Hackman v. Dickerson REALTORS®, Inc.: Illinois Antitrust Lawsuit Dismissed Entirely

An Illinois federal court has considered whether the final defendants in a long-running antitrust case were entitled to judgment.

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. In an earlier decision, the trial court dismissed IAR and RAAR from the lawsuit as well as some of the broker defendants. (click here to read earlier decisions). The remaining defendants filed motions with the trial court seeking judgment in their favor.

The United States District Court for the Northern District of Illinois ruled in favor of the remaining defendants and dismissed the lawsuit. The only remaining defendants were the Competitors.

The court looked at whether the remaining evidence supported the antitrust allegations. First, the court ruled that there was no evidence to support the alleged violations of Section 2 of the Sherman Act, the federal antitrust statute. Section 2 makes it illegal to “monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize interstate commerce.” In order to succeed on a Section 2 allegation, you must show, among other things, proof that the alleged monopoly had a substantial effect upon interstate commerce and a specific intent to monopolize by the defendants. Since there was no evidence that the defendants had anything close to monopoly power, the court dismissed the Section 2 allegations.

The court turned to Section 1 allegations. In order to succeed in Section 1 claim, a party must show a contract, combination, or conspiracy that creates an unreasonable restraint of trade, causing harm to another party. The Broker claimed that there was a conspiracy among the defendants to “ruin” him by boycotting his firm, citing various examples of conduct by each defendant.

The court also found the evidence did not support the Broker’s Section 1 allegations. First, the sales of the Broker’s properties by one of the larger brokers as well as sales by the Broker of the larger broker’s properties increased every year during the alleged conspiracy. Second, the court found that an announced four-day boycott of the Broker by a competitor was a policy announced by one person in the firm, and the alleged boycott scheme was quickly put to a stop when senior management learned about the plan. Finally, the court found one MLS participant sending the Broker a letter stating that the Broker would receive a smaller commission split from his transaction did not evidence a conspiracy, since the letter was never enforced and also was permitted by the MLS rules. The court found that the evidence did not support the group boycott theory advanced by the Broker and so ruled in favor of the defendants.

The court also rejected the Broker’s other arguments for defamation and tortious interference with a contract. Two of the alleged defamatory statements were made by third parties with little substantiation and the third was an ethics complaint filed against the Broker. The court found that the ethics complaint was filed in good faith and it was unclear whether the other two statements ever occurred or even harmed the Broker. Similarly, there was no evidence that the Broker lost any clients from the alleged tortious interference allegations, and so there was no harm even if the allegations were true. Therefore, the court entered judgment in favor of the remaining defendants, ending the Broker’s lawsuit.

Hackman v. Dickerson REALTORS , Inc., 595 F.Supp.2d 875,(N. D. Ill. 2009).

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