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LegalZoom sues NC State Bar for federal antitrust violations

LegalZoom.com has filed a federal antitrust lawsuit against the North Carolina State Bar seeking more than $10.5 million in damages.

The self-help legal services company alleges in its complaint that the bar violated the Sherman Antitrust Act by refusing to register its two prepaid legal services plans.

In its complaint, which was filed June 3 in the U.S. District Court for the Middle District of North Carolina, LegalZoom argues that the bar’s actions are anticompetitive and monopolistic.

The suit hinges on the U.S. Supreme Court’s landmark opinion in February against the North Carolina State Board of Dental Examiners, which held that the board violated antitrust laws by shutting down non-dentists who were selling teeth-whitening services.

The decision was based on the fact that the state was not actively supervising the board, which was composed primarily of members of the dental profession who stood to gain from driving out their competition.

In its complaint against the state bar, LegalZoom noted that the bar had filed an amicus brief on behalf of the dental board in which it argued that an adverse ruling for the board would put the bar at risk for antitrust lawsuits. The bar is composed of lawyers who, LegalZoom argues, stand to lose business to self-help legal websites.

“As the North Carolina State Bar predicted, and as the U.S. Supreme Court considered and implicitly held, the unsupervised activities of the North Carolina State Bar are now fully subject to the reaches of the federal antitrust laws,” LegalZoom’s attorneys wrote in the complaint.

LegalZoom asserts that the bar does not have the authority to refuse to register the company’s prepaid legal services plans, which provide customers with access to local attorneys.

The company currently offers the plans in 42 states and plans to roll out the services in more states soon, according to its complaint.

LegalZoom also is challenging the bar’s authority to issue cease-and-desist letters accusing individuals and businesses of practicing law without a license. The dental board used similar letters to drive non-dentist teeth whiteners out of the state.

After the bar issued cease-and-desist letters against LegalZoom, the company filed suit in the state’s Business Court in 2011 seeking a judgment declaring that its services are legal. That case is ongoing.

Follow Phillip Bantz on Twitter @NCLWBantz


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