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From Antitrust Law Daily, December 31, 2013

Dismissal of antitrust counterclaims against real estate multiple listing service not reconsidered

By Jody Coultas, J.D.

American Home Realty Network, Inc. (AHRN) was denied reconsideration of the dismissal of its antitrust and conspiracy counterclaims against Metropolitan Regional Information Systems, Inc.’s (MRIS) by the federal district court in Greenbelt, Maryland (Metropolitan Regional Information Systems, Inc. v. American Home Realty Network, Inc., December 30, 2013, Williams, A.).

AHRN is a real estate brokerage referral service that provides information to home buyers and sellers. AHRN searches the Internet for data on real estate listings and identifies real estate agents most suitable to represent potential buyers and sellers in proposed transactions. MRIS, a multiple listing service (MLS) in the mid-Atlantic region, brought a copyright action against AHRN for copying copyrighted content from the MRIS database and preparing derivative works based that material for its products.

AHRN asserted conspiracy and monopoly counterclaims under the Sherman Act, false advertising counterclaims under the Lanham Act, and unfair competition counterclaims under Maryland and California law against MRIS and the National Association of Realtors (NAR). AHRN alleged that the counterclaim-defendants instigated a program to register and obtain sham compilation copyrights for MLS listings, threatened to and actually enforced those copyrights against AHRN, refused to deal with and refused to license MLS data to AHRN, made false and misleading statements related to their copyrights and concerning AHRN, and passed anticompetitive MLS rules consistent with their goal of driving AHRN and similar innovators out of the market.

The district court held that AHRN sufficiently pleaded counterclaims that NAR and MRIS engaged in anticompetitive conduct aimed at driving AHRN out of the market. However, Noerr-Pennington immunity barred AHRN’s counterclaims to the extent that they were based on the filing and maintenance of the litigation.

AHRN’s motion for reconsideration relied on new evidence that was not previously available and argued that the court erred by parsing the counterclaims and ignoring allegations and evidence of MRIS’s participation in the NAR-led group boycott; rejecting AHRN’s allegations regarding MRIS’s “work for hire” representations to the Copyright Office; and converting MRIS’s motion to dismiss into a motion for summary judgment.

The court found no error in its analysis of the boycott allegations against MRIS. AHRN argued that the counterclaims should have survived MRIS’s motion to dismiss based upon MRIS’s alleged involvement in a NAR-led group boycott. The court reviewed the allegations from the counterclaims as a whole and determined that there was no plausible basis for Sherman Act § 1 or Maryland unfair competition claims against MRIS based on the refusal to deal and group boycott allegations. AHRN presented an e-mail chain in which executives from NAR and various MLSs discussed possible copyright litigation against AHRN. The court could not infer from the e-mails that MRIS supported NAR-led refusals to deal with AHRN or engaged in any conduct or action in furtherance of a boycott of AHRN.

AHRN failed to support its argument that the district court erred in its conclusion regarding MRIS’s “work for hire” representations, according to the court. AHRN alleged that MRIS’s “work for hire” designations in its copyright registrations were false. The court held in the November 1, 2013 order that the argument did not support the Sherman Act or unfair competition claims. In its motion for reconsideration, AHRN argued that the court ignored or parsed the “work for hire” allegations from AHRN’s other allegations of conspiracy, and that it failed to take AHRN’s “work for hire” allegations as true. The court considered the allegations of the counterclaims as a whole and did not view the new allegations, including the “work for hire” allegations, in isolation. AHRN also argued that the court failed to consider its “work for hire” allegations as true. However, courts are only required to accept well-pleaded factual allegations as true and to construe them in a light most favorable to the claimant. The court was not required to accept what boiled down to a legal allegation by AHRN.

The court did not commit clear error by converting MRIS’s motion to dismiss to one for summary judgment, according to the court. AHRN argued that “the ‘CoreLogic issue’ is unidentified as a claim or defense in accordance with Rule 56(a).” The argument was without merit. There was no inconsistency between the November 1 holding and the dictates of Rule 56 and Rule 12(d) of the Federal Rules of Civil Procedure.

The case is No. 12-cv-00954-AW.

Attorneys: Margaret Aldona Esquenet (Finnegan Henderson Farabow Garrett and Dunner LLP) for Metropolitan Regional Information Systems, Inc. Richard Scott Toikka (Farkas + Toikka LLP) for American Home Realty Network, Inc. Jack R Bierig (Sidley Austin LLP) for National Association of Realtors.

Companies: Metropolitan Regional Information Systems, Inc.; American Home Realty Network, Inc.; National Association of Realtors

MainStory: TopStory Antitrust StateUnfairTradePractices MarylandNews

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