tests require a degree of familiarity:
Recognizing the inherent limits on a court‘s ability to master an entire industry—and aware that there are often hard-to-see efficiencies attendant to complex business arrangements—we take special care not to deploy these condemnatory tools until we have amassed ‘considerable experience with the type of restraint at issue’ and ‘can predict with confidence that it would be invalidated in all or almost all instances.’
Nat‘l Collegiate Athletic Ass’n v. Alston, 594 U.S. 69, 89 (2021); Winn-Dixie, 89 F.4th at 439. By Mr. Risner’s account, application of the per se rule is as easy as ABC: the law schools are competitors, and the actions of the LSAC constitute concerted action, so the LSAC’s price setting is per se illegal horizontal price fixing. DI 24 at 11-12. That is an unwarranted oversimplification. Broadcast Music, Inc. v. Columbia Broadcasting System, Inc., 441 U.S. 1, 9 (1979) (“Literalness is overly simplistic and often overbroad. When two partners set the price of their goods or services they are literally ‘price fixing,’ but they are not per se in violation of the
Regardless of whether the alleged restraint is necessary to make centralized application processing available, however, its admitted benefits are the type that would justify the application of the rule of reason. United States v. Brown Univ. in Providence in State of R.I., 5 F.3d 658, 672 (3d Cir. 1993) (holding that “when bona fide, non-profit professional associations adopt a restraint which they claim is motivated by public service or ethical norms . . . economic harm to consumers may be viewed as less predictable and certain.”). Taking care not to employ the “condemnatory tools” of the per se and quick look tests without the requisite predictability of the restraint alleged, Alston, 594 U.S. at 89, “it is proper to entertain and weigh procompetitive justifications proffered in defense of an alleged restraint before declaring it to be unreasonable.”
3. Neither of the alleged markets can sustain Mr. Risner’s claims
Under the rule of reason, Mr. Risner “bears the heavy initial burden of proving” that the LSAC’s alleged restraint “has a substantial anticompetitive effect that harms consumers in the relevant market.” Winn-Dixie, 89 F.4th at 438 (quoting Ohio v. Am. Express Co., 585 U.S. 529, 541 (2018) (Amex) (citation modified). However, “courts usually cannot properly apply the rule of reason without an accurate definition of the relevant market,” so we start there. Amex, 585 U.S. at 542-543; Elad v. Nat’l Collegiate Athletic Ass’n, 160 F.4th 407, 414 (3d Cir. 2025) (“Because courts must engage in a robust market analysis, a precisely defined relevant market is essential.”).
A relevant market is “the area of effective competition,” the “outer boundaries” of which are illustrated by “significant substitution in consumption or production.” Lifewatch, 902 F.3d at 337 (quoting Amex, 585 U.S. at 543) (citation modified). A relevant market’s boundaries are also clarified by a consideration of the cross-elasticity of demand between two products that are
More often than not, “proper market definition can be determined only after a factual inquiry into the commercial realities faced by consumers” and is therefore not usually suited for disposition on a motion to dismiss. Queen City Pizza, Inc. v. Domino’s Pizza, Inc., 124 F.3d 430, 436 (3d Cir. 1997). But it is not a “per se prohibition against dismissal of antitrust claims for failure to plead a relevant market.” Id. “Where a plaintiff fails to define its proposed relevant market with reference to the rule of reasonable interchangeability and cross-elasticity of demand . . . the relevant market is legally insufficient and a motion to dismiss may be granted.” Id. So, to avoid dismissal, Mr. Risner must sensibly allege the interchangeability and cross-elasticity of demand for products in his markets. The LSAC argues that both markets are insufficiently stated in the complaint — the J.D. education market and the law school application platform market. DI 22-1 at 15-16, 18. Mr. Risner responds that he has carried his burden at this stage by defining their outer boundaries. DI 24 at 15-17. As alleged, neither market can sustain Mr. Risner’s claims.
a. The J.D. education market
Mr. Risner defines the J.D. education market as “the 197 Member Law Schools and other law schools in the United States,” who are “direct competitors . . . for applicants to law school.” Id. at ¶¶ 69-70. LSAC argues this market is implausible because “[t]here are no facts suggesting
Given the allegations in the complaint, we credit with Mr. Risner’s first argument that there is a lack of substitutability between J.D. programs and other educational programs like business and medical schools. DI 1 at ¶ 77; Queen City Pizza, 124 F.3d at 436. But we disagree with Mr. Risner that the J.D. education market is plausibly alleged because all law schools share a “relevant attribute” of accepting applications for a J.D.-conferring program. DI 24 at 16. This argument does not confront the defect the LSAC identifies — that the complaint does not account for interchangeability or cross-elasticity of demand among law schools. Yes, all law schools in the United States confer J.D. degrees. But that alone does not suffice to define the market, just as the product offered by top-tier Division I football programs does not automatically equate with that of lower-tier Division I football programs. Rock v. Nat’l Collegiate Athletic Ass’n, 928 F. Supp. 2d 1010, 1021-1022 (S.D. Ind. 2013) (“NCAA schools offering top-tier Division I football programs may be comparable substitutes, but it is implausible to suggests that lower-tier Division I football schools offer the same high level of in-kind benefits . . . that Plaintiffs allege are present at all NCAA schools across their market.”).
The Supreme Court’s decision in Alston does not salvage Mr. Risner’s proposed market
Mr. Risner’s alternative submarkets seem to acknowledge a difference in the “in-kind benefits” that different institutions of varying rank, rigor, and prestige might offer. Id.; DI 1 at ¶ 71. He alleges that the J.D. education market “includes submarkets in which certain law schools compete with other certain law schools for applicants with comparable GPA, test scores, and other admissions criteria as may be determined by the LSAC’s own application data.” DI 1 at ¶ 71. But the complaint does not frame these purported submarkets any better than the J.D. education market generally. There could be relevant submarkets, but the complaint gives no
We entirely agree with courts that have cautioned against dismissing based on an ill-defined relevant market. Id.; Lifewatch, 902 F.3d at 337. But the alleged market in this case is said to comprise well over 200 law schools. DI 1 at ¶¶ 69, 142. The value of a “precisely defined market” is highest in such cases. Elad, 160 F.4th at 414. And while the complaint need only allow for identification of the “outer boundaries” of a market (rather than a precise definition), we are at a loss to do that without speculating. That we cannot do.10 Absent clarity from the complaint, we dismiss Count I under the J.D. education market without prejudice.
b. The law school application software market
The second alleged market — to which both of Mr. Risner’s remaining claims apply — is that for law school application software. DI 1 at ¶¶ 73-76. Mr. Risner defines it as “the market for a platform to handle applications to U.S. law schools,” which comprises “the LSAC Law School Application Platform and the other application platforms used by the small number of U.S. law schools (less than 15%) that do not use the LSAC Law School Application Platform.” Id. at ¶ 73. Like the J.D. education market, the LSAC says that the law school application software market is implausible for failure to include allegations related to the product’s
As he does for the J.D. education market, Mr. Risner alleges that medical schools, business schools, and other schools are inadequate substitutes for law schools. DI 1 at ¶ 77. We take that allegation to mean that application platforms for other schools are inadequate substitutes for law school application platforms. However, other allegations of the complaint undermine this position. Mr. Risner alleges that “law school admissions do not pose any unique technical requirements that could not be addressed by experienced vendors” that provide application platforms for business and other professional schools, and “would be competitive forces in the relevant market” if not foreclosed by the LSAC. DI 1 at ¶¶ 60-61. In addition, the complaint uses Georgia Tech as an example of a school that uses the same application software for all graduate programs. Id. at ¶ 58.
Again, Mr. Risner attempts to correct this deficiency by telling us something different than what the complaint actually alleges. This time, he argues that his “alleged market encompasses any platform that could support law school applications.” DI 24 at 17 (emphasis added). But that just does not square with the allegations that other application platforms are inadequate substitutes. And the complaint’s description of what the market includes — LSAC’s platform and those used by “the small number of U.S. law schools” that use something else — clearly does not extend to any platform that could support law school applications. DI 1 at ¶ 73. In this way, the allegations of the complaint suggest that the proposed market “clearly does not encompass all interchangeable substitute products even when all factual inferences are granted in [his] favor.” Queen City Pizza, 124 F.3d at 436. Such inconsistent pleading warrants dismissal. Areeda & Hovenkamp at ¶ 270 (explaining that contradictory pleading regarding market
4. Even if plausibly defined, the law school application platform market is two-sided
Setting aside our analysis above, and assuming that Mr. Risner has plausibly defined the law school application platform market, we conclude that the platform market is two-sided. A two-sided platform “is one that facilitates activities involving at least two interdependent groups of users.” Areeda & Hovenkamp at ¶ 565d. The “manager” of the two-sided market — in this case the LSAC — “maximizes its profits by assessing the right price level and also coordinating the correct ‘participation level’ between the two sides.” Id. (using Uber as an example because it “must set driver prices that are sufficiently high to attract sufficient drivers, but not so high as to repel prospective riders.”). One version of a two-sided platform is a “transaction platform,” the “key feature” of which is that “they cannot make a sale to one side of the platform without
The most widely known example involving a two-sided transaction platform is the Supreme Court’s decision in Amex. 585 U.S. at 529. There, the United States sued American Express, alleging that “antisteering provisions” in its agreements with merchants violated Section 1 by imposing higher fees. Id. at 539. On appeal, the issue was whether the plaintiffs met their burden of proving that Amex’s antisteering provisions had an anticompetitive effect in the relevant market. Id. at 542. The Court concluded that the credit card market was a single, two-sided transaction platform necessitating an analysis of anticompetitive effects on the platform as a whole: “[b]ecause they cannot make a sale unless both sides of the platform simultaneously agree to use their services, two-sided transaction platforms exhibit more pronounced indirect network effects and interconnected pricing and demand.” Id. at 543-547. The plaintiffs’ exclusive focus on the anticompetitive effects on merchants — one side of the two-sided platform — was insufficient to carry their evidentiary burden. Id. at 547-48.
The LSAC advocates for Amex’s application here. It argues that, like in Amex, the LSAC cannot make a sale to one side of the platform without simultaneously doing so on the other side. DI 22-1 at 19. As a result, the LSAC reasons, the complaint is fatally nearsighted, focusing only
According to the complaint, the Council’s software contains “offerings to both applicants and Member Law Schools” comprising “both applicant-facing and Member Law School-facing elements.” DI 1 at ¶ 22. Prospective students pay for the software, while the law schools receive it for free, memorialized in agreements with LSAC that renew annually. Id. at ¶¶ 23-25, 33, 146. Indeed, the complaint expressly refers to the two sides of the platform: “LSAC has constructed illegitimate and insurmountable barriers to entry for competitors by structuring LSAC’s . . . Platform in such a way that competitors have no feasible way to access potential customers on either side of the platform.” Id. at ¶ 144 (emphasis added). The LSAC acts as a “middleman,” requiring applicants to “pay $45 each time LSAC sends a Credential Assembly Service report to a Member Law School, which occurs each time an applicant applies to a school.” Id. at ¶¶ 1, 26 (emphasis added).
Thus, we agree with The LSAC that the complaint frames the law school application platform market as a two-sided transaction platform. The LSAC’s platform certainly exhibits indirect network effects because students can apply to “many schools through a central application service.” Id. at ¶¶ 48-49. If applicants could apply to only a handful of schools through the LSAC, the value of its product would be greatly diminished. Moreover, the LSAC cannot make a “sale” on one side (the applicant-facing side) without also doing so on the other (the law-school-facing side) — the paradigmatic feature of a transaction platform. Id. at ¶ 26;
The complaint does not allege anticompetitive harm on both sides of the platform. The complaint alleges that the “LSAC has constructed illegitimate and insurmountable barriers to entry for competitors by structuring LSAC’s Law School Application Platform in such a way that competitors have no feasible way to access potential customers on either side of the platform.” DI 1 at ¶ 144. That seems to suggest that higher barriers to entry have plagued both sides of the law school application platform market. But the complaint continues: “These barriers include using the revenue from the price-fixed Application Platform fee to provide its service in the Law School Application Platform Market for free to law schools.” Id. As Amex teaches, “[t]he optimal price might require charging the side with more elastic demand at below-cost (or even negative price).” 585 U.S. at 536-37. Accordingly, the Court there noted that credit card networks “might well lose money on the cardholder side by offering rewards such as cash back, airline miles, or gift cards.” Id. at 537 (emphasis in original). So too, here: the mere fact that LSAC offers its product to the law schools for free does not show anticompetitive
Moreover, we will not place dispositive weight on Mr. Risner’s conclusory allegation that the LSAC enters exclusive agreements with the law schools. Host Int’l, 32 F.4th at 248 (3d Cir. 2022). Mr. Risner points to our decision denying Equifax’s motion to dismiss in Greystone Mortg., Inc. v. Equifax Workforce Sols. LLC, 2025 WL 540021, at *4 (E.D. Pa. Feb. 18, 2025), but the situation there was different.13 There, the complaint alleged both multi-year exclusive deals, de facto exclusive deals, and identified the percentage of the market foreclosed by the allegedly anticompetitive conduct. Id. Not so here. For instance, Mr. Risner’s opposition brief posits that “the Council offers incentives for loyalty” by sharing profits with the schools “to induce exclusivity.” DI 24 at 22. But that is not what the complaint says. Rather, it alleges that the LSAC offers kickbacks in the form of grants, DI 1 at ¶ 43 — with no insight into how the LSAC determines which schools receive them — and then separately makes a conclusory allegation that the LSAC enters into exclusive agreements with the member law schools. Id. at
Boiled down, the complaint’s alleged harm is supracompetitive prices imposed on the applicant side of the law school application software market. DI 1 at ¶ 148 (“The lack of any feasible competition has enabled LSAC to charge fees for the Application Platform that are far above those that could be charged in a competitive market[.]”). But “[e]vidence of a price increase on one side of a two-sided transaction platform cannot by itself demonstrate an anticompetitive exercise of market power.” Amex, 585 U.S. at 547. We understand that an “insistence of precision can become a costly rule of nonliability to the extent it produces too many false negatives.” Areeda & Hovenkamp at ¶ 565d(1). We do not intend to impose one here. And that concern does not absolve an antitrust plaintiff of the need to adequately allege anticompetitive harm in a relevant, plausibly defined market. Queen City Pizza, 124 F.3d at 436. Because Mr. Risner does not do so here, we dismiss count II without prejudice.
B. Mr. Risner does not plausibly state a monopolization claim
We dismiss count III for monopolization because the law school application platform market is implausible as alleged. See Section IV.A.3.b., supra. Assuming that the law school application platform market were adequately pled, however, we further conclude that Mr. Risner does not plausibly allege a monopolization claim for reasons closely linked to his Section 1 claim. A monopolization claim under
1. Mr. Risner does not plausibly allege direct evidence of monopoly power
First we must determine the appropriate test for direct evidence of monopoly power. The LSAC argues that the test is a conjunctive one, requiring an antitrust plaintiff to plead both supracompetitive pricing and reduced output. DI 22-1 at 21 (citing Broadcom, 501 F.3d at 306, BanxCorp v. Bankrate, Inc., 847 F. App’x 116, 120 (3d Cir. 2021)). Mr. Risner, on the other hand, says that the test is disjunctive, such that he may plead supracompetitive pricing or reduced output. DI 24 at 18 (citing Mylan, 838 F.3d at 434). Mr. Risner’s position is unsupported by the authority he relies on: “to support a claim that a defendant set supracompetitive prices through direct evidence a plaintiff often must provide an analysis of the defendant’s costs, showing both that the defendant had an abnormally high price-cost margin and that the defendant restricted output.” Mylan, 838 F.3d at 434 (citation modified) (emphasis added). This makes sense because “[m]arket power is the ability raise price profitably by restricting output,” so these elements go hand-in-hand. Areeda & Hovenkamp at ¶ 501; see also id. at ¶ 503a (explaining the Lerner Index, which measures market power with relation to the effect of price and output on each other). The LSAC’s authority substantiates this conclusion. BanxCorp, 847 F. App’x at 120 (holding that evidence of increased prices alone was insufficient
Mr. Risner alleges increased prices: a $215 upfront fee and $45 per application fee which, according to Mr. Risner, “can be only a few dollars per application” and is significantly higher than that charged to applicants by the Common Application. DI 1 at ¶¶ 2-3, 24, 51; Areeda & Hovenkamp at ¶ 503 (“For the firm with some market power, its profit-maximizing price exceeds marginal revenue and therefore exceeds marginal cost as well.”). But Mr. Risner does not allege reduced output. He purports to do so by arguing that “the Council also restricts the output of additional platforms competing to process applications to law school.” DI 24 at 19. This is alleged exclusionary conduct repackaged as restricted output. See id. at ¶ 651d (cautioning that “our concern about monopoly and the opportunities of rivals must not be allowed to obscure the objective of antitrust law, which seeks to protect the process of competition on the merits and the economic results associated with workable competition” and noting that higher output “is welcomed by the
As the LSAC points out, Mr. Risner alleges that “[l]aw school applicants . . . have increased every year since the 2023 cycle, with the 2025 cycle seeing more than a 23% increase in applicants.” DI 1 at ¶ 149. This, of course, is the opposite of reduced output. BanxCorp, 847 F. App’x at 120 (holding, where defendant’s customers “nearly tripled within less than three years,” that the defendant did not restrict ouput) (citation modified); Amex, 585 U.S. at 549 (holding there was “no such evidence” that output was restricted because “[t]he output of credit-card transactions grew dramatically from 2008 to 2013, increasing 30%.”). Mr. Risner does not plausibly allege market power by direct evidence.
2. Mr. Risner does not plausibly allege indirect evidence of monopoly power
To show market power by indirect evidence, a plaintiff must plausibly allege that (1) the defendant had market power in the relevant market, and (2) there were barriers to entry into the relevant market. Mylan, 838 F.3d at 435. Indirect evidence of monopoly power also requires that the plaintiff plausibly define the relevant market. Id. For the reasons explained above, Mr. Risner does not plausibly define the law school application platform market. See Section IV.A.3.b., supra. So, Mr. Risner is likewise unable to show monopoly power by indirect evidence. BanxCorp, 847 F. App’x at 120 (failure to define the relevant market “doom[ed] any attempts to prove monopolization circumstantially.”); Queen City Pizza, 124 F.3d at 437-43 (dismissing monopolization claim, attempted monopolization claim, and related Section 1 claim for failure to define relevant market). As such, Count III for monopolization is dismissed without prejudice.
As a backstop, the LSAC argues that Mr. Risner lacks antitrust standing because his theory is “too speculative and attenuated.” DI 22-1 at 23-25. Mr. Risner’s response is straightforward: he has antitrust standing because he was a direct customer of the LSAC. DI 24 at 23-25. We agree with Mr. Risner and conclude that he has standing.
“While the name echoes the familiar formulation of Article III, the judicially imposed requirement of antitrust standing is far more limiting.” Host Int’l, 32 F.4th at 249 (citing Gulfstream II Assocs., Inc. v. Gulfstream Aerospace Corp., 995 F.2d 425, 429 (3d Cir. 1993)). Five factors help guide the analysis:
(1) the causal connection between the antitrust violation and the harm to the plaintiff and the intent by the defendant to cause that harm, with neither factor alone conferring standing; (2) whether the plaintiff‘s alleged injury is of the type for which the antitrust laws were intended to provide redress; (3) the directness of the injury, which addresses the concerns that liberal application of standing principles might produce speculative claims; (4) the existence of more direct victims of the alleged antitrust violations; and (5) the potential for duplicative recovery or complex apportionment of damages.
Id. (citation modified). The third factor — the directness of the injury — has been described as “all-important” and “the focal point by which the remainder of the [] factors are guided,” so we start there. In re Modafinil Antitrust Litig., 837 F.3d 238, 263-64 (3d Cir. 2016) (citation modified).
Mr. Risner alleges that he was directly injured by the LSAC’s allegedly anticompetitive conduct. Specifically, he says that he paid a supracompetitive price for its product as a result of the LSAC’s “unlawful conduct” — $195 for the subscription and $315 in report fees. DI 1 at ¶¶ 78-81. That is enough at this stage. In re Processed Egg Products Antitrust Litig., 881 F.3d 262, 274-75 (3d Cir. 2018). This scenario is distinct from one in which a purchaser seeks to
With the third factor in Mr. Risner’s favor, the rest logically follow. The causal connection between the allegedly anticompetitive prices and Mr. Risner’s having to pay those prices to apply to law school is quite clear; protecting consumers is of paramount importance under the antitrust laws; the LSAC does not (and cannot) identify a more direct victim of the alleged violation; and there is no risk of duplicative recovery. Processed Egg Products, 881 F.3d at 275-76 (walking through factors and concluding that direct purchasers had antitrust standing). Mr. Risner has standing to sue, so our dismissal of his claims is without prejudice.
V. Conclusion
Mr. Risner’s complaint is not without its merits, but the LSAC’s arguments required a close examination that revealed facial legal deficiencies. The time to cure those deficiencies is in an amended complaint, not in briefing. We must grant the LSAC’s motion and dismiss without prejudice because the complaint: alleges implausible markets; inadequately states harms across the law school application software market as a whole; and, taken as a whole, does not point to direct or indirect evidence of the LSAC’s market power. Mr. Risner has 14 days to file an amended complaint addressing the deficiencies identified in this memorandum, if the facts allow.