THE PLS.COM, LLC V. NAR, No. 21-55164 (9th Cir. 2022)
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Plaintiff challenged the National Association of Realtors’ ("NAR") Clear Cooperation Policy, which required members of a NAR-affiliated multiple listing service who chose to list properties on the Plaintiff’s real estate database also to list those properties on an MLS. The district court dismissed on the ground that Plaintiff did not, and could not, adequately allege antitrust injury under Section 1 of the Sherman Act or California’s Cartwright Act because it did not allege harm to home buyers and sellers.
The Ninth Circuit reversed the district court’s dismissal of an action brought by Plaintiff alleging that its competitors in the real estate network services market violated antitrust laws because they conspired to take anti-competitive measures to prevent Plaintiffs from gaining a foothold in the market. The court held that Plaintiff adequately alleged a violation of Sherman Act Section 1, which prohibits a contract, combination, or conspiracy that unreasonably restrains trade. The court held that Plaintiff adequately alleged that the Clear Cooperation Policy was an unreasonable restraint of trade because it was a per se group boycott, but the court left it to the district court to determine in the first instance whether it should apply per se or rule of reason analysis at later stages in the litigation.
Court Description: Antitrust. The panel reversed the district court’s dismissal of an action brought by The PLS.com, LLC, alleging that its competitors in the real estate network services market violated antitrust laws because they conspired to take anticompetitive measures to prevent PLS from gaining a foothold in the market, and remanded for further proceedings. PLS challenged the National Association of Realtors’ Clear Cooperation Policy, which required members of an NAR-affiliated multiple listing service who chose to list properties on the PLS real estate database also to list those properties on an MLS. The district court dismissed on the ground that PLS did not, and could not, adequately allege antitrust injury under § 1 of the Sherman Act or California’s Cartwright Act because it did not allege harm to home buyers and sellers. A competitor has standing to assert a Sherman Act claim only when the claimed injury flows from acts harmful to consumers. The panel held that the definition of the term consumer is not limited to one who buys goods or services for personal, family, or household use, with no intention of resale. Rather, a business that uses a product as an input to create another product or service is a consumer of that input for antitrust purposes and can allege antitrust injury. Accordingly, PLS was not required to allege harm to home PLS.COM V. NAT’L ASS’N OF REALTORS 3 buyers and sellers to allege antitrust injury, and its allegation that the Clear Cooperation Policy harmed buyers’ and sellers’ real estate agents, the consumers of PLS’s and the MLSs’ listing network services, could suffice. To allege antitrust injury, PLS was required to allege unlawful conduct, causing injury to PLS, that flowed from that which made the conduct unlawful, and that was of the type that the antitrust laws were intended to prevent. Without a violation of the antitrust laws, there can be no antitrust injury. The panel held that PLS adequately alleged a violation of Sherman Act § 1, which prohibits a contract, combination, or conspiracy that unreasonably restrains trade. The panel held that PLS adequately alleged that the Clear Cooperation Policy was an unreasonable restraint of trade because it was a per se group boycott, but the panel left to the district court to determine in the first instance whether it should apply per se or rule of reason analysis at later stages in the litigation. The panel held that PLS satisfied Ohio v. Am. Express Co., 138 S. Ct. 2274 (2018) (Amex), which requires a plaintiff to define the relevant market to include both sides of the market in certain circumstances. The panel held that Amex can apply at the pleading stage, and that because PLS satisfied Amex by alleging injury to both sellers’ agents and buyers’ agents, the panel need not resolve the more difficult questions the parties raised about how broadly Amex applies. The panel concluded that PLS adequately alleged antitrust injury by alleging a group boycott in which the Clear Cooperation Policy prevented PLS from gaining a foothold in the market and made it virtually impossible for new competitors to enter the market, leaving agents with fewer choices, supra-competitive prices, and lower quality products. 4 PLS.COM V. NAT’L ASS’N OF REALTORS The panel held that it had jurisdiction to consider whether PLS adequately alleged that defendant Midwest Real Estate Date, LLC (“MRED”) was involved in the alleged conspiracy. At the time of PLS’s appeal, Federal Rule of Appellate Procedure 3(c)(1)(B) required a party to “designate” in its notice of appeal “the judgment, order, or part thereof being appealed.” PLS’s notice of appeal identified the object of its appeal as Subsection 1 of the district court’s dismissal order, addressing antitrust injury, but PLS’s opening brief also challenged Subsection 3 of the order, addressing whether PLS adequately alleged that MRED was part of the conspiracy. The panel held that it had jurisdiction to review Subsection 3 because PLS’s intent to appeal Subsection 3 could be fairly inferred from its opening brief, and defendants were not prejudiced because they fully briefed the issue. The panel further held that PLS adequately alleged that MRED was involved in the conspiracy by alleging a conscious commitment to a common scheme designed to achieve an unlawful objective.
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