Robertson v. SEA PINES REAL ESTATE COMPANIES, INC.

PUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

ALBERT ROBERTSON; FRANCES 

ROBERTSON; WILLIAM J. GARRITY;

GARRITY VENTURES, LLC, on

behalf of themselves and all others

similarly situated,

Plaintiffs-Appellees,

v.

SEA PINES REAL ESTATE COMPANIES,

INCORPORATED, a/k/a The Sea Pines

Real Estate Company; COASTAL

HOMES AND LAND, INCORPORATED,

a/k/a Coastal Homes & Land  No. 11-1538

Realty; COLLINS GROUP REALTY,

INCORPORATED; ENGARD RENTAL

COMPANY, LLC, a/k/a Engard Real

Estate Company; BRUCE A. GOFF,

INCORPORATED; DAUFUSKIE ISLAND

RESORT REALTY, LLC; SEARCHLIGHT

REALTY, INCORPORATED, a/k/a

Searchlight Realty; GATEWAY

REALTY, LLC; HILTON HEAD

LUXURY PROPERTIES, INCORPORATED,

a/k/a Prudential Premier Island

Properties;



2 ROBERTSON v. SEA PINES REAL ESTATE

CHARTER 1 REALTY & MARKETING; 

THE WILLIAM HILTON COMPANY,

a/k/a William F. Hilton Realty;

EG ROBINSON III AND ASSOCIATES

REALTORS, INCORPORATED, a/k/a EG

Robinson Real Estate; GINA SCOTT

REALTY; JULIE TOON PAWLEY REAL

ESTATE BROKER, INCORPORATED;

CRG PROPERTIES, INCORPORATED,

a/k/a Carolina Realty Group,

Incorporated,

Defendants-Appellants, 

and

LANCASTER RESORT RENTALS AND

SALES, INCORPORATED; INGRAM

THOMPSON & ASSOCIATES,

INCORPORATED,

Defendants.

UNITED STATES OF AMERICA,

Amicus Supporting Appellees.



ROBERTSON v. SEA PINES REAL ESTATE 3

THOMAS BOLAND, on behalf of 

himself and others similarly

situated,

Plaintiff-Appellee,

v.

CONSOLIDATED MULTIPLE LISTINGS

SERVICE, INCORPORATED; THE

MUNGO COMPANY, INCORPORATED;

SANDION, d/b/a Coldwell Banker

United, Realtors, a Texas general

partnership; BOLLIN LIGON WALKER

REALTORS, PA; RUSSELL &

JEFFCOAT REALTORS, INCORPORATED;

LDG, INCORPORATED, d/b/a RE-

MAX Metro Associates; DTBCR

 No. 11-1539

HOLDINGS, INCORPORATED, f/k/a Bob

Capes Realty, Incorporated; THE

ADVANTAGE GROUP, INCORPORATED;

LANDMARK RESOURCES LLC,

Defendants-Appellants,

and

JOHN DOES, 1-8,

Defendant.

UNITED STATES OF AMERICA,

Amicus Supporting Appellee.



4 ROBERTSON v. SEA PINES REAL ESTATE

ALBERT ROBERTSON; FRANCES 

ROBERTSON; WILLIAM J. GARRITY;

GARRITY VENTURES, LLC, on

behalf of themselves and all others

similarly situated,

Plaintiffs-Appellants,

v.

SEA PINES REAL ESTATE COMPANIES,

INCORPORATED, a/k/a The Sea Pines

Real Estate Company; COASTAL

HOMES AND LAND, INCORPORATED,

a/k/a Coastal Homes & Land

Realty; COLLINS GROUP REALTY,

INCORPORATED; ENGARD RENTAL

COMPANY, LLC, a/k/a Engard Real  No. 11-1540

Estate Company; BRUCE A. GOFF,

INCORPORATED; DAUFUSKIE ISLAND

RESORT REALTY, LLC; SEARCHLIGHT

REALTY, INCORPORATED, a/k/a

Searchlight Realty; GATEWAY

REALTY, LLC; HILTON HEAD

LUXURY PROPERTIES, INCORPORATED,

a/k/a Prudential Premier Island

Properties; CHARTER 1 REALTY &

MARKETING; THE WILLIAM HILTON

COMPANY, a/k/a William F. Hilton

Realty; EG ROBINSON III AND

ASSOCIATES REALTORS,

INCORPORATED, a/k/a EG Robinson

Real Estate; GINA SCOTT REALTY;



ROBERTSON v. SEA PINES REAL ESTATE 5

LANCASTER RESORT RENTALS AND 

SALES, INCORPORATED, a/k/a

Lancaster Resort Sales; INGRAM

THOMPSON & ASSOCIATES,

INCORPORATED; JULIE TOON PAWLEY

REAL ESTATE BROKER,



INCORPORATED; CRG PROPERTIES,

INCORPORATED, a/k/a Carolina

Realty Group, Incorporated,

Defendants-Appellees.

UNITED STATES OF AMERICA,

Amicus Supporting Appellants.



THOMAS BOLAND, on behalf of 

himself and others similarly

situated,

Plaintiff-Appellant,

v.

CONSOLIDATED MULTIPLE LISTINGS

SERVICE, INCORPORATED; LANDMARK  No. 11-1541

RESOURCES LLC; THE MUNGO

COMPANY, INCORPORATED; LDG,

INCORPORATED, a/k/a RE-MAX

Metro Associates; DTBCR

HOLDINGS, INCORPORATED, f/k/a Bob

Capes Realty, Incorporated;



6 ROBERTSON v. SEA PINES REAL ESTATE

SANDION, d/b/a Coldwell Bankers 

United Realtors, a Texas general

partnership; THE ADVANTAGE

GROUP, INCORPORATED; BOLLIN

LIGON WALKER REALTORS, PA;



RUSSELL & JEFFCOAT REALTORS,

INCORPORATED,

Defendants-Appellees.

UNITED STATES OF AMERICA,

Amicus Supporting Appellant.



Appeals from the United States District Court

for the District of South Carolina,

at Beaufort and Columbia.

Sol Blatt, Jr., Senior District Judge.

(9:10-cv-00095-SB; 3:09-cv-01335-SB; 9:10-cv-00095-SB;

3:09-cv-01335-SB)

Argued: March 20, 2012

Decided: May 14, 2012

Before WILKINSON, KING, and AGEE, Circuit Judges.

Affirmed and remanded by published opinion. Judge Wilkin-

son wrote the opinion, in which Judge King and Judge Agee

joined.

ROBERTSON v. SEA PINES REAL ESTATE 7

COUNSEL

ARGUED: Celeste T. Jones, MCNAIR LAW FIRM, PA,

Columbia, South Carolina; Harry Augustus Swagart, III,

Columbia, South Carolina, for Appellants/Cross-Appellees.

Garrett D. Blanchfield, Jr., REINHARDT WENDORF &

BLANCHFIELD, St. Paul, Minnesota; Brian Douglas Penny,

GOLDMAN, SCARLATO, KARON & PENNY, PC, Wayne,

Pennsylvania, for Appellees/Cross-Appellants. Nickolai Gil-

ford Levin, UNITED STATES DEPARTMENT OF JUS-

TICE, Washington, D.C., for Amicus Curiae. ON BRIEF:

Jane W. Trinkley, MCNAIR LAW FIRM, PA, Columbia,

South Carolina, for Appellants/Cross-Appellees in No. 11-

1538 and No. 11-1540; Edward M. Woodward, Jr., WOOD-

WARD, COTHRAN & HERNDON, Columbia, South Caro-

lina, Frederick A. Gertz, GERTZ & MOORE, Columbia,

South Carolina, Mason A. Summers, David A. Anderson,

RICHARDSON PLOWDEN & ROBINSON, Columbia,

South Carolina for Appellants/Cross-Appellees in No. 11-

1539 and No. 11-1541. Jesse A. Kirchner, Matthew E.

Yelverton, THURMOND KIRCHNER TIMBES &

YELVERTON, PA, Charleston, South Carolina; S. Randall

Hood, Chad McGowan, MCGOWAN, HOOD & FELDER,

LLC, Rock Hill, South Carolina; John G. Felder, Jr., MCGO-

WAN, HOOD & FELDER, LLC, Columbia, South Carolina;

Daniel R. Karon, GOLDMAN SCARLATO & KARON, PC,

Cleveland, Ohio; Grant A. Goodman, GOODMAN LAW

FIRM, Cleveland, Ohio; Mark Reinhardt, REINHARDT

WENDORF & BLANCHFIELD, St. Paul, Minnesota, for

Appellees/Cross-Appellants. Sharis A. Pozen, Acting Assis-

tant Attorney General, Catherine G. O’Sullivan, UNITED

STATES DEPARTMENT OF JUSTICE, Washington, D.C.,

for Amicus Curiae.

8 ROBERTSON v. SEA PINES REAL ESTATE

OPINION

WILKINSON, Circuit Judge:

This case involves two putative class actions, consolidated

on interlocutory appeal, brought by purchasers of real estate

brokerage services in South Carolina. Each complaint alleges

that the real estate brokerages serving as board members of

the local multiple listing service conspired to unfairly restrain

market competition in violation of § 1 of the Sherman Anti-

trust Act, 15 U.S.C. § 1. The district court denied the defen-

dants’ motions to dismiss the complaints. We affirm and

remand for further proceedings.

I.

The two complaints at issue concern allegedly anticompeti-

tive by-laws passed by board members of two different multi-

ple listing services in South Carolina. A multiple listing

service ("MLS") is an incorporated joint venture that, among

other things, maintains a database of properties listed for sale

in the MLS service area, which its member brokerages use to

post and find property listings. An MLS centralizes informa-

tion within the real estate market it serves, enabling MLS

members to communicate with each other to coordinate the

sale and purchase of real estate. Particularly in an area served

by only one MLS, access to MLS resources may be critical

for a brokerage to successfully participate in the relevant real

estate market.

The complaints contain nearly identical allegations. In the

first complaint ("the Robertson complaint"), plaintiffs identify

the putative class as purchasers of real estate brokerage ser-

vices listed by the defendants on the Multiple Listing Service

of Hilton Head Island, Inc. ("HHMLS"). Similarly, in the sec-

ond complaint ("the Boland complaint"), plaintiffs identify

the putative class as purchasers of real estate brokerage ser-

vices listed by the defendants on the Columbia Consolidated

ROBERTSON v. SEA PINES REAL ESTATE 9

Multiple Listing Service, Inc. ("CMLS"). The Robertson and

Boland defendants are identified as licensed real estate bro-

kerages that served, via their employees, on HHMLS’s and

CMLS’s board of trustees, respectively.

The complaints allege that while serving on the relevant

MLS boards of trustees, defendants conspired to restrain com-

petition in their respective real estate markets in violation of

§ 1 of the Sherman Antitrust Act. According to the com-

plaints, defendants used the MLS "as a conduit" to "create[ ]

rules that govern [MLS] members’ conduct and business prac-

tices," which "inhibit[ed] competition" and "illegally stabi-

lized the prices" paid by plaintiffs as customers of real estate

brokerage services. Specifically, the complaints allege that the

rules passed by the defendants were designed to exclude inno-

vative, lower-priced competitors and thus insulate the defen-

dants from competitive pressures posed by brokerages that

offered a larger menu of service choices and alternative pric-

ing to their customers.

For example, the defendants allegedly prevented members

from providing anything less than "the full array of services

that brokerages traditionally have provided" and prohibited

members from allowing a property seller the option of "avoid-

ing paying the broker a commission if the seller finds the

buyer on his or her own." Both complaints allege that defen-

dants prescribed "subjective standards for admission to mem-

bership that allow [MLS] representatives to deny membership

to brokerages who they might expect to compete more aggres-

sively or in more innovative ways than [MLS] members,

including defendants, would prefer." According to the com-

plaints, the defendants aimed to exclude lower-priced

internet-based brokerages from the MLS by requiring, among

other things, that member brokerages maintain a physical

office in the MLS service area.

The defendants in each case moved to dismiss the com-

plaints under Rule 12(b)(6) for failure to state a plausible

10 ROBERTSON v. SEA PINES REAL ESTATE

claim for relief. Among other things, the Robertson and

Boland defendants argued that the Sherman Act claims war-

ranted dismissal under the intracorporate immunity doctrine

for failure to allege an agreement between two or more sepa-

rate legal entities. The district court denied the motions to dis-

miss, finding that the complaints alleged an anticompetitive

conspiracy sufficient to state a plausible claim for relief under

§ 1. Relying on American Needle, Inc. v. National Football

League, 130 S. Ct. 2201 (2010), the trial court found that the

claims were not barred by the intracorporate immunity doc-

trine because "the alleged conspiracy joins independent cen-

ters of decisionmaking that are capable of conspiring under

section 1."

The district court certified its order for interlocutory review

under 28 U.S.C. § 1292(b) and this court granted defendants’

petition for permission to appeal. Appellants renew their

objections to the sufficiency of the Robertson and Boland

complaints and we shall address their claims in turn. We

review de novo the district court’s denial of the Rule 12(b)(6)

motions to dismiss. See Anita’s N.M. Style Mexican Food,

Inc. v. Anita’s Mexican Foods Corp., 201 F.3d 314, 319 (4th

Cir. 2000). Like the district court, we must take the com-

plaints’ factual allegations as true and draw all reasonable

inferences in plaintiffs’ favor. See E.I. du Pont de Nemours &

Co. v. Kolon Indus., 637 F.3d 435, 440 (4th Cir. 2011).

II.

Section one of the Sherman Antitrust Act prohibits "[e]very

contract, combination . . ., or conspiracy, in restraint of trade."

15 U.S.C. § 1. To establish a § 1 antitrust violation, a plaintiff

must prove, and therefore plead, "(1) a contract, combination,

or conspiracy; (2) that imposed an unreasonable restraint of

trade." Dickson v. Microsoft Corp., 309 F.3d 193, 202 (4th

Cir. 2002).

At this stage of the litigation, our task is limited. We are not

asked to consider whether defendants actually violated § 1,

ROBERTSON v. SEA PINES REAL ESTATE 11

but to determine whether the complaints state "a plausible

claim for relief [to] survive[ ] a motion to dismiss." Ashcroft

v. Iqbal, 556 U.S. 662, 679 (2009). We must first inquire

therefore whether these pleadings state a § 1 claim against

defendants for their decisionmaking as MLS board members

-– to wit, whether defendants constituted separate economic

actors capable of conspiring for purposes of § 1. See Oksanen

v. Page Mem’l Hosp., 945 F.2d 696, 699 (4th Cir. 1991) (en

banc). Appellants contend that plaintiffs failed to allege the

plurality of legal entities necessary for a Sherman Act viola-

tion. They argue that the individual brokerages acted only in

their capacities as MLS board members and that everything

that may have happened here reflects nothing more than the

independent actions of a single corporate entity, namely the

MLS itself.

For the reasons that follow, we disagree.

A.

The Sherman Antitrust Act "was designed to be a compre-

hensive charter of economic liberty aimed at preserving free

and unfettered competition as the rule of trade." N. Pac. Ry.

Co. v. United States, 356 U.S. 1, 4 (1958). Section two of the

Sherman Antitrust Act proscribes both concerted and inde-

pendent actions that monopolize trade. See 15 U.S.C. § 2. But

section one’s prohibition against restraint of trade applies

"only to concerted action," American Needle, 130 S. Ct. at

2208, which "requires evidence of a relationship between at

least two legally distinct persons or entities," Oksanen, 945

F.2d at 702. Concerted activity is of special concern because

it "inherently is fraught with anticompetitive risk" and "de-

prives the marketplace of the independent centers of decision-

making that competition assumes and demands." Copperweld

Corp. v. Independence Tube Corp., 467 U.S. 752, 768-69

(1984).

Two Supreme Court cases, Copperweld and American Nee-

dle, have set forth the criteria for concerted action and guide

12 ROBERTSON v. SEA PINES REAL ESTATE

our analysis of defendants’ conduct. Copperweld held that

"officers or employees of the same firm do not provide the

plurality of actors imperative for a § 1 conspiracy" as "inter-

nal ‘agreement’ to implement a single, unitary firm’s policies

does not raise the antitrust dangers that § 1 was designed to

police." 467 U.S. at 769. In American Needle, the Court

applied Copperweld to the conduct of members of an incorpo-

rated joint venture. Specifically, the Court recognized that

"[a]greements made within a firm can constitute concerted

action covered by § 1 when the parties to the agreement act

on interests separate from those of the firm itself, and the

intrafirm agreements may simply be a formalistic shell for

ongoing concerted action." 130 S. Ct. at 2215 (footnote omit-

ted).

The American Needle Court explained that "concerted

action under § 1 does not turn simply on whether the parties

involved are legally distinct entities." Id. at 2209. Rather,

"substance, not form, should determine whether a[n] . . .

entity is capable of conspiring under § 1." Id. at 2211 (quoting

Copperweld, 467 U.S. at 773 n.21). It is thus not dispositive

if defendants organize themselves "under a single umbrella or

into a structured joint venture." Id. at 2212. The relevant func-

tional inquiry is whether there is a conspiracy between "‘sepa-

rate economic actors pursuing separate economic interests,’

such that the agreement ‘deprives the marketplace of indepen-

dent centers of decisionmaking.’" Id. (quoting Copperweld,

467 U.S. at 769) (citation omitted).

Applying this analysis, the Court in American Needle held

that the licensing activities of National Football League Prop-

erties ("NFLP")—a corporate joint venture formed by the

thirty-two National Football League teams to manage their

intellectual property—constituted concerted action within the

meaning of § 1. The Court concluded that "[a]lthough NFL

teams have common interests such as promoting the NFL

brand, they are still separate, profit-maximizing entities, and

their interests in licensing team trademarks are not necessarily

ROBERTSON v. SEA PINES REAL ESTATE 13

aligned." Id. at 2213. Therefore, "[t]hirty-two teams operating

independently through the vehicle of the NFLP are not like

the components of a single firm that act to maximize the

firm’s profits. The teams remain separately controlled, poten-

tial competitors with economic interests that are distinct from

NFLP’s financial well-being." Id. at 2215. As a result, the

Court held that the NFL teams and NFLP were appropriately

subject to suit under § 1 for NFLP’s licensing activities.

Appellants contend that the MLS rules at issue here are the

product of independent action by agents of a single corpora-

tion. But the nature of defendants’ alleged participation in the

MLS joint venture fits squarely within American Needle’s

definition of concerted conduct. Taking the factual claims in

the complaints as true, the competitive relationship between

the individual brokerages resembles that between the NFL

teams. The MLS is comprised of individual real estate broker-

ages that are separately incorporated and that compete with

each other in the sale and purchase of real estate. Like the

NFL teams, each brokerage "is a substantial, independently

owned, and independently managed business" that is "guided

. . . [by a] ‘separate corporate consciousness[ ]." Id. at 2212

(quoting Copperweld, 467 U.S. at 771). And therefore, like

the NFL teams, the individual brokerages lack a "complete

unity of interest" and "do not possess either the unitary deci-

sionmaking quality or the single aggregation of economic

power characteristic of independent action." Id.

The gravamen of the complaints here is that the brokerages

colluded to use the MLS corporate vehicle to exclude lower

cost brokerages from competing in the relevant real estate

market and to stabilize prices within that market. The MLS

enabled the individual brokerages to make collective deci-

sions about pricing and services that they otherwise would

have made independently. As in American Needle, this

alleged collective action among potential competitors "depriv-

[ed] the marketplace of independent centers of decisionmak-

ing." Id. at 2213. Although appellants stress that the

14 ROBERTSON v. SEA PINES REAL ESTATE

defendants passed the MLS by-laws in their capacity as MLS

board members, the relevant question is whether defendants

acted "on interests separate from those of the firm itself." Id.

at 2215. And it is clear that defendants’ alleged efforts to

exclude innovative competitors conflicted with the economic

interest of the MLS to admit additional dues-paying members

and to expand its database of property listings.

We emphasize, however, that even if some of the rules in

question did happen to serve the interest of the MLS, this

would not necessarily place defendants’ conduct outside the

scope of § 1. As the Court in American Needle noted, the NFL

teams’ economic interests "‘will often coincide with those of

the’ NFLP ‘as an entity in itself, [but] that commonality of

interest exists in every cartel.’" Id. (citation omitted) (empha-

sis omitted). What matters is that, according to the allegations,

the defendants remained "separately controlled, potential

competitors with economic interests that [were] distinct from

[the MLS’s] financial well-being." Id.1

Our holding that § 1 applies is not meant to discredit the

salutary economic function that an MLS may perform. An

MLS may bring significant advantages to the market by, for

example, dismantling "information and communication barri-

ers" and easing "the built-in geographical barrier confronting

the buyer-seller relationship." Arthur D. Austin, Real Estate

Boards and Multiple Listing Systems as Restraints of Trade,

70 Colum. L. Rev. 1325, 1329 (1970). The joint venture thus

provides a buyer with a "wider selection of purchase opportu-

1

The Boland complaint also includes the CMLS as a defendant. Because

the CMLS was allegedly used as an instrumentality of the individual bro-

kerages, § 1 likewise applies to the CMLS with respect to the conduct at

issue. See id. at 2214 ("[W]e think it clear that for the same reasons the

32 teams’ conduct is covered by § 1, NFLP’s actions also are subject to

§ 1, at least with regards to its marketing of property owned by the sepa-

rate teams. NFLP’s licensing decisions are made by the 32 potential com-

petitors, and each of them actually owns its share of the jointly managed

assets.").

ROBERTSON v. SEA PINES REAL ESTATE 15

nities" than is available from a single broker, id., and this "in-

tegration of operations" enables an "expansion of output"

within the real estate market. Joseph F. Brodley, Joint Ven-

tures and Antitrust Policy, 95 Harv. L. Rev. 1521, 1525

(1982). But the power of MLS board members to pass restric-

tive membership rules can also threaten economic harm to

nonmembers and deprive the real estate market of the compet-

itive forces that are at the "heart of our national economic pol-

icy." Nat’l Soc’y of Prof’l Eng’rs v. United States, 435 U.S.

679, 695 (1978). Where MLS members have "the power to

exclude other competitors from access to its pooled

resources," there "exists the potential for significant competi-

tive harms" alongside the "competitive advantages" of an

MLS. United States v. Realty Multi-List, Inc., 629 F.2d 1351,

1370 (5th Cir. 1980). Section one is therefore an appropriate

mechanism to ensure that the concerted action of MLS mem-

bers retains a procompetitive character.

B.

Our analysis is consistent with several courts of appeals

decisions that have applied § 1 to allegedly anticompetitive

MLS rules and membership criteria. See Reifert v. S. Cent.

Wis. MLS Corp., 450 F.3d 312 (7th Cir. 2006); Freeman v.

San Diego Ass’n of Realtors, 322 F.3d 1133 (9th Cir. 2003);

Thompson v. Metro. Multi-List, Inc., 934 F.2d 1566 (11th Cir.

1991); Pope v. Miss. Real Estate Comm’n, 872 F.2d 127 (5th

Cir. 1989); Realty Multi-List, Inc., 629 F.2d 1351; Penne v.

Greater Minneapolis Area Bd. of Realtors, 604 F.2d 1143

(8th Cir. 1979). Although in Reifert and Pope the courts ulti-

mately concluded that § 1 was not violated, appellants have

failed to point to a single court of appeals decision placing

allegedly anticompetitive MLS conduct outside section one’s

coverage altogether.

In an effort to distinguish these cases, appellants argue that

even if MLS board members are theoretically susceptible to

§ 1 claims, the complaints here fail to sufficiently plead that

16 ROBERTSON v. SEA PINES REAL ESTATE

defendants were engaged in anything more than intracorpor-

ate deliberations. See Copperweld, 467 U.S. 752. Specifically,

appellants contend that it is fatal to the complaints that plain-

tiffs do not allege the existence of "separate economic actors

pursuing separate economic interests" as required by Ameri-

can Needle. It is true that these exact words do not appear in

the complaints, which were filed before American Needle was

issued and which were not amended in its aftermath. But

American Needle was decided at the summary judgment stage

with the benefit of limited discovery. The decision does not

suggest that a plaintiff must invoke the precise words of "sep-

arate economic actors pursuing separate economic interests"

for a § 1 complaint against a joint venture to proceed past the

pleading stage. Instead, it is sufficient that the facts in plain-

tiffs’ complaints reasonably support such an inference. See

Iqbal, 556 U.S. at 678 ("A claim has facial plausibility when

the plaintiff pleads factual content that allows the court to

draw the reasonable inference that the defendant is liable for

the misconduct alleged.").

It is clear from the complaints that the individual broker-

ages are economically separate from the MLS and from each

other. The complaints identify each defendant as a distinct

brokerage corporation licensed to do business in the MLS ser-

vice area. Furthermore, plaintiffs allege that the "brokerages

in the [MLS] Service Area are supposed to compete with each

other to provide real-estate-brokerage services to customers."

It is an obvious inference that as potential competitors within

the MLS service area, defendants pursued separate economic

interests.

In addition, plaintiffs pled facts which suggest that the

defendants used the MLS corporate vehicle in a way that did

not coincide with the MLS’s economic interests. The com-

plaints assert that the MLS purported to benefit the real estate

market by aggregating information and expanding a database

of property listings, but that the "[MLS] rules that defendants

colluded to promulgate were not reasonably necessary to

ROBERTSON v. SEA PINES REAL ESTATE 17

achieve the pro-competitive benefits of the [MLS]." Accord-

ing to the complaints, whereas MLS members earn income

through sales commissions, the MLS finances its services

through the collection of membership dues. The complaints

allege that the MLS board members "profited by illegally

inhibiting competition," passing rules that restricted MLS

membership in order to stabilize the price of brokerage ser-

vices, but to the detriment of the MLS’ own interest in new

dues collection.

Our task here is not ultimately mechanical. The Supreme

Court has emphasized that evaluating the sufficiency of a

complaint is a "context-specific task that requires the review-

ing court to draw" not only "on its judicial experience," but

also on "common sense." Iqbal, 556 U.S. at 679. Although

rules and practices may vary among MLSs, it is plain that a

universal competitive dynamic governs the relationship

between members of a local real estate trade association.

After all, sales and commissions are finite, and competition

for them is intense. As the Fifth Circuit has observed, "[w]hen

a group of competitors like the members of [an MLS] join

together to cooperate in the conduct of their business, there

naturally arise antitrust suspicions." Realty Multi-List, Inc.,

629 F.2d at 1370; see American Needle, 130 S. Ct. at 2210

("We have similarly looked past the form of a legally ‘single

entity’ when competitors were part of professional organiza-

tions or trade groups.") (footnotes omitted). In this case, com-

mon sense is supported by concrete allegations that the

defendants as natural competitors in the provision of real

estate services combined to use the MLS as an instrumentality

to maximize their individual profit. In these circumstances, it

makes little sense to regard the actions and deliberations of

the MLS as nothing more than intracorporate activity. Plain-

tiffs therefore sufficiently pled the plurality of actors neces-

sary for § 1 to apply.

III.

The fact that the MLS board members were separate eco-

nomic actors capable of conspiring does not perforce establish

18 ROBERTSON v. SEA PINES REAL ESTATE

that plaintiffs sufficiently pled a conspiracy in restraint of

trade under § 1. As this court explained in Oksanen, "[t]o con-

clude that [defendants] have the capacity to conspire among

themselves does not mean, however, that every action taken

by [defendants] satisfies the contract, combination, or con-

spiracy requirement of section one." 945 F.2d at 706. Appel-

lants contend that plaintiffs failed to adequately plead the

elements of the § 1 offense under the Supreme Court’s recent

decisions in Iqbal, 556 U.S. 662, and Bell Atlantic Corp. v.

Twombly, 550 U.S. 544 (2007).

It is true that those decisions require more specificity from

complaints in federal civil cases than was heretofore the case.

The Supreme Court in Twombly articulated a "two-pronged

approach" to assessing the sufficiency of a complaint. Iqbal,

556 U.S. at 679. First, a complaint must contain factual alle-

gations in addition to legal conclusions. Federal Rule of Civil

Procedure 8 "requires more than labels and conclusions, and

a formulaic recitation of the elements of a cause of action will

not do." Twombly, 550 U.S. at 555. Therefore, "‘naked asser-

tion[s]’ devoid of ‘further factual enhancement’" are not

enough. Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S.

at 557). Second, "[t]o survive a motion to dismiss, a com-

plaint must contain sufficient factual matter, accepted as true,

to ‘state a claim to relief that is plausible on its face.’" Id.

(quoting Twombly, 550 U.S. at 570). Plausibility requires that

the factual allegations "be enough to raise a right to relief

above the speculative level . . . on the assumption that all the

allegations in the complaint are true." Twombly, 550 U.S. at

555; see also Glassman v. Arlington Cnty., 628 F.3d 140,

145-46 (4th Cir. 2010).

Appellants insist that plaintiffs failed to plead either a con-

spiracy or a restraint of trade in the manner that Iqbal and

Twombly require. For the reasons that follow, however, we

think the complaints adequate to survive the motions to dis-

miss.

ROBERTSON v. SEA PINES REAL ESTATE 19

A.

As to the element of conspiracy itself, the complaints satis-

fied the pleading requirements set forth in Twombly. Plain-

tiffs’ conclusion that defendants conspired is supported by

alleged facts about the substance of their agreement. The

complaints identify the defendants as individual brokerages

serving together on the MLS board of trustees, allege that

defendants "agreed . . . to develop, implement, enact, and

facilitate the enforcement of unlawful [MLS] Rules," and

describe the rules’ content and allegedly anticompetitive pur-

pose. For example, plaintiffs allege that defendants conspired

to exclude innovative brokerages from the MLS by adopting

"subjective standards for admission to membership," and by

requiring that members maintain a physical office in the area,

use a "standard, pre-approved contract," and offer only the

"full array of services that brokerages traditionally have pro-

vided." The content of the rules, described in detail in the

complaints, constitutes the factual matter establishing a plau-

sible claim of conspiracy between the MLS board members.

Appellants contend that plaintiffs failed to plead necessary

factual detail such as the times and locations of the allegedly

conspiratorial meetings. See Twombly, 550 U.S. at 565 n.10

(noting that among other things, the defective complaint

"mentioned no specific time, place, or person involved in the

alleged conspiracies"). This argument, however, overlooks the

difference between the complaints here and that at issue in

Twombly, which had alleged "that major telecommunications

providers had engaged in certain parallel conduct unfavorable

to competition" and thus violated § 1. Id. at 548-49. The

Court concluded that "an allegation of parallel conduct and a

bare assertion of conspiracy will not suffice." Id. at 556. Evi-

dence of parallel conduct alone was inadequate because of the

"ambiguity of the behavior: consistent with conspiracy, but

just as much in line with a wide swath of rational and compet-

itive business strategy unilaterally prompted by common per-

ceptions of the market." Id. at 554. Because to actually prove

20 ROBERTSON v. SEA PINES REAL ESTATE

a § 1 conspiracy requires "evidence that tends to exclude the

possibility of independent action," Monsanto Co. v. Spray-

Rite Serv. Corp., 465 U.S. 752, 768 (1984), allegations of par-

allel conduct in a complaint "must be placed in a context that

raises a suggestion of a preceding agreement," Twombly, 550

U.S. at 557, as "distinct from identical, independent action,"

id. at 549.

Twombly required contextual evidence to substantiate a

speculative claim about the existence and substance of a con-

spiracy. As the Court held, a § 1 conspiracy claim, "requires

a complaint with enough factual matter (taken as true) to sug-

gest that an agreement was made." Id. at 556. But there is no

such uncertainty here about the terms of the agreement, let

alone whether one was made. The complaints do not rest on

evidence of parallel business conduct but on allegations that

the MLS board members conspired in the form of the MLS

rules, the very passage of which establishes that the defen-

dants convened and came to an agreement. Circumstantial

evidence sufficient to "suggest[ ] a preceding agreement," id.

at 557, is thus superfluous in light of the direct evidence in the

by-laws of the agreement itself. See Burtch v. Milberg Fac-

tors, Inc., 662 F.3d 212, 225 (3d Cir. 2011) ("To adequately

plead an agreement, a plaintiff must plead either direct evi-

dence of an agreement or circumstantial evidence.") (empha-

sis added); see also Monsanto, 465 U.S. at 768 (holding that

to prove a § 1 conspiracy "there must be direct or circumstan-

tial evidence that reasonably tends to prove . . . a conscious

commitment to a common scheme designed to achieve an

unlawful objective") (emphasis added).

Conspiracies are often tacit or unwritten in an effort to

escape detection, thus necessitating resort to circumstantial

evidence to suggest that an agreement took place. Here, by

contrast, the concerted conduct is both plainly documented

and readily available so that plaintiffs can describe the factual

content of the agreement without the benefit of extended dis-

covery. Twombly’s requirements with respect to allegations of

ROBERTSON v. SEA PINES REAL ESTATE 21

illegal parallel conduct are inapplicable where, as here, the

concerted conduct is not a matter of inference or dispute.

B.

The remaining question, therefore, is whether plaintiffs

adequately pled the second element of a § 1 violation—that

the conspiracy imposed an unreasonable restraint of trade.

Because trade associations may be protective of consumer

interests and not just inimical to them, the cooperative actions

of MLS members are not per se unreasonable. As the district

court properly noted, the restraints at issue should be evalu-

ated at the merits stage according to the rule of reason, tradi-

tionally applied to joint venture cooperation that has possible

procompetitive justifications. See, e.g., Copperweld, 467 U.S.

at 768 ("[C]ombinations, such as . . . joint ventures, . . . hold

the promise of increasing a firm’s efficiency and enabling it

to compete more effectively. Accordingly, such combinations

are judged under a rule of reason . . . ."); American Needle,

130 S. Ct. at 2207 (holding that the "legality of [the NFL

teams’] concerted action must be judged under the Rule of

Reason").

Under the rule of reason, "‘the reasonableness of a restraint

is evaluated based on its impact on competition as a whole

within the relevant market.’ This evaluation requires a show-

ing of ‘anticompetitive effect,’ resulting from the agreement

in restraint of trade." Dickson, 309 F.3d at 206 (quoting

Oksanen, 945 F.2d at 708). Contrary to appellants’ insistence,

we conclude that plaintiffs state a plausible claim to relief

under Twombly, asserting facts which plausibly suggest that

the MLS rules harmed market competition. The complaints

allege six anticompetitive effects resulting from defendants’

conspiracy and the precise MLS rules that led to those effects.

With respect to anticompetitive effects, plaintiffs allege that

defendants’ conspiracy in the form of the MLS rules:

22 ROBERTSON v. SEA PINES REAL ESTATE

unreasonably (1) raised entry barriers for potential

competitors by imposing burdensome prerequisites

for membership; (2) provided a means of identifying

potentially aggressive competitors so defendants

could exclude them from [MLS] membership; (3)

stabilized the price of real-estate-brokerage services

through the prospect of price controls; (4) deterred

the emergence of Internet-based brokerages; (5) sta-

bilized the price of, and reduced customer options

for, real-estate-brokerage services by dictating the

services that all brokerages in the [MLS] Service

Area had to provide; and (6) discouraged entry of

potential competitors who raised funds through pub-

lic ownership.

These particular conclusions are supported by alleged facts

about how the MLS rules were designed to achieve these anti-

competitive results. Both the HHMLS and CMLS are alleged

to have exercised substantial market power by virtue of pri-

marily serving areas served by no other MLS, making mem-

bership in the MLS necessary for a brokerage in those areas

to successfully compete in the provision of real estate ser-

vices. See Herbert Hovenkamp, Exclusive Joint Ventures and

Antitrust Policy, 1995 Colum. Bus. L. Rev. 1, 101

("[E]xclusion from membership in a real estate multiple list-

ing service is practically tantamount to exclusion from the

real estate profession.").

Given the market power of the MLSs, plaintiffs enumerate

rules that they allege cumulatively enabled the defendants to

exclude lower-cost brokerages from effectively competing in

the local real estate markets. For example, the MLS rules pro-

hibited members from offering alternative contractual terms

and operating a "fee-for-service" business model, which

would have allowed a seller who found a buyer on his own

to avoid payment of a commission to the brokerage. Other

rules operated to restrict lower-priced and consumer-friendly

internet competition by excluding brokerages without a physi-

ROBERTSON v. SEA PINES REAL ESTATE 23

cal office in the MLS area and brokerages that did not primar-

ily do business in the MLS service area or hold a South

Carolina real-estate license as their primary license. Member-

brokerages were required to reside within the MLS service

area and operate their offices only during hours deemed rea-

sonable by the MLS. According to the complaints, such rules

denied customers the benefit of additional service choices and

of lower prices that would have been the product of more

robust competition.

Appellants argue that the complaints are deficient because

they contain no facts "tending to show what the prices for real

estate brokerage services were before, during, or after what is

alleged as the class period of 2001-2007, thus preventing the

drawing of any inference as to whether prices went up, down,

or stayed the same in that time frame." Appellants’ Br. at 33-

34. But Iqbal and Twombly do not require a plaintiff to prove

his case in the complaint. The requirement of nonconclusory

factual detail at the pleading stage is tempered by the recogni-

tion that a plaintiff may only have so much information at his

disposal at the outset. A "complaint need not ‘make a case’

against a defendant or ‘forecast evidence sufficient to prove

an element’ of the claim. It need only ‘allege facts sufficient

to state elements’ of the claim." Chao v. Rivendell Woods,

Inc., 415 F.3d 342, 349 (4th Cir. 2005) (emphases in original)

(citations omitted). It is sufficient that the alleged anticompe-

titive effects are economically plausible in light of the MLS

restrictions recounted in the complaint.2

2

Plaintiffs additionally alleged that defendants fraudulently concealed

their illegal conduct and that the applicable statute of limitations must

therefore be tolled. Pursuant to the district court’s broadly worded 1292(b)

certification, we also granted plaintiffs’ petition for permission to appeal

the district court’s dismissal of their fraudulent concealment claims. On

this issue, we also affirm. The district court properly concluded that plain-

tiffs failed to "allege affirmative acts of concealment or affirmative steps

to mislead" and that "plaintiffs’ allegations amount to no more than a fail-

ure to admit to wrongdoing, which does not suffice." See Pocahontas

Supreme Coal Co. v. Bethlehem Steel Corp., 828 F.2d 211, 218-19 (4th

Cir. 1987).

24 ROBERTSON v. SEA PINES REAL ESTATE

IV.

We cannot know at this early stage whether plaintiffs will

ultimately prevail. Whether defendants’ conduct indeed vio-

lated the Sherman Act is a question to be answered on

remand. To prevail, plaintiffs must prove that the MLS rules

caused anticompetitive harms which outweighed any procom-

petitive justification. See Bd. of Trade of City of Chi. v.

United States, 246 U.S. 231, 238 (1918). Plaintiffs allege that

"[t]he MLS rules that defendants colluded to promulgate were

not reasonably necessary to achieve the pro-competitive bene-

fits of the MLS." But in response, appellants raise potential

legitimate business purposes that may justify the rules as pro-

moting competition within the relevant real estate markets.

For example, MLS rules that impose professional standards

or police access to membership may serve to ensure compli-

ance with state regulations and to prevent fraud upon consum-

ers rather than to exclude lower-priced competition. On the

one hand, licensing or residency requirements may serve as

illegitimate barriers to market entry, while on the other they

may act as legitimate tools to increase the trustworthiness of

the real estate trade. At this early stage of the litigation, we

are not in a position to weigh the alleged anticompetitive risks

of the MLS rules against their procompetitive justifications.

This rule of reason inquiry is best conducted with the benefit

of discovery and we thus express no view on the merits of the

litigation beyond recognizing the sufficiency of the com-

plaints. We therefore affirm the judgment of the district court

and remand for further proceedings consistent with this opin-

ion.

AFFIRMED AND REMANDED