ShareAn Illinois federal court has again evaluated antitrust arguments made by a broker against REALTOR® associations and competing brokerages.
Gregory Hackman (“Broker”) was the owner of Gregory Hackman REALTORS® (“Brokerage”). The Broker was a member of the Rockford Area Association of REALTORS® (“RAAR”) and the Illinois Association of REALTORS® (“IAR”).
In 2000, the Broker opened a new office where he charged a lower commission rate than other brokers allegedly used in the market. Because of these lower rates, the Broker claimed that five competing brokerages (collectively, “Competitors”) entered into an agreement to retaliate against him, such as refusing to show his listings and making disparaging comments about his business.
The Broker filed a lawsuit against the Competitors, RAAR, and IAR. The Broker claimed that all of the defendants entered into a conspiracy which harmed his business. He also sought an injunction preventing the REALTOR® associations from holding a hearing on an ethics complaint that RAAR had transferred to IAR for a hearing. The trial court dismissed some of the allegations, and the Broker filed an amended complaint containing similar allegations (click here to read earlier decision). The defendants filed motions with the trial court seeking to dismiss the lawsuit.
The United States District Court for the Northern District of Illinois dismissed a number of the allegations, but allowed a portion of the lawsuit to proceed against the remaining defendants. The court first considered the antitrust allegations against RAAR and its president at the time, Terry Hall (“President”), contained in the first two counts. In order to successfully allege a claim for an antitrust conspiracy under federal law (known as the Sherman Act), a party must: first, demonstrate a contract, combination, or conspiracy; second, a resulting restraint of trade in the marketplace; and finally, injury.
The President and RAAR argued that the Broker had not alleged facts showing there was any sort of agreement between the parties and so had not properly alleged an antitrust conspiracy. The amended complaint also alleged that the President conspired with an IAR representative to assure a negative outcome during the ethics hearing. While the President argued that these allegations were “conclusory”, the court determined that they met the pleading standards used in federal court. Therefore, the court allowed these allegations to proceed. The court did dismiss the “attempt to monopolize the market” allegations against the President and RAAR, since neither the President or the RAAR were competitors of the Broker and so could not be found liable for these allegations.
The second count of the amended complaint contained allegations based on the Illinois antitrust statute. Since the Illinois statute closely mirrors the federal statute, the court repeated its earlier rulings, allowing the conspiracy allegations to proceed but dismissing the monopolization allegations. The Broker also alleged that RAAR and the President violated another section of the Illinois law that prohibits agreements between competitors, but the court rejected this argument because neither the RAAR nor the President were competitors of the Broker.
Counts three and four of the complaint sought injunctive relief against RAAR and IAR, barring them from conducting a professional standards hearing involving allegations against the Broker. The court had dismissed these allegations twice, ruling that the Broker had failed to establish any anticompetitive agreement between the associations regarding the hearing. The court also ruled that because the hearing was now with IAR, RAAR had no involvement in the hearing process. Therefore, the court dismissed these allegations.
Finally, the court considered the tortious interference with a business expectancy made against the President. The Broker alleged that the President had told some of the Broker’s clients to file complaints against him with the state real estate commission in order to get the Broker to release them from their contracts. The Broker alleged that the President knew that the Broker had not engaged in wrongful conduct and this was simply a ploy to get the Broker to release his clients rather than fight the complaint. The court found the Broker had properly pled these allegations and so allowed these allegations to proceed.
Hackman v. Dickerson REALTORS , Inc., NO. 06 C 50240, 2009 WL 180270 (N. D. Ill. Jan. 23, 2009). [This is a citation to a Westlaw document. Westlaw is a subscription, online legal research service. If an official reporter citation should become available for this case, the citation will be updated to reflect this information].