RPJ’s Gregory Feit Quoted in “Patch” on the Legal Antitrust Battle Between Dumbo and Piece of Cake Moving Companies

Two well-known New York moving and storage companies are at the center of a federal antitrust case pending in the Southern District of New York.  Plaintiff Dumbo Moving & Storage sued Piece of Cake Moving & Storage in 2022, and chief among the claims were Dumbo’s allegations that Piece of Cake’s growth stemmed from a deliberate predatory-pricing campaign.

In a 2023 decision, U.S. District Judge Edgardo Ramos allowed certain claims in the case to proceed while dismissing or rejecting other claims. Following Dumbo’s filing of a second amended complaint earlier this year, four additional plaintiffs were brought in: Big Apple Moving & Storage, Inc., All Star Moving and Storage, Inc., Zero Gravity Moving LLC, Brownstone Brothers Moving Inc. Piece of Cake moved to dismiss the case earlier this summer, and the motion is now pending before Judge Ramos.

In the operative complaint, Plaintiffs accuse Defendant of lowering prices (quoting between 60 to 80 cents per cubic foot) below market prices, with Dumbo further alleging that the typical price in the New York City moving market in 2019 was $1.25 per cubic foot. Plaintiffs allege that Piece of Cake’s strategy of performing moves at or below cost was intended to drive market rates down to a level at which competitors could no longer compete, thereby forcing them out of the market, after which Piece of Cake could raise its prices once it became the sole or dominant force in the market.

In comments to the online newspaper Patch, RPJ’s Gregory Feit was quoted stating that lowering prices to attract customers, rather than to drive out competitors, cannot itself form the basis of a predatory-pricing claim.

Instead, he said, Dumbo would need to show both that Piece of Cake’s prices were below its average variable costs and that Piece of Cake had a reasonable prospect of recovering the losses incurred from those below-cost prices.

“In other words, if Piece of Cake’s prices are above its average variable cost, its pricing will presumptively be held lawful,” Feit said.

That is because antitrust law generally does not punish a company simply for charging less than its competitors or lower than market rates. In fact, lower prices can benefit consumers and represent exactly the kind of competition that antitrust laws seek to preserve and foster. Moreover, “evaluating recoupment typically requires close analyses of the structure and conditions of the relevant market,” Feit said. “Markets that are highly diffuse and competitive, or where new entry is easy, typically do not support monopoly pricing.”

Read the full article here: Inside NYC’s Cheap-Moving Price War: Dumbo vs. Piece Of Cake | New York City, NY Patch

This article is intended as a general discussion of these issues only and is not to be considered legal advice or relied upon. For more information, please contact RPJ Attorney Gregory Feit who counsels clients on employment law, litigation, arbitration, negotiation, and trial advocacy. Mr. Feit is admitted to practice in New York.