NOT PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

____________

No. 22-3287

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SMART COMMUNICATIONS HOLDING, INC.; HLFIP HOLDING, INC., d/b/a Smart 

Communications IP Holdings,

Appellants,

 

v.

GLOBAL TEL-LINK CORPORATION; COUNTY OF YORK; YORK COUNTY 

PRISON; ADAM OGLE, in his official capacity as York County Prison Warden

____________

On Appeal from the United States District Court

for the Middle District of Pennsylvania

(District Court No. 1-21-cv-01708)

District Judge: Honorable Jennifer P. Wilson

Argued October 19, 2023

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Before: CHAGARES, Chief Judge, PHIPPS and CHUNG, Circuit Judges

(Filed December 22, 2023)

Phillip J. Closius [ARGUED]

William N. Sinclair

Silverman Thompson Slutkin & White

400 E Pratt Street

Suite 900

Baltimore, MD 21202

Matthew M. Haar

Saul Ewing

2 N Second Street
2

Penn National Insurance Plaza, 7th Floor

Harrisburg, PA 17101

Katrina M. Quicker

Quicker Law

900 Circle 75 Parkway

Suite 100

Atlanta, GA 30339

Counsel for Appellants

Katherine M. Clemente

Greenberg Traurig

One Vanderbilt Avenue

New York, NY 10017

Brian T. Feeney [ARGUED]

Greenberg Traurig

1717 Arch Street

Suite 400

Philadelphia, PA 19103

Counsel for Appellee Global Tel-Link Corporation

Bridget E. Montgomery

Adam M. Shienvold [ARGUED]

Eckert Seamans Cherin & Mellott

213 Market Street

8th Floor

Harrisburg, PA 17101

Counsel for Appellees County of York, York County Prison, and Adam Ogle
3

____________

OPINION

____________

CHUNG, Circuit Judge.

Plaintiffs Smart Communications Holding, Inc. and HLFIP Holding, Inc.

(collectively, “Smart”) competed with Global Tel-Link Corporation (“GTL”) for an 

exclusive contract to provide inmate calling service at York County Prison (“YCP”), a 

prison operated by York County, Pennsylvania. In the end, York County contracted with 

GTL. Smart then sued GTL and multiple defendants affiliated with York County (“York 

Defendants”) claiming, among other things, that: 1) GTL and the York Defendants 

violated Section 1 of the Sherman Antitrust Act by blocking competition for inmate 

calling service at YCP through their exclusive contract; and, 2) GTL committed

Pennsylvania torts when it defamed Smart to York County and YCP, causing York 

County to break off negotiations with Smart. The District Court granted Defendants’ 

motion to dismiss as to all of Smart’s claims. 

We agree with the District Court that Smart’s allegations do not state a federal 

antitrust claim. We remand Smart’s state tort claims for the District Court to determine 

whether the Complaint sufficiently pleads the elements of those torts. Accordingly, we 

will affirm the District Court’s ruling in part, vacate in part, and remand for further 

 This disposition is not an opinion of the full Court and, pursuant to I.O.P. 5.7, does 

not constitute binding precedent.
4

consideration.

I. BACKGROUND1

Inmate calling service (“ICS”) refers to the telephone system that prisoners use to 

make calls outside the prison. YCP, like many other prisons, enters into exclusive ICS 

contracts. Under these contracts, a company provides ICS, collects fees from call 

recipients, and pays the prison a share of their fees as “commission.” Joint App. (“JA”) 

79.

GTL (or its predecessor-in-interest) has been YCP’s ICS provider for two decades, 

during which time the contract was renewed nine times. GTL is also a major player in 

the national ICS market. The Complaint alleges that GTL and its main competitor share 

at least eighty percent of the national ICS market.

Smart provides ICS, as well as mail-scanning and other services for the 

corrections environment. In an unrelated lawsuit, Smart sued York County and YCP for 

patent infringement, claiming that YCP’s mail-scanning system infringed upon Smart’s 

technologies. It was during negotiations to settle that patent-infringement lawsuit that 

Smart says it learned York County had an ICS contract with GTL that would soon expire. 

Smart immediately sent YCP’s Warden, Clair Doll,

2 marketing materials about its own 

ICS offerings, followed shortly thereafter with proposed terms that Smart claims would 

1 Because we write for the parties, we recite only facts pertinent to our decision.

2 Defendant Adam Ogle was substituted as a defendant in official capacity when he 

succeeded Warden Doll as YCP’s Warden.
5

have doubled York County’s commission while cutting user fees in half. In the weeks 

that followed, Smart met with Warden Doll and other YCP officials, provided more 

information about its services, and exchanged drafts of Smart’s proposed terms with 

Warden Doll.

Smart alleges that, several weeks before the contract’s expiration, GTL realized 

that it could lose the ICS contract and made defamatory statements in an attempt to 

dissuade YCP from moving forward with Smart. Smart alleges that GTL’s outside 

counsel met with officials from York County and YCP and made “false claims and 

misrepresentations” about Smart. Id. at 84. Smart alleges three false statements:

(1) “Smart Communications had purchased a company named 

Lattice and that, because of Smart Communications’ alleged 

arrangement with Lattice, if YCP proceeded to replace GTL’s 

phone equipment with Smart Communications’ phone 

equipment, GTL had a right to and would exercise its right to 

seize Smart Communications’ equipment based on an alleged 

judgment that GTL had received against Lattice, thereby 

leaving YCP without any communications services for the 

duration of its potential contract with Smart 

Communications.” Id. at 85.

(2) “Smart Communications’ Asserted Patent allegedly was 

invalid and that the York Defendants should not settle the 

Patent Litigation.” Id.

(3) “Smart Communications was infringing multiple GTL 

patents, and that GTL would sue Smart Communications and 

immediately obtain an injunction to prohibit Smart 

Communications from providing certain services that were 

the subject of Smart Communications’ proposal to York 

County and YCP.” Id.

Smart also alleges that after its meeting with York County and YCP, GTL’s 
6

outside counsel sent Smart a letter stating, among other things, that GTL believed that 

some of Smart’s patents were invalid or infringed upon GTL’s patents.

About a month before York County’s contract with GTL was to expire, Smart still 

believed that its negotiations with York for the next ICS contract were proceeding well. 

Just days before the contract expired, Warden Doll continued to express interest in 

Smart’s proposal and asked Smart for information to give the York County 

Commissioners, the body with authority to award the contract.

But Smart did not win the contract. York County renewed its contract with GTL

on a month-to-month basis until it could finalize a new agreement with GTL. Ultimately, 

York County renewed its contract with GTL (the “new contract”) for a five-year term 

with provision for two additional one-year renewals. The new contract also contained an 

early termination clause that required York County to pay GTL liquidated damages if it 

canceled the contract before the end of the five-year term. The financial terms of the new 

contract differed from those Smart had proposed and Smart alleges that its proposal 

would have resulted in more commission paid to York County with lower fees paid by 

call recipients.

After losing the contract bid, Smart filed a lawsuit in the United States District 

Court for the Middle District of Pennsylvania, suing GTL and three York Defendants—

York County, YCP, and YCP’s Warden, Adam Ogle, in his official capacity. Smart’s 

Complaint brought four counts, three of which are relevant on appeal.

Smart’s first count claimed that all Defendants violated Section 1 of the Sherman 
7

Antitrust Act. This claim was based on Smart’s allegation that the “exclusive dealing 

contract” between GTL and York County forecloses competition for ICS at YCP. Id. at 

106.

Smart’s second and third counts claimed that GTL violated Pennsylvania law 

through (1) tortious interference with Smart’s prospective business relations; and,

(2) unfair competition. Both claims were based on Smart’s allegation that when GTL’s 

outside counsel met with York County and YCP, GTL made “false and misleading 

statements” to sabotage Smart’s potential contract. Id. at 111.

Defendants moved to dismiss. The District Court granted their motion and 

dismissed all claims at issue here without prejudice.3 The District Court found that Smart 

failed to state a Sherman Antitrust Act claim because (1) it did not allege that Defendants 

suppressed competition within the relevant market; and, (2) its alleged injury did not 

establish antitrust standing. The District Court also found that Smart failed to state a 

claim for the two alleged state-law torts, largely because Smart did not adequately allege 

“independently actionable conduct” to support either claim. Id. at 43.

The District Court gave Smart twenty-one days to amend its Complaint, after 

which the Court would close the case. Smart let the twenty-one days run, and the Court 

3 The District Court found that Eleventh Amendment immunity barred Smart’s 

claims against YCP and those portions of Smart’s claims seeking money damages from 

Warden Ogle. Those claims or claim portions were dismissed with prejudice. The 

District Court also dismissed without prejudice a count claiming champerty and 

maintenance. Smart does not challenge those decisions here.
8

closed the case. Smart then appealed.

II. DISCUSSION4

On appeal, Smart challenges the District Court’s rulings dismissing its Sherman 

Antitrust Act claims and its state-law tort claims. We address each in turn.

A. Sherman Antitrust Act Claims

Count One of Smart’s Complaint claims that Defendants violated Section 1 of the 

Sherman Antitrust Act. That Section provides that “[e]very contract, combination in the 

form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the 

several States, or with foreign nations, is declared to be illegal.” 15 U.S.C. § 1.

To state a Sherman Act claim, a plaintiff must allege both anticompetitive conduct 

and antitrust injury. ZF Meritor, LLC v. Eaton Corp., 696 F.3d 254, 281 (3d Cir. 2012). 

Smart fails to allege both. It does so primarily because its claim conflates two different 

4 The District Court had jurisdiction over Smart’s Sherman Antitrust Act claims 

under 28 U.S.C. §§ 1331 and 1337. As to Smart’s state-law claims, the District Court 

had supplemental jurisdiction under 28 U.S.C. § 1367 and diversity jurisdiction under 28 

U.S.C. § 1332.

We have jurisdiction under 28 U.S.C. § 1291. The District Court dismissed 

several of Smart’s claims without prejudice and its order was non-final. This order 

became final and, hence, appealable when Smart chose not to amend by the date set by 

the District Court. See Berke v. Bloch, 242 F.3d 131, 135 (3d Cir. 2001); Weber v. 

McGrogan, 939 F.3d 232, 240 (3d Cir. 2019). Moreover, after filing its initial notice of 

appeal, Smart notified the District Court that it intended to stand on its Complaint and 

requested entry of final judgment. The District Court then entered final judgment for 

Defendants and Smart filed a supplemental notice of appeal.

We review the dismissal de novo, accepting all well-pleaded allegations as true 

and drawing all reasonable inferences in favor of the non-moving party. See Brown v. 

Card Serv. Ctr., 464 F.3d 450, 452 (3d Cir. 2006).
9

products, which Smart refers to interchangeably as “ICS,” when defining the relevant 

market. That is, Smart alleges that Defendants engaged in anticompetitive conduct in the 

product market for ICS contracts, a product that Smart acknowledges it competes to sell 

to prisons like YCP in a national market (we will refer to this product-geographic market 

combination as “the national market for ICS contracts”). But Smart argues it suffered 

antitrust injury in a different geographic market, limited to YCP, based upon a different 

product market, ICS itself; i.e., the market comprised of YCP inmates, and those with 

whom they communicate, actually using ICS services (we will refer to this productgeographic market combination as “the YCP ICS market”).

Smart argues that GTL and YCP violated the Sherman Act because the new 

contract constitutes anticompetitive conduct. Its argument is primarily based on the 

duration of the contract, which Smart contends prevents it from competing for future ICS 

contracts for an unreasonable length of time. Smart does not argue against the exclusive 

nature of the contract, just against the five-year duration and other terms that generally 

reinforce the duration of the contract.

A long-term, exclusive contract is not per se unlawful; rather, the probable effect 

of such contracts must harm competition in order to be considered illegal exclusive 

dealing agreements under the Sherman Act. See ZF Meritor, 696 F.3d at 281. In ZF 

Meritor, LLC v. Eaton Corp., we found that multiple five-year contracts of 

“unprecedented length” were unlawful exclusive dealing contracts. Id. at 287. Our 

conclusion was based on a number of factors, including not only the contracts’ duration, 
10

but also the fact that the contracts collectively bound every purchaser in the product 

market and locked up 85% of all purchases therein. Id. at 286–89. The situation here is 

markedly different, involving a single purchaser whose purchasing power (either 

independently or through exclusive contracts) nowhere nears 85% of the national market 

for ICS contracts. Smart therefore does not allege anticompetitive conduct.

To avoid this conclusion, Smart argues that the relevant market is the YCP ICS 

market. But Smart’s claim does not challenge the anticompetitive nature of the YCP ICS 

market at all. Indeed, Smart seeks to itself become the monopoly provider in the YCP 

ICS market.

5

 Moreover, it is plain from Smart’s Complaint that the product relevant to 

its antitrust claim is ICS contracts. An ICS contract is the product that Smart and GTL 

competed to sell to York and it is the product that Smart alleges Defendants blocked 

Smart from selling when they entered into the new contract. For these reasons, we reject 

Smart’s assertion that its claim should be evaluated with respect to the YCP ICS market, 

5 Smart is right that YCP’s ICS users can only purchase call services through YCP’s 

chosen ICS provider. But Smart acknowledges that that monopoly is created because 

ICS users are in a correctional environment and are always bound to use the ICS provider 

selected by the facility. See, e.g., JA 98 (“The inmates of the YCP and those they wish to 

call—family, friends, attorneys, etc.—have no way to communicate by phone other than 

through the ICS offered by York County. Nor do they have any choice in ICS 

provider.”). This aspect of the YCP ICS market distinguishes the case here from those 

cited by Smart in support of its argument that the geographic market should be comprised 

of YCP alone. In those cases, consumer demand could have been met by consumers’

choice of providers but for the exclusive contract, whereas here it is not the contract, but 

the carceral environment itself, that prevents such choice. See Jefferson Par. Hosp. Dist. 

No. 2 v. Hyde, 466 U.S. 2, 22 (1984); Oltz v. St. Peter’s Cmty. Hosp., 861 F.2d 1440, 

1447 (9th Cir. 1988). But see Collins v. Associated Pathologists, Ltd., 844 F.2d 473, 478 

(7th Cir. 1988).
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rather than the national market for ICS contracts.

Even if we were to assume that the new contract unlawfully forecloses 

competition in the national market for ICS contracts, Smart’s alleged antitrust injury fails 

as Smart again focuses on the YCP ICS market.6 Antitrust injury means “injury of the 

type the antitrust laws were intended to prevent and that flows from that which makes 

defendants’ acts unlawful.” Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 

489 (1977). Smart argues antitrust injury is established because GTL charges ICS users 

higher fees than Smart would have charged.7 But this argument again confuses the two 

products of ICS. Smart’s alleged injury is to buyers in the YCP ICS market (the noncompetitive nature of which Smart does not challenge), not in the national market for ICS 

6 Some commentators have noted that the two concepts of anticompetitive conduct 

and antitrust injury, though distinct, are frequently conflated. See Phillip E. Areeda & 

Herbert Hovenkamp, Antitrust Law: An Analysis of Antitrust Principles and Their 

Application ¶ 335f (Aug. 2023). We note that the District Court’s opinion and the 

briefing might have some measure of this. For example, the District Court considered 

Smart’s argument that the provisions in the new contract that were designed to block it 

from competing “demonstrate[d] antitrust injury.” JA 23. Similarly, Defendants argue 

that Smart does not allege antitrust injury because it does not properly allege that they 

acted anticompetitively in connection with the new contract. On the other hand, had 

Smart sufficiently alleged anticompetitive conduct in the national market, it is true that 

would also likely have established antitrust injury. ZF Meritor, 696 F.3d at 289. In any 

case, to move forward, Smart needs to allege antitrust injury flowing from 

anticompetitive conduct. For the reasons explained above, Smart fails to allege either.

7 Smart’s claim does not implicate, so we do not consider, whether the 

noncompetitive nature of the YCP ICS market is unlawful. Cf. Arsberry v. Illinois, 244 

F.3d 558 (7th Cir. 2001) (suit brought by ICS users themselves); Daleure v. Kentucky, 

119 F. Supp. 2d 683 (W.D. Ky. 2000) (same).
12

contracts—the relevant market for its claim. Those allegations are thus insufficient to 

establish antitrust injury. 

Because Smart has not sufficiently alleged anticompetitive conduct nor antitrust 

injury, we will affirm the District Court’s ruling dismissing Smart’s Sherman Antitrust 

Act claim against all Defendants.

B. Pennsylvania Tort Claims

While Smart’s allegations are insufficient to state a claim under federal antitrust 

law, we find that Smart’s tort claims warrant further analysis by the District Court.

Smart claims GTL committed two torts: tortious interference with prospective 

business relations and unfair competition. In analyzing the tortious-interference claim, 

the District Court recognized that, absent wrongful conduct, GTL’s alleged conduct was 

privileged or justified because competitors can “interfere with others’ prospective 

contractual relationships.” JA 37 (quoting Acumed LLC v. Advanced Surgical Servs., 

Inc., 561 F.3d 199, 215 (3d Cir. 2009)). Similarly, the District Court noted that for its 

unfair-competition claim to survive, Smart needed to allege an actionable unfair method 

of competition. 

Smart argued that it had pled wrongful conduct, in the form of unfair competition, 

sufficient to foreclose GTL’s assertions of privilege and justification at this early stage. 

Unfair competition, however, was also the tort Smart alleged at Count Three. To support 

Count Three, Smart argued that the unfair method of competition employed by GTL was 
13

its tortious interference. The District Court rejected these arguments8since neither claim 

could stand on its own and concluded that Smart needed to allege independently

actionable wrongful conduct as to each claim, rather than each claim relying upon the 

other.9 JA 42–43.

Smart contended that it also stated “independently actionable conduct” for both 

torts through its allegation that GTL defamed it. JA 109–110. The District Court 

rejected this contention and found that the allegations in Smart’s Complaint were 

inadequate to plead defamation.

When evaluating whether a plaintiff has stated a claim, we “begin by taking note 

of the elements a plaintiff must plead.” Ashcroft v. Iqbal, 556 U.S. 662, 675 (2009). 

After identifying the elements of a claim, we evaluate the plaintiff’s allegations using a 

two-step approach. See id. at 679. First, we identify and reject all conclusory 

allegations. Id. Then, we consider whether the remaining allegations plausibly state a 

claim for relief. Id.

Pennsylvania statute provides the elements of a defamation claim. See 42 Pa. 

Consol. Stat. § 8343.10 The first element—and the one the District Court focused on—is 

8 Smart does not raise these arguments here.

9 We express no opinion as to the full requirements to state a claim for either tort 

under Pennsylvania law—which neither the District Court nor the parties discuss 

completely.

10 The District Court analyzed whether Smart pled facts sufficient to allege 

defamation and did not decide whether, under Pennsylvania law, Smart had “to actually 
14

“[t]he defamatory character of the communication.” Id. § 8343(a)(1). Pennsylvania 

courts interpreting this element have explained that to be defamatory, a statement must be 

more than “annoying and embarrassing” to the plaintiff. Scott-Taylor, Inc. v. Stokes, 229 

A.2d 733, 734 (Pa. 1967). Rather, it must be the kind of statement that “tends ... to deter 

third persons from associating or dealing with” the plaintiff. Birl v. Phila. Elec. Co., 167 

A.2d 472, 475 (Pa. 1960). The District Court rejected Smart’s allegations regarding the 

“defamatory nature of GTL’s remarks [as] conclusory.” JA 40. Our view, however, is 

that Smart does allege non-conclusory facts on this point.

Smart alleges that in order to make York County drop its negotiations with Smart, 

GTL made multiple false statements to York County and YCP telling them that: pursuant 

to a judgment it had, it would seize Smart’s equipment that would be installed to fulfill 

the ICS contract at YCP; Smart’s patent at issue in its patent-litigation lawsuit against 

York and YPC was invalid; and, Smart was infringing multiple GTL patents and GTL 

would sue Smart to prohibit it from using those infringing technologies at YCP. These 

allegations of falsity and their deterrent effect go beyond the mere “[t]hreadbare recitals 

of the elements of a cause of action” that we reject as conclusory. Iqbal, 556 U.S. at 

678.11

plead a separate [defamation] cause of action.” JA 40. Neither party contends this was 

error and we do not reach that issue here.

11 In its brief on appeal, GTL argues that Smart’s allegations are also inadequate

because Smart “pleads no facts establishing that the alleged statements were false.” 
15

Having found that these allegations are not conclusory, we now consider whether 

the allegations plausibly state a claim for relief. Id. at 679. The District Court suggested 

that Smart’s allegations might also fail because Smart only alleged that GTL made 

predictions or false statements about matters of opinion—not matters of fact, as required 

for defamation. See, e.g., Baker v. Lafayette Coll., 532 A.2d 399, 402 (Pa. 1987). Smart 

argues that GTL’s alleged statement that it “had a judgment [against Lattice] giving it the 

right to seize Smart’s equipment” is a defamatory fact that “can be objectively verified as 

true or false.” Reply Br. 23. Smart also argues that some of GTL’s opinion statements 

might be actionable defamatory “‘mixed’ opinion” statements—that is, opinion 

statements that “imply the existence of undisclosed defamatory facts.” Green v. Mizner, 

692 A.2d 169, 174 (Pa. Super. Ct. 1997). 

We agree that the alleged defamatory statements appear to include some 

predictions and statements of opinion. The statements contained in the Complaint also 

appear, however, to concern matters of fact. Because it viewed Smart’s allegations as 

conclusory, the District Court did not examine whether Smart alleges any factual

statements or mixed opinion statements (as well as the other required elements of Smart’s 

Resp. Br. 37. But under Pennsylvania statute, the plaintiff does not have the burden of 

pleading or proving facts establishing that the defamatory statement was false; the 

defendant has the burden of proving truth as an affirmative defense. See 42 Pa. Consol. 

Stat. § 8343(b)(1) (defendant has burden of proving “[t]he truth of the defamatory 

communication”); see also LabMD Inc. v. Boback, 47 F.4th 164, 182–83 (3d Cir. 2022) 

(“[A] defendant who disputes falsity has to prove the truth of the defamatory 

communication.”).
16

defamation allegations) sufficient to support independently actionable defamation claims 

as required by the two torts raised in its Complaint. Since we have found that the 

allegations were not conclusory, we will vacate that part of the District Court’s order and 

remand for fuller consideration of whether Smart has adequately pled defamation and the 

viability of the tort claims.

Finally, as the District Court noted, Smart argued for a broader definition of unfair 

competition. Pennsylvania has traditionally defined unfair competition as “passing off a 

rival’s goods as one’s own.” JA 41. Smart argues for a broader definition which 

embraces the idea that “if the means of competition are otherwise tortious with respect to 

the injured party, they will also ordinarily constitute an unfair method of competition.” 

Restatement (Third) of Unfair Competition § 1 cmt. g (Am. L. Inst. 1995). The District 

Court decided that Smart’s unfair-competition claim failed even “assuming that the 

broader definition of unfair competition from the Restatement applies.” JA 46. Though 

the District Court seemed to accept this broader definition, it also held, without further 

explanation, that Smart’s unfair-competition claim failed because Smart cited no cases 

“providing for a cause of action for unfair competition under the circumstances present 

here.” Id. at 45. From this, we are unable to discern what element (or other basis) the 

District Court found lacking. We therefore also leave to the District Court to decide 

whether, after analyzing Plaintiffs’ defamation allegations, Plaintiffs state a claim for 

unfair competition as Pennsylvania courts understand that tort.
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III. CONCLUSION

For the foregoing reasons, we will affirm in part and vacate in part, and remand 

for proceedings consistent with this opinion.