Suit by HRDC Alleging GTL and Securus Violated Sherman Anti-Trust Act Survives Motion to Dismiss
by Douglas Ankney
A suit brought by the Human Rights Defense Center (HRDC) alleging a price-fixing and kickback scheme by prison telephone service providers Global Tel*Link Corp. (now known as ViaPath), Securus Technologies, LLC, and 3Cinteractive Corp. (3Ci), survived a motion to dismiss by Defendants on September 30, 2021.
HRDC, which has published Prison Legal News since 1990 and Criminal Legal News since 2017, filed the suit in U.S. District Court for the District of Maryland on behalf of a putative class of Plaintiffs who have paid, or will pay, $9.99 or $14.99 to receive a single collect call billed by 3Ci for either Securus or ViaPath/GTL, pursuant to their inmate calling service (ICS) contracts with governments operating prisons or jails.
Though this particular battle is being waged over exploitative pricing, the longer war with these firms will also have serious constitutional repercussions. As reported elsewhere in this issue, Securus and ViaPath/GTL are engaged in protracted legal battles over the illegal recording of prisoners’ privileged phone conversations with their attorneys. [See: PLN, Feb. 2022, p.36.]
In this case, the first move was made by Securus, which in 2010 launched two calling services:
• ‘PayNow,’ which charges a fee of $14.99 to a customer’s credit card for a call lasting up to 15 minutes; and
• ‘Text2Connect,’ which charges a fee of $9.99 to a customer’s mobile phone account for a call lasting up to ten minutes.
Securus contracted with 3Ci to collect payments from customers and maintain websites for the two calling services. In return, 3Ci receives a ‘transaction fee’ for each call made. Securus also provides each jail or prison a kickback of $1.60 per PayNow call and $0.30 for each Text2Connect call made.
In 2012, ViaPath/GTL began offering its ‘Advance Pay One Call’ (APOC) service through its own ICS contracts with governments operating prisons and jails. The APOC service charges a $3.00 transaction fee to the call recipient’s credit card plus a standard per-minute rate contained in the ICS contracts. ViaPath/GTL also pays the jail or prison a kickback—euphemistically referred to as a ‘site commission’ payment—found in the individual contracts with those governments for each call.
In their suit, Plaintiffs allege that Defendants violated the Sherman Antitrust Act prohibition against price-fixing because ViaPath/GTL initially planned to offer its APOC service at rates significantly lower than those for services offered by Securus. Then, in November 2012, when Securus agreed to purchase 3Ci’s patented technology, it conditioned the purchase on an agreement by ViaPath/GTL to market and operate its APOC service at the same price Securus charges for its calls. At that point ViaPath/GTL established a price structure that resulted in a consumer cost almost identical to Securus’ cost.
The Defendants moved to dismiss the suit pursuant to Federal Rule of Civil Procedure 12(b)(6) on the ground that the complaint failed to state a claim. Taking up the motion by citing SD3 v. Black & Decker, 801 F.3d 412 (4th Cir. 2015), the Court observed that to establish a Sherman Antitrust Act claim under 15 U.S.C. § 1, a plaintiff must prove:
• a contract, combination, or conspiracy; that also
• imposed an unreasonable restraint of trade.
Further, the Court said that to survive a motion to dismiss, a complaint must allege enough facts to state a plausible claim for relief, citing Ashcroft v. Iqbal, 556 U.S. 662 (2009). But when evaluating the sufficiency of a plaintiff’s claim under Rule 12(b)(6), the Court also said it must accept factual allegations in the complaint as true and construe them in the light most favorable to the plaintiff, citing Nemet Chevrolet, Ltd. v. Consumeraffairs.com, Inc., 591 F.3d 250 (4th Cir. 2009).
Applying those standards, the Court then determined that Plaintiffs had alleged sufficient facts to sustain a claim and denied the motion to dismiss as to the Sherman Antitrust Act claim. See: Albert v. Global Tel*Link Corp., 2021 U.S. Dist. LEXIS 188394.
Securus and ViaPath/GTL control more than 80% of ICS calls placed by prisoners throughout the U.S.
Anyone who has paid $14.99 or $9.99 for a single phone call from either Securus or GTL/Viapath in the past ten years should contact HRDC at our mailing address or via e mail at: email@example.com.
Related legal case
Albert v. Global Tel*Link Corp.
|Cite||2021 U.S. Dist. LEXIS 188394|