Cell towers are mostly owned and operated by tower companies, which rent wireless carriers the right to locate equipment on their towers. Most towers are on property leased to tower companies. TriStar is a tower company with about 650 tower locations (out of 135,000 in the US). Defendant ATC operates about 22,800 tower sites. By mid-2013, TriStar had rights in land on which 594 cell towers currently or formerly operated by ATC, for about $50 million, or $85,000 per site. Its rights allow TriStar to operate cell towers on these sites when ATC’s current leases expire, in return for giving landowners a share of operating revenue; it’s already operating some of the towers. ATC reported an 82% gross profit margin in 2012, while TriStar reported a gross profit margin of 55%. ATC alleged that TriStar’s agreements with two tower companies (SBA and Crown), in which TriStar agreed not to seek property rights in the land under towers owned or controlled by them, constituted an anticompetitive scheme to pay “supra-competitive” prices for property rights at ATC tower sites, “thus raising ATC’s costs to acquire future property rights, in the hopes that ATC would ultimately pay TriStar for a similar standstill agreement.”
In response, ATC “began to be more proactive in seeking to acquire property interests for itself at its tower sites in order to control the use of the site after its current leases expired, and explored opportunities to move its towers or relocate its tower tenants to neighboring ATC towers.” TriStar alleged that the results were false and misleading statements to landowners and sham litigation, allegedly securing future control at 2,944 sites where TriStar had made offers to landowners to acquire land rights under towers operated or formerly operated by ATC.
Nobody’s antitrust claims succeeded, because nobody’s antitrust claims do; the court found that ATC lacked standing to pursue a Sherman Act Section 1 counterclaim against TriStar, and that there was no dangerous probability of ATC successfully monopolizing the national market, given the competition from TriStar, Crown, and SBA (now allies of a sort—yay duopoly!). ATC’s trade secret counterclaim based on its price terms survived, though barely; the court was dubious that price terms were actually trade secrets, but the parties didn’t submit enough evidence either way. ATC’s tortious interference counterclaims also survived. RICO claims against TriStar-related individuals were dismissed.
The Lanham Act piece: ATC argued that any allegedly false statements it made were in connection with efforts to get real property rights (easements/leases/etc.) rather than goods or services. But ATC concededly provides services to landowners and wireless carriers; the statements to landowners were sufficiently connected to these services to support a Lanham Act claim.
Still, ATC argued that its statements were made to suppliers—landowners supplying property—not purchasers, and thus couldn’t prompt a change in purchasing behavior. Here, however, landowners could properly be characterized as consumers for these purposes. TriStar’s evidence showed that ATC characterized landowners as its customers, for example in a mailing to a landowner, describing a commitment to being a “quality service provider for our customers and those companies and partners like you.” The court found Health Care Compare Corp. v. United Payor & United Providers, Inc., No. 96–C–2518, 1998 WL 122900 (N.D.Ill. Mar. 13, 1998) persuasive. That case involved a middleman; the court found that statements to healthcare providers were actionable even though they were paid for services provided through the middleman’s network; the defendant’s business couldn’t succeed unless both payors and providers were convinced to use defendant’s services “with [defendant] providing each with access to the other.”
“Accordingly, where an entity is not a traditional ‘purchaser,’ statements to that entity may still be actionable under the Lanham Act if that entity is essential to the defendant’s ability to meet the needs of the entities that purchase its goods or services.” Thus, the Lanham Act applied to ATC’s statements to landowners because ATC required property rights from them to do business with wireless carriers. “[T]he importance of these property rights to ATC’s business relationship with wireless carriers places ATC’s statements to landowners properly within the bounds of a claim under the Lanham Act.” Hmm. Not sure this is consistent with Lexmark, but perhaps you can think of the “service” of managing the property and passing on revenues to the property owners as something that’s being advertised, and purchased with property rights instead of dollars? Also, there is arguably an even stronger 1-to-1 correspondence between sales made to one and sales lost to another than in Lexmark. Given the need/desire of competitors to use the same land, there does seem to be a strong competitive interest at stake.
TriStar’s tortious interference claim likewise survived.
ATC argued that TriStar hadn’t submitted sufficient evidence of damages. TriStar alleged that ATC made false statements about TriStar to landowners to discourage them from conveying to TriStar. (E.g., an ATC representative described TriStar’s method of operation as “highway robbery” and that the company was a “dirty, rotten, stinking outfit,” and a landowner testified that ATC’s statements left him “no options” but to stop “entertaining the thought of anything else other than [ATC].”) TriStar claimed injury as to 278 of the 2944 sites where they competed; ATC argued that at most TriStar showed that it lost property to ATC or paid more to secure a property interest because of ATC’s actions at 28 sites. TriStar’s expert claimed to extrapolate from those sites to the remaining 250; he observed that as the number of incidents of misconduct by ATC increased, TriStar’s close rate decreased, despite the fact that TriStar increased its marketing expenditures and made allegedly superior offers. His regression analysis was sufficient to survive summary judgment, allowing a jury to conclude that TriStar was injured at 278 sites.