Robertson v. Sea Pines Real Estate Cos.

• Decision Date: 14 May 2012
• Docket Number: Nos. 11–1538,11–1539,11–1541.,11–1540,s. 11–1538
• Citation: 679 F.3d 278
• Parties: Albert ROBERTSON; Frances Robertson; William J. Garrity; Garrity Ventures, LLC, on behalf of themselves and all others similarly situated, Plaintiffs–Appellees, v. SEA PINES REAL ESTATE COMPANIES, INCORPORATED, a/k/a The Sea Pines Real Estate Company; Coastal Homes and Land, Incorporated, a/k/a Coastal Homes & Land Realty; Collins Group Realty, Incorporated; Engard Rental Company, LLC, a/k/a Engard Real Estate Company; Bruce A. Goff, Incorporated; Daufuskie Island Resort Realty, LLC; Searchlight Realty, Incorporated, a/k/a Searchlight Realty; Gateway Realty, LLC; Hilton Head Luxury Properties, Incorporated, a/k/a Prudential Premier Island Properties; Charter 1 Realty & Marketing; The William Hilton Company, a/k/a William F. Hilton Realty; EG Robinson III and Associates Realtors, Incorporated, a/k/a EG Robinson Real Estate; Gina Scott Realty; Julie Toon Pawley Real Estate Broker, Incorporated; CRG Properties, Incorporated, a/k/a Carolina Realty Group, Incorporated, Defendants–Appellants, and Lancaster Resort Rentals and Sales, Incorporated; Ingram Thompson & Associates, Incorporated, Defendants. United States of America, Amicus Supporting Appellees. Thomas Boland, on behalf of himself and others similarly situated, Plaintiff–Appellee, v. Consolidated Multiple Listings Service, Incorporated; The Mungo Company, Incorporated; Sandion, d/b/a Coldwell Banker United, Realtors, a Texas general partnership; Bollin Ligon Walker Realtors, PA; Russell & Jeffcoat Realtors, Incorporated; LDG, Incorporated, d/b/a RE–MAX Metro Associates; DTBCR Holdings, Incorporated, f/k/a Bob Capes Realty, Incorporated; The Advantage Group, Incorporated; Landmark Resources LLC, Defendants–Appellants, and John Does, 1–8, Defendant. United States of America, Amicus Supporting Appellee. Albert Robertson; Frances Robertson; William J. Garrity; Garrity Ventures, LLC, on behalf of themselves and all others similarly situated, Plaintiffs–Appellees, v. Sea Pines Real Estate Companies, Incorporated, a/k/a The Sea Pines Real Estate Company; Coastal Homes and Land, Incorporated, a/k/a Coastal Homes & Land Realty; Collins Group Realty, Incorporated; Engard Rental Company, LLC, a/k/a Engard Real Estate Company; Bruce A. Goff, Incorporated; Daufuskie Island Resort Realty, LLC; Searchlight Realty, Incorporated, a/k/a Searchlight Realty; Gateway Realty, LLC; Hilton Head Luxury Properties, Incorporated, a/k/a Prudential Premier Island Properties; Charter 1 Realty & Marketing; The William Hilton Company, a/k/a William F. Hilton Realty; EG Robinson III And Associates Realtors, Incorporated, a/k/a EG Robinson Real Estate; Gina Scott Realty; Lancaster Resort Rentals And Sales, Incorporated, a/k/a Lancaster Resort Sales; Ingram Thompson & Associates, Incorporated; Julie Toon Pawley Real Estate Broker, Incorporated; CRG Properties, Incorporated, a/k/a Carolina Realty Group, Incorporated, Defendants–Appellees. United States of America, Amicus Supporting Appellees. Thomas Boland, on behalf of himself and others similarly situated, Plaintiff–Appellee, v. Consolidated Multiple Listings Service, Incorporated; Landmark Resources LLC; The Mungo Company, Incorporated; LDG, Incorporated, a/k/a RE–MAX Metro Associates; DTBCR Holdings, Incorporated, f/k/a Bob Capes Realty, Incorporated; Sandion, d/b/a Coldwell Bankers United Realtors, a Texas general partnership; The Advantage Group, Incorporated; Bollin Ligon Walker Realtors, PA; Russell & Jeffcoat Realtors, Incorporated, Defendants–Appellees. United States of America, Amicus Supporting Appellant.
• Court: U.S. Court of Appeals — Fourth Circuit

679 F.3d 278

Albert ROBERTSON; Frances Robertson; William J. Garrity; Garrity Ventures, LLC, on behalf of themselves and all others similarly situated, Plaintiffs–Appellees,

v.SEA PINES REAL ESTATE COMPANIES, INCORPORATED, a/k/a The Sea Pines Real Estate Company; Coastal Homes and Land, Incorporated, a/k/a Coastal Homes & Land Realty; Collins Group Realty, Incorporated; Engard Rental Company, LLC, a/k/a Engard Real Estate Company; Bruce A. Goff, Incorporated; Daufuskie Island Resort Realty, LLC; Searchlight Realty, Incorporated, a/k/a Searchlight Realty; Gateway Realty, LLC; Hilton Head Luxury Properties, Incorporated, a/k/a Prudential Premier Island Properties; Charter 1 Realty & Marketing; The William Hilton Company, a/k/a William F. Hilton Realty; EG Robinson III and Associates Realtors, Incorporated, a/k/a EG Robinson Real Estate; Gina Scott Realty; Julie Toon Pawley Real Estate Broker, Incorporated; CRG Properties, Incorporated, a/k/a Carolina Realty Group, Incorporated, Defendants–Appellants,andLancaster Resort Rentals and Sales, Incorporated; Ingram Thompson & Associates, Incorporated, Defendants.

United States of America, Amicus Supporting Appellees.

Thomas Boland, on behalf of himself and others similarly situated, Plaintiff–Appellee,

v.Consolidated Multiple Listings Service, Incorporated; The Mungo Company, Incorporated; Sandion, d/b/a Coldwell Banker United, Realtors, a Texas general partnership; Bollin Ligon Walker Realtors, PA; Russell & Jeffcoat Realtors, Incorporated; LDG, Incorporated, d/b/a RE–MAX Metro Associates; DTBCR Holdings, Incorporated, f/k/a Bob Capes Realty, Incorporated; The Advantage Group, Incorporated; Landmark Resources LLC, Defendants–Appellants,andJohn Does, 1–8, Defendant.

United States of America, Amicus Supporting Appellee.

Albert Robertson; Frances Robertson; William J. Garrity; Garrity Ventures, LLC, on behalf of themselves and all others similarly situated, Plaintiffs–Appellees,

v.Sea Pines Real Estate Companies, Incorporated, a/k/a The Sea Pines Real Estate Company; Coastal Homes and Land, Incorporated, a/k/a Coastal Homes & Land Realty; Collins Group Realty, Incorporated; Engard Rental Company, LLC, a/k/a Engard Real Estate Company; Bruce A. Goff, Incorporated; Daufuskie Island Resort Realty, LLC; Searchlight Realty, Incorporated, a/k/a Searchlight Realty; Gateway Realty, LLC; Hilton Head Luxury Properties, Incorporated, a/k/a Prudential Premier Island Properties; Charter 1 Realty & Marketing; The William Hilton Company, a/k/a William F. Hilton Realty; EG Robinson III And Associates Realtors, Incorporated, a/k/a EG Robinson Real Estate; Gina Scott Realty; Lancaster Resort Rentals And Sales, Incorporated, a/k/a Lancaster Resort Sales; Ingram Thompson & Associates, Incorporated; Julie Toon Pawley Real Estate Broker, Incorporated; CRG Properties, Incorporated, a/k/a Carolina Realty Group, Incorporated, Defendants–Appellees.

United States of America, Amicus Supporting Appellees.

Thomas Boland, on behalf of himself and others similarly situated, Plaintiff–Appellee,

v.Consolidated Multiple Listings Service, Incorporated; Landmark Resources LLC; The Mungo Company, Incorporated; LDG, Incorporated, a/k/a RE–MAX Metro Associates; DTBCR Holdings, Incorporated, f/k/a Bob Capes Realty, Incorporated; Sandion, d/b/a Coldwell Bankers United Realtors, a Texas general partnership; The Advantage Group, Incorporated; Bollin Ligon Walker Realtors, PA; Russell & Jeffcoat Realtors, Incorporated, Defendants–Appellees.

United States of America, Amicus Supporting Appellant.

Nos. 11–1538, 11–1539, 11–1540, 11–1541.

United States Court of Appeals,Fourth Circuit.

Argued: March 20, 2012.

Decided: May 14, 2012.

ARGUED:Celeste T. Jones, McNair Law Firm, PA, Columbia, South Carolina; Harry Augustus Swagart, III, Columbia, South Carolina, for Appellants/Cross–Appellees. Garrett D. Blanchfield, Jr., Reinhardt Wendorf & Blanchfield, St. Paul, Minnesota; Brian Douglas Penny, Goldman, Scarlato, Karon & Penny, PC, Wayne, Pennsylvania, for Appellees/Cross–Appellants. Nickolai Gilford Levin, United States Department of Justice, Washington, D.C., for Amicus Curiae. ON BRIEF:Jane W. Trinkley, McNair Law Firm, PA, Columbia, South Carolina, for Appellants/Cross–Appellees in No. 11–1538 and No. 11–1540; Edward M. Woodward, Jr., Woodward, Cothran & Herndon, Columbia, South Carolina, Frederick A. Gertz, Gertz & Moore, Columbia, South Carolina, Mason A. Summers, David A. Anderson, Richardson Plowden & Robinson, Columbia, South Carolina for Appellants/Cross–Appellees in No. 11–1539 and No. 11–1541. Jesse A. Kirchner, Matthew E. Yelverton, Thurmond Kirchner Timbes & Yelverton, PA, Charleston, South Carolina; S. Randall Hood, Chad McGowan, McGowan, Hood & Felder, LLC, Rock Hill, South Carolina; John G. Felder, Jr., McGowan, Hood & Felder, LLC, Columbia, South Carolina; Daniel R. Karon, Goldman Scarlato & Karon, PC, Cleveland, Ohio; Grant A. Goodman, Goodman Law Firm, Cleveland, Ohio; Mark Reinhardt, Reinhardt Wendorf & Blanchfield, St. Paul, Minnesota, for Appellees/Cross–Appellants. Sharis A. Pozen, Acting Assistant Attorney General, Catherine G. O'Sullivan, United States Department of Justice, Washington, D.C., for Amicus Curiae.

Before WILKINSON, KING, and AGEE, Circuit Judges.

Affirmed and remanded by published opinion. Judge WILKINSON wrote the opinion, in which Judge KING and Judge AGEE joined.

OPINION

WILKINSON, Circuit Judge:

This case involves two putative class actions, consolidated on interlocutory appeal, brought by purchasers of real estate brokerage services in South Carolina. Each complaint alleges that the real estate brokerages serving as board members of the local multiple listing service conspired to unfairly restrain market competition in violation of § 1 of the Sherman Antitrust Act, 15 U.S.C. § 1. The district court denied the defendants' motions to dismiss the complaints. We affirm and remand for further proceedings.

I.

The two complaints at issue concern allegedly anticompetitive by-laws passed by board members of two different multiple listing services in South Carolina. A multiple listing service (“MLS”) is an incorporated joint venture that, among other things, maintains a database of properties listed for sale in the MLS service area, which its member brokerages use to post and find property listings. An MLS centralizes information within the real estate market it serves, enabling MLS members to communicate with each other to coordinate the sale and purchase of real estate. Particularly in an area served by only one MLS, access to MLS resources may be critical for a brokerage to successfully participate in the relevant real estate market.

The complaints contain nearly identical allegations. In the first complaint (“the Robertson complaint”), plaintiffs identify the putative class as purchasers of real estate brokerage services listed by the defendants on the Multiple Listing Service of Hilton Head Island, Inc. (“HHMLS”). Similarly, in the second complaint (“the Boland complaint”), plaintiffs identify the putative class as purchasers of real estate brokerage services listed by the defendants on the Columbia Consolidated Multiple Listing Service, Inc. (“CMLS”). The Robertson and Boland defendants are identified as licensed real estate brokerages that served, via their employees, on HHMLS's and CMLS's board of trustees, respectively.

The complaints allege that while serving on the relevant MLS boards of trustees, defendants conspired to restrain competition in their respective real estate markets in violation of § 1 of the Sherman Antitrust Act. According to the complaints, defendants used the MLS “as a conduit” to “create[ ] rules that govern [MLS] members' conduct and business practices,” which “inhibit[ed] competition” and “illegally stabilized the prices” paid by plaintiffs as customers of real estate brokerage services. Specifically, the complaints allege that the rules passed by the defendants were designed to exclude innovative, lower-priced competitors and thus insulate the defendants from competitive pressures posed by brokerages that offered a larger menu of service choices and alternative pricing to their customers.

For example, the defendants allegedly prevented members from providing anything less than “the full array of services that brokerages traditionally have provided” and prohibited members from allowing a property seller the option of “avoiding paying the broker a commission if the seller finds the buyer on his or her own.” Both complaints allege that defendants prescribed “subjective standards for admission to membership that allow [MLS] representatives to deny membership to brokerages who they might expect to compete more aggressively or in more innovative ways than [MLS] members, including defendants, would prefer.” According to the complaints, the defendants aimed to exclude lower-priced internet-based brokerages from the MLS by requiring, among other things, that member brokerages maintain a physical office in the MLS service area.

The defendants in each case moved to dismiss the complaints under Rule 12(b)(6) for failure to state a plausible claim for relief. Among other things, the Robertson and Boland defendants argued that the Sherman Act claims warranted dismissal under the intracorporate immunity doctrine for failure to allege an agreement between two or more separate legal entities. The district court denied the motions to dismiss, finding that the complaints alleged an anticompetitive conspiracy sufficient to state a plausible claim for relief under § 1. Relying on American Needle, Inc. v. National Football League, ––– U.S. ––––, 130 S.Ct. 2201, 176 L.Ed.2d 947 (2010), the trial court found that the claims were not barred by the intracorporate immunity doctrine because “the alleged conspiracy joins independent centers of decisionmaking that are capable of conspiring under section 1.”

The district court certified its order for interlocutory review under ...