Regional Multiple Listing Service of Minnesota, Inc. v. American Home Realty Network, Inc.
9 F. Supp. 3d 1032
D. Minnesota
2014

Background

  • AHRN (operator of NeighborCity) alleges RMLS and member brokers used sham copyright claims and data-access restrictions to exclude AHRN from necessary MLS listing information, harming competition in real-estate referral and agent-services markets.
  • RMLS initially sued AHRN for copyright infringement; AHRN filed counterclaims under Sherman Act § 1, Minnesota antitrust law, California Cartwright Act, and Minnesota deceptive trade practices law alleging a concerted refusal to license data and coordinated sham copyright assertions.
  • The court previously denied RMLS’s motion to dismiss AHRN’s counterclaims, finding AHRN plausibly alleged a conspiracy, sham-litigation exception to Noerr-Pennington, and a group boycott/unreasonable restraint of trade. (Reg’l Multiple Listing Serv. of Minn., Inc. v. Am. Home Realty Network, Inc., 960 F. Supp. 2d 958.)
  • AHRN later added Edina Realty (largest RMLS member) and its parent HomeServices as counterclaim-defendants, alleging (inter alia) that: Edina participated in enforcing access restrictions; HomeServices sent a cease-and-desist letter on Edina’s behalf; and both refused to negotiate licenses or referrals.
  • Edina and HomeServices moved to dismiss. The court denied their motion, holding AHRN’s allegations plausibly plead a § 1 conspiracy (including a per se group boycott theory and sham-litigation allegations) and that HomeServices’ direct letter suffices to allege independent participation by the parent.

Issues

Issue Plaintiff's Argument Defendant's Argument Held
Whether AHRN plausibly alleged a § 1 contract, combination, or conspiracy to restrain trade RMLS, member brokers, Edina, and HomeServices conspired to deny AHRN access to MLS data and to use sham copyright claims to exclude competition Edina/HomeServices say prior denial as to RMLS should not automatically apply to them and their conduct is distinguishable Court: Allegations permit a reasonable inference Edina and HomeServices joined the conspiracy; law-of-the-case and pleaded facts suffice to survive Rule 12(b)(6)
Whether cease-and-desist letters can support antitrust liability (sham-litigation theory) Letters were part of a coordinated campaign of over 30 similar letters and aimed to intimidate and preclude AHRN from operating — sham exception applies Defendants contend a single letter (or letters) is not an unreasonable restraint and is typical pre-litigation communications protected by Noerr-Pennington Court: Cease-and-desist letters, as pleaded here, can be sham litigation tools and—when part of a broader scheme—support § 1 liability; form (letter v. lawsuit) is immaterial
Whether AHRN pleaded an illegal group boycott (per se) or unreasonable restraint (rule of reason) Collective refusal to provide licenses/referrals cut off essential supply (listing data), foreclosing competition — constitutes group boycott or at least an unreasonable restraint Defendants argue AHRN never sought a license from Edina specifically; lack of market-power allegations as to Edina; competitors may refuse to cooperate without antitrust liability Court: Allegations that Edina is the largest RMLS member with board influence, participated in enforcing restrictions, and that MLSs control listing data are sufficient at pleading stage to infer market power and a group boycott
Whether parent HomeServices is separately liable for subsidiary conduct HomeServices sent a January 5, 2012 letter on behalf of Edina and other subsidiaries, showing direct participation in the conspiracy HomeServices argues parent liability cannot rest on ownership alone and requires specific allegations of active participation Court: Allegation of HomeServices’ direct letter constitutes independent participation adequate to plead parent liability at this stage

Key Cases Cited

  • Reg'l Multiple Listing Serv. of Minn., Inc. v. Am. Home Realty Network, Inc., 960 F. Supp. 2d 958 (D. Minn. 2013) (denying dismissal of AHRN § 1 counterclaims against RMLS based on pleaded conspiracy, sham-litigation, and group boycott theories)
  • Robertson v. Sea Pines Real Estate Cos., 679 F.3d 278 (4th Cir. 2012) (MLS members may be liable under § 1 for bylaws or actions that exclude innovative competitors from pooled MLS resources)
  • Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (Rule 12(b)(6) plausibility standard for pleadings in antitrust conspiracies)
  • Ashcroft v. Iqbal, 556 U.S. 662 (2009) (legal conclusions not accepted as true on motion to dismiss)
  • Copperweld Corp. v. Independence Tube Corp., 467 U.S. 752 (1984) (Sherman Act § 1 requires concerted action; single-entity rule)
  • Am. Needle, Inc. v. Nat'l Football League, 560 U.S. 183 (2010) (competitors can be separate economic actors capable of conspiring under § 1)
  • Globetrotter Software, Inc. v. Elan Computer Grp., Inc., 362 F.3d 1367 (Fed. Cir. 2004) (pre-litigation communications alleging infringement may be treated as litigation for Noerr-Pennington analysis)
  • Schachar v. Am. Academy of Ophthalmology, Inc., 870 F.2d 397 (7th Cir. 1989) (distinguishing protected expressive conduct from concerted exclusionary action that impedes ability to compete)
  • Morris v. Am. Nat'l Can Corp., 988 F.2d 50 (8th Cir. 1993) (law-of-the-case doctrine explained)
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