BARBRI And 11 Law Schools Get Hit With A $50 Million Antitrust Lawsuit
This ain't BARBRI's first time at the antitrust rodeo.
BARBRI, the bar exam prep course behemoth, is no stranger to antitrust litigation. It settled one case in 2013 for $9.5 million and another case in 2007 for $49 million.
And now BARBRI has a new antitrust case on its hands, as reported by the WSJ Law Blog:
The nation’s largest bar exam-prep company is facing allegations that it elbowed a smaller rival out of the market, capitalizing on special relationships with law schools that it had nurtured with donations and gifts.
BARBRI Inc. and several law schools were named in a federal antitrust lawsuit brought by LLM Bar Exam LLC, a company that prepares foreign lawyers to sit for the bar exam in the United States. The complaint, which was filed in Manhattan on Thursday, alleges an illegal monopoly and asks for $50 million in damages.
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The hefty complaint, which weighs in at 279 pages if you include the 70 exhibits, makes the following allegations, per the Journal’s Joe Palazzolo:
According to the complaint, BARBRI representatives have persuaded officials at several top-ranked law schools to exclude LLM Bar Exam from marketing on their campuses. It alleges that BARBRI has disparaged the quality of LLM’s courses, even though its students have passed bar exams at higher rates than BARBRI’s.
In some cases, law schools have barred LLM Bar Exam from holding courses on campus while providing BARBRI with classrooms to use free of charge, the complaint said.
BARBRI has “regularly provided donations and gifts,” to the law schools and awarded their faculty “large contracts” to teach BARBRI courses, in order to maintain its special status, the complaint says.
Emanuele Tosolini, founder of LLM Bar Exam and an LLM graduate himself, told the WSJ, “We are very confident in exposing the corruption inside law school administrations as well as the indiscriminate use of donations as a tool to illegally obtain economic advantages.”
Cynics might say that using donations to manipulate law school administrations is nothing new. But it will be interesting to see what specific dirty laundry gets aired during discovery or trial (if it comes to that).
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The lawsuit, which seeks $50 million in damages, contains claims of monopolization, combination and conspiracy to restrain trade, misrepresentation and fraud, unfair competition, violation of the Racketeer Influenced and Corrupt Organizations Act, copyright infringement, and defamation. Here’s additional background, from Law360:
Barbri has been a defendant in “numerous” lawsuits over the past few years regarding antitrust and monopoly claims against the company, the complaint said, adding that, as a result of the lawsuits, JDs saw an increase in new bar review companies entering the market.
Prominent BARBRI competitors include Kaplan Bar Review and Themis Bar Review (disclosure: ATL advertisers). For other options, see this round-up of bar exam prep courses (note that it’s from 2013, so contact each company for current rates and information).
Why hasn’t this competition come to the LLM bar review market? Here’s more from Law360:
[B]ecause the LLM bar review market is considered its own separate marketplace — law schools are not required to disclose statistics regarding foreign LLM graduates’ bar passage rates — Barbri was able to hold on to its alleged monopoly to effectively maintain a larger market share of the foreign LLM market, compared to the JD bar review market, the complaint said.
And, according to LBE, BarBri is only able to maintain its stranglehold on the LLM market through the cooperation and collusion of law schools.
“Barbri has and continues to have a long standing relationship with 12 law schools around the country … that has developed, in part, by collusion through direct donations by Barbri, special agreements with law schools, large contracts to law school faculty members, personal bribes and significant financial gain by law school administration, staff and personnel,” the company said in its complaint.
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A BARBRI spokeswoman told the WSJ that the company hasn’t been served yet and “does not comment about pending or potential litigation.” The various defendant law schools did not immediately get back to Law360 for comment on Friday.
As bar exam passage rates continue to plummet around the country, the need for bar review courses — and the stakes for litigation like this — will only increase. We’ll follow this case with great interest.
Bar Prep Co., Law Schools Slammed With $50M Antitrust Suit [Law360]
Bar Prep Company Accused of Boxing Out Smaller Rival [WSJ Law Blog via Morning Docket]
David Lat is the founder and managing editor of Above the Law and the author of Supreme Ambitions: A Novel. You can connect with David on Twitter (@DavidLat), LinkedIn, and Facebook, and you can reach him by email at [email protected].
