Antitrust Law Daily Wrap Up, ANTITRUST—D. Md.: Realtor association not entitled to sanctions for monopolization, conspiracy counterclaims, (Mar 18, 2015)

By Greg Hammond, J.D.

The National Association of Realtors (NAR) was denied sanctions against American Home Realty Network, Inc., for antitrust counterclaims that allegedly lacked factual basis. The federal district court in Greenbelt, Maryland determined that it was not apparent that a reasonable attorney in American Home’s position could not have believed his actions to be legally justified (Metropolitan Regional Information Systems, Inc. v. American Home Realty Network, Inc., March 17, 2015, Chasanow, D.).

Background. Metropolitan Regional Information Systems, Inc. filed a copyright infringement suit against American Home for taking listing data from online database compilers, like Metropolitan’s multiple listing service (MLS), and making it directly available to consumers on its “real estate referral” website. Specifically, Metropolitan asserted that American Home displayed real estate listings containing copyrighted photographs taken from MLS. American Home filed counterclaims against Metropolitan and NAR. However, the only two remaining counterclaims against NAR were for: (1) unfair competition in violation of Maryland law; and (2) violation of Section 1 of the Sherman Act. NAR moved for sanctions, and counsel for American Home moved to withdraw as attorneys.

Sanctions. In support of its motion, NAR argued that the allegations contained in American Home’s second amended counterclaims were without factual basis and should therefore be stricken, and American Home and its counsel should be ordered to pay all fees incurred by NAR.

American Home’s counterclaims alleged that NAR encouraged regional boards of realtors to: (1) step up efforts to keep member agents from entering into referral agreements with American Home; (2) breach or repudiate referral agreements agents have entered with American Home; and (3) pressure agents into demanding that their names be stricken from American Home’s list of potential referral agents. However, the court found that other testimony, affidavits, and transcripts of phone conversations created at least some factual basis for the challenged allegations. The court noted that different impressions of telephone conversations do not establish that American Home had no factual basis for the allegations in its counterclaims. Further, weak evidentiary basis for certain allegations is not the same as no evidentiary basis, and the record did not reflect that the allegations in the counterclaims were frivolously asserted or lacked any evidentiary support. The motion for sanctions was consequently denied.

Withdrawal. The two law firms that represent American Home also moved to withdraw as counsel. However, because American Home is required to be represented by counsel during the pendency of the action and the summary judgment motion had not yet been adjudicated, both motions to withdraw were denied without prejudice to reconsideration if necessary after the court decides the motion for summary judgment.

The case number is DKC 12-0954.

Attorneys: Don O. Burley (Finnegan Henderson 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

Cases: Antitrust MarylandNews