California Association of Realtors, Inc. v. PDFfiller, Inc.
1:16-cv-11021
D. Mass.Mar 2, 2018Background
- CAR (California Ass'n of Realtors) sued PDFfiller and its principals for copyright, trademark, DMCA, and Mass. Gen. Laws ch. 93A violations alleging PDFfiller copied and sold CAR’s California electronic real estate forms (CAR EFRE) via a searchable database.
- PDFfiller counterclaimed and third‑partied, alleging antitrust claims under §2 of the Sherman Act: unlawful tying, monopolization, and attempted monopolization based on CAR’s alleged practice of restricting EFRE access to zipForm (managed by CAR’s subsidiary REBS/zipLogix).
- PDFfiller alleges CAR controls ~90% of California EFRE, conditions nonmember access on purchase/use of zipForm (priced far above competitors), and has used litigation (and threats) to block competitors and deter customers from using other PTM software.
- Procedural posture: CAR moved to dismiss the antitrust counterclaims and third‑party complaint under Fed. R. Civ. P. 12(b)(6); defendants moved under Rule 12(c) to dismiss CAR’s ch. 93A §11 claim. Magistrate Judge Bowler heard arguments and recommended denying both motions.
- Factual allegations deemed plausible at pleading stage: (1) California EFRE plausibly defined as a relevant product/geographic market; (2) tying and tied products (EFRE vs. PTM software) plausibly distinct; (3) CAR plausibly alleged market power, foreclosure, sham litigation, supracompetitive pricing, and resulting antitrust injury.
Issues
| Issue | Plaintiff's Argument (PDFfiller) | Defendant's Argument (CAR/zipLogix/REBS) | Held |
|---|---|---|---|
| Proper market definition for antitrust claims | California EFRE (tying market) and PTM software for CA EFRE (tied market) are plausible; consumers do not reasonably substitute paper/attorneys | Market definitions improperly narrow; obvious substitutes exist (paper forms, attorneys, out‑of‑state forms, general PTM) | Market definition plausible at pleading stage; factual inquiry reserved for later (denied dismissal) |
| Per se unlawful tying (are EFRE and PTM separate products?) | Distinct demand: users want CAR EFRE independent of zipForm; competitors offer separate PTM and EFRE | EFRE useless without PTM software; no separate demand for tied product | Allegations sufficiently plead distinct products, market power, and foreclosure; tying claim survives 12(b)(6) |
| Monopolization / Attempted monopolization (market power, anticompetitive conduct, antitrust injury) | CAR’s ~90% share, supracompetitive zipForm pricing, refusal to license, and sham litigation show power and exclusionary conduct causing antitrust injury | No wrongful conduct pleaded; CAR lawfully enforces IP; no antitrust injury or barriers to entry shown | Pleadings sufficiently allege monopoly power (via pricing/share), sham litigation as anticompetitive, and plausible antitrust injury; claims survive dismissal |
| Mass. Gen. Laws ch. 93A §11 (did conduct occur primarily and substantially in MA; was CAR engaged in trade or commerce?) | (CAR responding) Misconduct in MA: PDFfiller operated and marketed the infringing website from MA (employees, executives, SEO, site operation) | Conduct and injury centered in California; CAR nonprofit not engaged in trade or commerce in MA | Court finds sufficient pleadings to infer center of gravity and actionable conduct in MA; nonprofit status not dispositive; §11 claim survives Rule 12(c) |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (pleading standard: plausible claim required)
- Jefferson Parish Hosp. Dist. No. 2 v. Hyde, 466 U.S. 2 (tying doctrine and per se tying framework)
- Northern Pac. Ry. Co. v. United States, 356 U.S. 1 (Sherman Act purpose and restraint analysis)
- Professional Real Estate Investors, Inc. v. Columbia Pictures Indus., Inc., 508 U.S. 49 (Noerr‑Pennington / sham litigation standard)
- Diaz Aviation Corp. v. Airport Aviation Servs., Inc., 716 F.3d 256 (First Circuit: elements of monopolization and attempted monopolization)
- Flovac, Inc. v. Airvac, Inc., 817 F.3d 849 (First Circuit: relevant market is ordinarily a question of fact)
- Queen City Pizza, Inc. v. Domino’s Pizza, Inc., 124 F.3d 430 (relevant market must reference interchangeability / cross‑elasticity of demand)
- Todd v. Exxon Corp., 275 F.3d 191 (courts hesitate to dismiss market‑definition claims on pleadings; fact‑intensive inquiry)
- In re Asacol Antitrust Litig., 233 F. Supp. 3d 247 (D. Mass. antitrust pleading and discovery considerations)