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Author Topic: BAR REVIEW COMPLAINT PART 2  (Read 1261 times)


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« on: August 28, 2007, 09:32:56 PM »
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18.   Because of the practice of Bar/Bri signing up most law students for the bar exam during their first year, it is important that a bar review course provider offer courses for multiple States, as many such students are frequently unsure of the particular State in which they will ultimately sit for an exam, then practice law.  BAR/BRI is now the only bar review course in the U.S. that offers full-service bar review courses in every State, and, therefore, has an insurmountable advantage tying up most law students in their first year of law school, so that those students are uninterested in shopping for another bar review course thereafter, i.e., they are no longer consumers in the market.
19.   As the examination process is both grueling and obviously important, persons desiring to take a bar examination in a given state for the first time, will, with rare exception, take a full-service bar review course, designed to prepare them for the challenge that lies ahead.  Even persons who have previously failed one or more bar exams frequently attend full-service bar review courses as often as they sit for an exam.  The full-service bar review course proves then to be the principal means to specifically prepare for such a bar examination.  There is little, if any, cross-elasticity of demand between full-service bar courses, on the one hand, versus supplementary specialty courses and generalized texts dealing with the substantive topics which happen to be covered on the bar examination, on the other.
20.   At all relevant times, BAR/BRI’s share of the national submarket for the provision of full-service bar review courses has been in excess of 90 percent.  It recently boasted on its website:  “BAR/BRI Review is the largest bar review company in the United States, preparing more than 95 percent of all students sitting for the bar exam in any given year.”  In many States, its share of the submarket approaches 100 percent.  As a practical matter, in all but a handful of States, Plaintiffs will literally be trapped into taking the BAR/BRI course.  Whatever the quality of BAR/BRI's course may be, it is too often the only choice. 
21.   Regarding entry barriers, they are virtually insuperable in this market.  In part, there are structural limitations to entry, mainly that to succeed, entry must occur in most States in a short period, which is a very costly proposition.  But the principal entry barrier here is BAR/BRI's own wrongful actions which serve to drive up that cost enormously.  Thus, the entry barriers here are largely "endogenous."   Such barriers can be readily lowered, then, only by eviscerating BAR/BRI's monopoly and the practices that helped create it.  At such time as that power is dissipated and those practices enjoined, it will become far easier for potential other competitors to enter the market and succeed. 
22.   Successful entry has been made even more difficult since the combination of BAR/BRI and West.  West provides its powerful data and legal research retrieval service, Westlaw, free of charge to law students who, of course, typically employ it on a virtually constant basis.  At pertinent times herein, Westlaw's user screens have contained regular pop-up and other advertising to promote BAR/BRI.  A substantial number of law students are, in fact, required to view the Westlaw website and its advertising because their professors post homework and related assignments on "The West Education Network," access to which is available by traversing said Westlaw website.  No other competitor has comparable, if any, access to such a powerful promotional vehicle.
23.   There has been no successful entry against BAR/BRI since 1995.  (Regarding events in that year, see West Bar Review discussion below.)
24.   Due to BAR/BRI’s clear monopoly in preparing (or failing to prepare) students to take the bar examination, BAR/BRI has been able to unilaterally control pricing in this market. Specifically, it has raised prices for its course approximately $100 per year in every State, across, the board for several years now.  Where "discounting" takes place, that principally seems to be in the area of providing students discounts for early signups, scholarships and the like.  Such discounts are unrelated to competitive factors, except for two instances which are detailed below. 
25.   BAR/BRI is now the entrenched monopolist in the full-service bar review market, with no significant likelihood of its offering reasonable, competitive prices or of the entry of meaningful new competition, without the assistance of this Court. 
26.   Illinois/Michigan Market Division.    Early in BAR/BRI's existence, back in the late 1970s, it encountered a significant competitor, BRC.  With BAR/BRI, headquartered in Illinois, and BRC, headquartered in Michigan, in order to eliminate competition between them at the time, they secretly conspired then not to compete against each other in their home states.  As a consequence, BRC stayed out of Illinois and BAR/BRI stayed out of Michigan for more than a decade thereafter, thus permitting each company to monopolize their respective States  The conspiracy ended only when BRC was sold to new owners.  This market division conspiracy violated Section 1 of the Sherman Act (15 U.S.C. § 1). 
27.   Becker.    In the mid 1990s, Becker was the largest provider of CPA courses in the U.S.  At that time, it was a most likely entrant into the bar review course business because of its pertinent infrastructure and related course.  (BAR/BRI itself generated a CPA prep course at the time.)  Reed was a BAR/BRI executive who left BAR/BRI.  Shortly thereafter he entered into an agreement with Becker to commence a national bar review course to compete against BAR/BRI.  Over a few day period in the early 1990s, Reed received mysterious phone calls over several nights.  At exactly the same time, Becker inexplicably backed out of the deal.  This all coincided with a suit BAR/BRI had brought against Reed for purported violations of his employment agreement with BAR/BRI during his tenure with them.  Subsequently, Becker never entered the bar review business.  On information and belief, BAR/BRI interfered with and prevented Becker's entry into the market.
28.   PMBR.    PMBR has provided only a multi-state bar review course for many years, i.e., a course covering only the so-called “multi-state exam” or MBE.  BAR/BRI also marketed a separate MBE course to compete against the PMBR course for many years.  In the early 1990s, however, PMBR entered into the full-service bar review course business in California, as well as in several southeastern States.  It then commenced to engage in very aggressive competition against BAR/BRI.  Among other things, PMBR sued BAR/BRI in Colorado, essentially for BAR/BRI changing its class times, such that they interfered with PMBR's supplemental course class times.  PBMR claimed $100,000 in damages.  However, BAR/BRI then settled the matter in an amount believed to be far more than what was ever sought by PMBR. 
29.   Thereafter, PMBR never offered a full-service course and BAR/BRI never offered a for-pay supplemental bar course.  In fact, PMBR's reps were trained to praise BAR/BRI's course in the process of offering PMBR's supplement.  To this day, PMBR and BAR/BRI have agreed not to speak of each other in any critical or comparative way and to freely refer students from one program to the other.  This market division conspiracy also violates Section 1 of the Sherman Act (15 U.S.C. § 1). 
30.   Marino.    For many years Marino was a small competitor in New York State (Its principal claim to fame there was getting John F. Kennedy, Jr. through the New York bar exam after he failed the test two prior times.)  By the 1990s, Marino had expanded into Pennsylvania and New Jersey.  Shortly after he initiated this outward push from New York, BAR/BRI gave Marino's principal a lucrative consulting contract, then shut down its competing course in the several States in which it then operated.  The elevated importance of Marino to BAR/BRI after it entered other States is consistent with BAR/BRI's perpetual goal to keep competition out of the "national" market.  This restraint of trade violated Section 1 of the Sherman Act (15 U.S.C. § 1).
31.   Pieper.    Pieper is one of the few remaining local competitors in the U.S. in this business.  Although it only operates in New York, Pieper has successfully competed against BAR/BRI there for decades.  Why has Pieper alone not come under the wrath of BAR/BRI?  One reason is that Pieper, like Marino, had expanded into at least one other State in the distant past.  At that time in fairly short order, it withdrew from said State and restricted itself to New York, on information and belief, in response to BAR/BRI's threats.  With respect to its pricing, curiously Pieper has no particular incentive to take business away from BAR/BRI, as its prices in New York are virtually identical to BAR/BRI's own substantial prices.  Thus, BAR/BRI still controls more than 75 percent of the entire New York market. Whatever steps BAR/BRI took to restrict Pieper to New York violated Section 1 of the Sherman Act (15 U.S.C. § 1).
32.   West Bar Review.    In 1995, West Publishing formed West Bar Review (“West Bar”) for the purpose of competing in the market for the provision of full-service bar review courses to candidates for admission to the bar of several states.  It then commenced operations throughout the United States, in part by acquiring a number of pertinent regional competitors in the bar review market at the time, including BarPassers, principally operating in California at the time.  West Bar competed vigorously against long-time dominant competitor, BAR/BRI, owned by Harcourt.