# Petition — Holter v. Moore > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385011_0355%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition - **Published:** January 1, 1983 - **Citation:** 464 U.S. 937 ## Text 83-355 = No. 83- io IN THE Supreme Court of the United States OCTOBER TERM, 1983 DWIGHT J. HOLTER AND SANDRA A. HOLTER, individually and on behalf of others similarly situated, >. Petitioners, MOORE AND COMPANY, WILLIAM M. MOORE, individually, and TIMOTHY M. MILLER, individually, and on behalf of a class composed of all other sales associates of Moore and Company acting as real estate agents for sellers of residential properties, Respondents. PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE TENTH CIRCUIT HUGH A. BURNS (Counsel of Record) PHILLIP S. FIGA 333 Steele Park 50 South Steele Street Denver, Colorado 80209 Telephone: (303) 399-4636 Attorneys for Petitioners August 29, 1983 QUESTIONS PRESENTED FOR REVIEW i Whether for purposes of Section 1 of the Sherman Act, 15 U.S.C. § 1, a real estate sales company is incapable of conm- bining or conspiring in restraint of trade with independent contractor sales associ- ates as a matter of law. ra Whether real estate sales com- panies can, under the Sherman Act, by con- tractual arrangement control the percent- age and amount of commissions received by its independent contractor sales agents for participating in sales of residential real estate. : Whether there exists and is applicable here an exception to the anti- trust intracorporate conspiracy doctrine for agents of a corporation who have an independent personal stake in an antitrust conspiracy involving them and their cor- poration. TABLE OF CONTENTS Questions Presented fpr Review ...... ewe MEMOCLCEOS ci cccvcvcescovce EEO OLOW cescocbioccccessveseses DPCP EE pape eececcivocesesevecece a rere Statement of the Case .....cccccccces rrr Or COO CORE oc cc cccccece 2. Jurisdiction of the SS 3. Undisputed Facts for Purposes of Summary PC TG EON “crccccceccceseccs Reasons for Granting the Writ ....... 1. Inconsistencies as to the Antitrust Conspiracy Standards. 2. The Lack of Price Competition in the Real Estate Industry 3. Direct Benefit Exception ...... Teen es owe 6'o.6 8 Seve “oe to wo Ww Nd Appendix: App. A: Colorado District Court order and opinion granting respondents’ motion for summary judgment and dismissing petitioners’ amended complaint, January 15, 1981. App. B: Tenth Circuit opinion, April 4, 1983. Table of Authorities to Appendix A ..... vii Table of Authorities to Appendix B..... ix - iii - TABLE OF AUTHORITIES Cases Page Albrecht v. Herald Co., 390 U.S. 145 ED'S Sica ors'el eed oak cae week aaa & a he 12 America's Best Cinema Corp. v. Fort Wayne Newspapers, Inc., 347 F.Supp. Dae Gees ROGs OIE) 200 6082 udecee 22 Card v. National Life Insurance Co., 603 F.2d 828 (10th Cir. 1979) .... 14 Copperweld Corp. v. Independent Tire Corp., 691 F.2d 310 (7th Cir. 1982), cert. granted, O:S. res | Tet. fr 3893 (1983) (No. 82-1260) 12 Greenville Publishing Co., Inc. v. Daily Reflector, Inc., 496 F.2d Peee oer Cae CIE s. ESTE} sc ccavesee 22 H & B Equipment Co. v. International Harvester Co., 577 F.2d 239, 244 CRON Mes ADO) onc thee eas asionvows 14,21 Harold Friedman, Inc. v. Kroger Co., oes F.2e 1066 (3d Cir. 1978) ..... 14 Kiefer-Stewart Co. v. Joseph E. Seagram & Sons, Inc., 340 U.S. Biase Rae REPRE KS caper eeeatan sie 14,15 Morton Bldgs. of Nebraska, Inc. v. Morton Bldgs., Inc., 531 F.2d 910, an Gee SD Res GEO dW wce's-ae 86 Gees 21,22 Murray v. Toyota Motors Distributors, inc., 664 F.2d 1377 (9th Cir.), cert. denied, 457 U.S. 1106 (1982) 13 - iv - Page Nelson Radio & Supply Co. v. Motor- ola, Inc. 200 F.2d 911, 914 (5th Cir. 1952), cert. denied, 345 U.S. RE ede the CW cka whee pe bweee 22 North American Soccer League v. National Football League, 670 F.2d 1249 (2d. Cir. 1982), cert. denied, U.S. > 103: S.GE. S99, 74 te ee ee ED (cn nc uae sancusés 13 Perma Life Mufflers, Inc. v. Inter- National Parts Corp., 392 U.S. 134, I ek ln bore 14 Poller v. Columbia Broadcasting Sys- tem, Inc., 368 U.S. 464 (1962) ... 12 Schwimmer v. Sony Corp. of America, 677 F.2d 946 (2d Cir.) cert. denied, a 5 Ma Pe ee re 53 4 Colo. Admin. Code § 725-1E-9 (1983) 55 “« #3 = OPINIONS BELOW The opinion of the Court of Appeals has been reported at 702 F.2d 854 (10th Cir. 1983) and at 1983-1 Trade Reg. Rep. (CCH) 4 65,286, and is set forth in Appendix B, infra. The opinion of the District Court has not been reported, but is set out in Appendix A, infra. JURISDICTION 2 Date of Judgment Sought to be Reviewed: March 21, 1983. 2. Date of Order Denying Petition for Rehearing and Suggestion for Rehearing En Banc: June 10, 1983. 3. Statutory Provision Conferring Jurisdiction: The jurisdiction of this Court is invoked under 28 U.S.C. § 1254(1). STATUTE INVOLVED The statute involved, the Sherman Antitrust Act, 15 U.S.C. § 1, provides in pertinent part: Every contract, combina- tion in the form of trust or otherwise, or conspiracy, in re- straint of trade or commerce, among several States, or with foreign nations, is declared to be illegal. STATEMENT OF THE CASE 1. Nature of the Case The named petitioners sold their single-family residence in Fort Collins, Colorado in 1978 using the services of the named respondents, and paid them a real estate commission equal to 7% of the pur- chase price (App. A, pp. 25-26). Respon- dent Moore and Company is a licensed corporate real estate broker and Respondent Timothy M. Miller is a licensed real estate salesman who participated in the sale as an independent contractor to Moore and Company (App. A, pp. 25-26, 35, 8). Respondent William M. Moore is the real estate broker of Moore and Company under whose broker's license Moore and Company operates (App. A, pp. 25-26). The action brought by the petitioners alleges that Moore and Company combined and conspired with independent contractor sales associates affiliated with that com- pany to fix the commissions charged sellers of residential real estate at the rate of 7% of the gross sales price of such properties (App. A, p. 26). This price-fixing arrangement is alleged to be a per se vio- lation of Section 1 of the Sherman Act, 15 U.S.C. § 1. The action was brought as a plaintiffs' and defendants' class action (App. A, p. 26). The trial court granted defendants' Motion for Summary Judgment pursuant to Rule 56 of the Federal Rules of Civil Pro- cedure and dismissed the case prior to certification of either the plaintiff or defendant class. The Honorable Richard P. Matsch ruled that while sales associates of Moore and Company were independent con- tractors and had a personal stake in the business which Petitioners alleged consti- tuted price-fixing of real estate commis- sions, the sales associates did not have an ‘independent' personal stake so as to dis- tinguish them from Moore and Company (App. A). Thus, sales associates of Moore and Company were held as a matter of law to be incapable of combining or conspiring with that corporate defendant. The Tenth Cir- cuit Court of Appeals affirmed Judge Matsch's decision (App. B), and Petition- ers' Petition for Rehearing and Suggestion for Rehearing In Banc was denied by that appellate court. 2 Jurisdiction of the Trial Court The trial court had jurisdiction below pursuant to 28 U.S.C. § 1337(a). 3. Undisputed Facts for Purposes of Summary Judgment Motion Moore and Company is a general real estate brokerage firm specializing in residential, commercial, industrial and investment sales (App. A, p. 35). Approx- imately 80% of its business relates to residential sales (App. A, p.35). Like other real estate firms in Colorado and nationwide, Moore and Company brings together buyers and sellers of residential real estate and charges a fee, or commis- sion, for its services (App. A, p. 35). For Moore and Company, the fee as a matter of policy and agreement with its agents is 7% of the gross sales price on existing resi- dential property (App. A, p. 35). Moore and Company markets residential property through agents known as sales associates (App. A, p. 37). The sales efforts are actually undertaken by the sales associates, while Moore and Company provides assistance in the form of office Space, secretarial staff, real estate closing staff, telephones, real estate forms and other ancillary services and materials (App. A, pp. 37). Sales asso- ciates of Moore and Company, like those of other real estate firms, are separately licensed real estate salesmen or brokers (App. A. pp. 39-40). They must take and pass state-administered examinations in order to receive their licenses in Colorado (App. A, pp. 39-40). In addition, they must meet certain prescribed classroom instruc- tion requirements (App. A, p. 40). Moore and Company sales associates are independent contractors and not employees (App. A, p. 40). They are paid solely on the basis of commissions they generate (App. A, p. 40). They do not have federal, state or local income taxes withheld by Moore and Company from their commission checks (App. A, p. 40). Moore and Company does not withhold Social Security (FICA) taxes from paychecks of sales associates and does not guarantee or provide them with the federal minimum wage, vacation pay, sick pay, re- tirement benefits, or medical, life or dis- ability insurance (App. A, pp. 40). When a Moore and Company sales associ- ate participates in a residential real estate sale, he or she receives a portion of the total commission, which is normally paid by the seller (App. A, p. 40). If the sales associate handles the transaction without the participation of another sales associate, the sales associate splits the commission with Moore and Company (App. A, p. 41). If another Moore and Company sales associate is involved, the commission is divided among the sales associates and Moore and Company (App. A, p. 41). If another brokerage firm is involved, the other broker gets a share (App. A, p. 41). The commission split as between Moore and Company and one of its independent con- tractor sales associates in any particular transaction depends upon various factors, including the sales associate's experience and production levels, whether he or she is the listing agent or the one finding the buyer, and, if another broker is the list- ing broker, the total commission to be split by the various real estate agents and brokers involved (App. A, pp. 41-42). In the case of a Moore and Company sales asso- ciate obtaining the listing, the total commission to be divided is 7% of the gross sales price (App. A, p. 42). Moore and Company usually distributes commissions to sales associates within a day or two after a real estate transaction closes (App. A, p. 42). As independent contractor sales asso- ciates, members of the putative defendant class are responsible for their own busi- ness expenses while affiliated with Moore and Company (App. A, p. 42). The sales associate pays for his or her own auto- mobile expenses, meal and entertainment expenses, car telephone, real estate license fees, membership dues to the vari- ous realtor organizations, insurance, and advertising costs beyond 6% of the sales associate's income (App. A, p. 42). The sales associates sometimes hire their own a employees or independent contractors (who are not affiliated with Moore and Company) to handle secretarial matters for them (App. A, pp. 42-43). It is common among Moore and Company sales associates to main- tain an office in their personal residences, and they deduct a portion of their home expenses as business expense (App. A, p. 43). A first-year sales asso- ciate can expect his business-related expenses to total 20% of his or her commis- sion income (App. A, p. 43). Moore and Company observes the re- quirements of the Internal Revenue Code for obtaining the benefits of maintaining its sales force as independent contractors (App. A, p. 43). Moore and Company sacri- fices the ability to control and direct the activities of its independent contractor sales staff, which control it would other- wise have over employees (App. A, pp. 44- 45). Respondent Moore and Company files — ve tax reports with the Internal Revenue Ser- vice indicating that the commission income earned by sales associates was earned by independent contractors, not by employees (App. A, p. 43). The financial statements of Moore and Company do not treat income of sales associates as income of Moore and Company, resulting in an annual tax savings to Moore and Company of approximately $600,000 (Ex. A, pp. 43-44). REASONS FOR GRANTING THE WRIT l. Inconsistencies as to the Antitrust Conspiracy Standards This case involves an issue to which the circuits have applied widely divergent legal standards. The issue of whether a plurality of actors exists for there to be a conspiracy in restraint of trade viola- tion of Section 1 of the Sherman Act is in a state of confusion among trial and appel- late courts below. This Court has recog- » BB le nized in granting certiorari review in Copperweld Corp. v. Independent Tube Corp., 691 F.2d 310 (7th Cir. 1982), cert. granted, U.S. __, 51 U.S.L.W. 3893 (1983) (No. 82-1260) that the legal stand- ards for determining whether related entities are capable of conspiring in violation of the Sherman Act require clari- fication. The instant case would be a worthy and useful companion to Copperweld and would clarify the law applicable in this regard to the real estate industry. Appellate decisions which conflict with the opinion of the Court below in- clude: Albrecht v. Herald Co., 390 U.S. 145 (1968) (mewspaper distributor who was an independent contractor and news- paper circulation company held to be an antitrust co-conspirators with the newspaper). Poller ov. Columbia Broadcasting system, iInc., 368 U.S. 464 (1967) (management consultant/agent for CBS held capable of conspiracy with his principal, the network). North American Soccer League v. National Football League, ETC F.2d 1249 (2d Cir. 1982), cert. denied, U.S. ; 103 S.Ct. 639 (1983) (teams of professional football league held to be separate economic entities for antitrust pur- poses). Murray v. Toyota Motors Distributors, Inc., 664 F.2d 13// (9th Cir.), cert. denied, 457 U.S. 1106 (1982) (combi- nation and conspiracy requirement of Section 1 of the Sherman Act is to be decided by the trier of fact, rather than as a matter of law). Tamaron Distributing Corp. v. Weiner, Z16 F.2d 13) (?/th Cir. 1969) (manu- facturer's representative suffi- ciently distinct from manufacturer/ principal so as to engage in an anti- trust conspiracy). Cases cited by the Court below that reached contrary conclusions, i.e., that parties were too interrelated so as to meet the plurality requirement betas“ egiucesicn 1 of the Sherman Act, 15 U.S.C. § 1, include: Schwimmer v. Sony Corp. of America, 6/7 e 2d 946 (2d Cir.) cert. denied, 3 - 303 $: Ct. 382; 156. ee ~~ 79-398 (1982). Tose v. First Pennsylvania Bank, N.A., 548 F.2d 879 (3d Cir.), cert. denied, 454 U.S. 393 (1981). s3 = Card v. National Life Insurance Co., ; t at. ; H & B Equipment Co. v. International Harvester Co., 577 F.20 239 (doth cir. 19/8). Harold Friedman, Inc. v. Kroger Co., 561 F.2d 1068 (3d Cir. 1978). The ruling below also appears to be squarely in contradiction to this Court's earlier pronouncements that efforts by parties to create separate entities for corporate and tax purposes creates the necessary separateness to establish the plurality of actors requirement for main- taining a conspiracy in violation of Section 1 of the Sherman Act, 15 U.S.C. § 1. See Perma Life Mufflers, Inc. v. Inter- national Parts Corp., 392 U.S. 134, 141-42 (1968) ("[SJince Respondents Midas and International availed themselves of the privilege of doing business through sep- arate corporations, the fact of common ownership could not save them from any of their obligations that the law imposes on separate entities.''); Kiefer-Stewart Co. v. Joseph E. Seagram & Sons, Inc., 340 U.S. . tho 211, 215 (1951) ("[C]ommon ownership and control does not liberate corporations from the impact of the antitrust laws."); United States v. Yellow Cab Co., 332 U.S. 218 (1947) (affiliated corporations under com- mon control are capable of conspiring with one another in violation of the Sherman Act). Here Moore and Company and its sales associates clearly created separate entities (a corporation distinguishing it- self from independent contractor sole proprietorships) so that they could enjoy the benefits of separateness afforded by tax and corporate law. Correspondingly, they should also bear the responsibilities that federal law imposes on separate entities. 2. The Lack of Price Competition in the Real Estate Industry The issue of whether real estate organizations can, under the Sherman Act, control the percentage and amount of com- So missions received by its independent contractor/sales agents for participating in sales of residential real estate is an important question of federal law which has not been, but should be, settled by this Court. The real estate industry of this nation is well organized and politically powerful. Over the years it has through various methods developed a system whereby it almost uniformly charges 6% to 7% of the sales price of existing residential prop- erties for sales in which its agents participate. As was stated by the head of the Federal Trade Commission: You know, of course, that in most Prokerage tele sea: tite ae uniform throughout an area--6% or 7i--with little or no compet- itive pricing. Michael Pertschuk, Chairman, Federal Trade Commission, quoted in "FTC is Investigating Realty Overcharges"’, Washington Post, Feb- ruary 24, 1979 at E-3. As inflation has bloated the prices of residential housing . 165 in recent years, real estate commissions have grown proportionately, although with- out commensurate increases in the quantity or quality of services performed. Real estate commission arrangements are rarely negotiated between members of that industry and home owners who purchase new residences only a few times in the course of a life- time. "Lack of knowledge of the law and sporadic nature of the individual's imper- sonal interest in real estate transactions have combined to minimize an effective popular demand for antitrust enforcement [in the real estate industry]."’ Note, "Antitrust law: An Emerging Problem for Florida Realtors", 24 U. Fla. L. Rev. 266, 283 (1972). The Federal Trade Commission is preparing a detailed report, due in October 1983, on the anticompetitive aspects of the real estate industry. To maximize its enjoyment of this com- mission income, the real estate industry ay ae often creates separate legal entities through which to do business. Corporate real estate brokers, like Respondent Moore and Company, maintain their sales agents as independent contractors rather than as en- ployees. This way, the corporations do not include those portions of the commissions received by the agents as corporate income for which state and federal income tax must be paid. This separateness also permits the corporations to avoid withholding wages and social security taxes (FICA) from pay- checks of the sales agents. While the propriety of permitting such practices to continue from a tax policy and equity standpoint is questionable, from an anti- trust perspective, this purposeful crea- tion of separate legal entities through which to do business makes the parties to such arrangements capable of combining and conspiring for Sherman Act purposes. « 18 - A holding reversing the Tenth Cir- cuit's affirmance of the District Court's granting the Motion for Summary Judgment would inject competitive incentives into a hitherto moribund industry in terms of con- sumer price alternatives. See Erxleben, "In Search of Price and Service Competition in Residential Real Estate Brokerage: Breaking the Cartel", 56 Wash. L. Rev. 179 (1981). One possible result of reversal would be that a corporate real estate broker such as Respondent Moore and Company could no longer have absolute control over the full amount of the real estate commis- sion charged homeowners, but rather could only set what its share of the commission would be. The sales agent could control his or her commission component, thus encouraging price competition as among real estate agents and companies regarding the overall commission offered consumers. In other words, a possible result of reversal a is that Moore and Company could only require its sales associates to charge a minimum commission to be received entirely by Moore and Company. Moore and Company, however, could not force or conspire with sales associates to charge a fixed amount for additional commissions to be earned by the sales associates themselves. Clearly under this possible scenario, real estate commissions might fall or services in- crease. The homeowning consumer public would undoubtedly benefit. Reversal of the trial court would not outlaw all collaborative activity among real estate companies and independent con- tractor agents. Instead, only price-fixing of the sort alleged in the Complaint would be barred. Moore and Company could con- tinue using sales associates, either as independent contractors or employees, but could not dictate or conspire with them with respect to their share of the total « 98 « commission. * Thus, reversal of the trial court would possibly enhance competition in the real estate industry, reduce atLoresty in real estate commission practices and work no substantial hardship on Moore and Company's (or other reaitors') future operations. 36 Direct Benefit Exception There has been a growing body of anti- trust law which recognizes that corporate officers, employees and agents are capable of conspiring with their corporation in violation of the Sherman Act where they were actuated by motives personal to them- selves or received a direct benefit from an arrangement violative of the Sherman Act. In such instances, the plurality require- ment of Section 1 of the Sherman Act has been held to be met. See H & B Equipment Co. v. International Harvester Co., 577 F.2d 239, 244 (Sth Cir. 1977); Morton Bldgs. of Nebraska, Inc. v. Morton Bldgs., Inc., 531 — 2 F.2d 910, 917 (8th Cir. 1976); Greenville Publishing Co., Inc. v. Daily Reflector, Inc., 496 F.2d 391, 399 (4th Cir. 1974); America's Best Cinima Corp. v. Fort Wayne Newspapers, Inc., 347 F. Supp. 328 (N.D. Ind. 1972); Nelson Radio & Supply Co. v. Motorola, Inc., 200 F.2d 911, 914 (5th Cir. 1952), cert. denied, 345 U.S. 925 (1953); ABA Section of Antitrust Law, Antitrust Developments 1955-1968 at 19 n.84 (1968); 1 J. von Kalinowski, Antitrust Laws and Trade Regulation § 6.01[2] at 6-19 to 6-20 (1980). The contours of this emerging antitrust doctrine have not been clarified by the courts below or by this Court. The Tenth Circuit below indicated that the personal stake doctrine does not apply to the instant case because, as that court noted, it pertains to situations where the personal stake of the corporate officer, employee or agent has a vested interest in an entity other than the corporation. How- = 29 ever, the named plaintiffs in the instant case did identify an interest held by the Moore and Company indeperdent contractor sales agents. Their income is derived solely from real estate commissions. They are not on salary, and they benefit person- ally and directly from a 7% commission structure out of which they receive a pre- ordained percentage from sales of resi- dential properties in which they partici- pate in conjunction with Moore and Company. Thus, their commission income out of which Moore and Company withholds no taxes or FICA, is directly affected by the 7% com- mission structure. Given this "independent personal stake" in the 7% commission combination, sales associates and their commission-splitting partner, Moore and Company, should not be deemed exempt from antitrust scrutiny, certainly not at the summary judgment level. There is no prec- edent for the Tenth Circuit's conclusion ee that the "independent personal stake" can only be indirect such as when a corporate officer owns a competing corporation. Direct benefits accruing to an agent by engaging in a price-fixing arrangement with his or her principal, as well as indirect benefits, should be sufficient to permit a plaintiff to withstand summary dismissal based upon a claimed intra-corporate con- Spiracy. CONCLUSION For the foregoing reasons, the Peti- tion for A Writ of Certiorari should be granted with respect to each of the three questions on which it is sought. Dated August 29 , 1963. Respectfully submitted, BURNS & FIGA, P.C. Phillip S. Figa 333 Steele Park : 50 South Steele Street Denver, Colorado 80209 Telephone: (303) 399-4636 Attorneys for Petitioners a ce APPENDIX A IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Civil Action No. 79-M-1600 DWIGHT J. HOLTER and ; SANDRA A. HOLTER, individually, and on behalf of others similarly situated, Plaintiffs, vs. MOORE AND COMPANY, WILLIAM M. MOORE, individually, and TIMOTHY M. MILLER, individually, and on behalf of a class composed of all other sales associates of Moore and Company acting as real estate agents for sellers of residential properties, Defendants. MEMORANDUM OPINION AND ORDER Dwight J. Holter and Sandra A. Holter sold their home in Fort Collins, Colorado on August 31, 1978, using the services of Timothy M. Miller, a real estate agent associated with Moore and Company, a cor- poration which maintains real estate offices in a number of Colorado cities. William M. Moore is a licensed real estate broker and an officer of Moore and Company, which is an employing broker authorized to Pa. pe act under the broker's license held by William M. Moore. The plaintiffs paid a 7% commission to Moore and Company on that sale and it is that commission which is the basis for this action. The plaintiffs brought the action on behalf of all persons who sold residential properties within Colorado within four years prior to the filing of this suit and who used the services of real estate agents associated with Moore and Company for which a 7% commission was charged and paid. The plaintiffs also have sought to form a defendant class consisting of all sales associates of Moore and Company who acted as real estate agents for sellers of resi- dential properties in Colorado within the same four-year period. After a hearing on the defendants’ initial motion to dismiss under F.R.C.P. 12, the plaintiffs amended their complaint to claim relief solely on allegations of a conspiracy to fix commis- sions in violation of Section 1 of the Sherman Act (15 U.S.C. § 1). The parties then agreed to conduct discovery limited to the relationship between Moore and Company and its sales associates as evidenced by documents and business practices during the relevant time. The premise of that agreement was that considerable time and expense could be saved by developing a discovery record ade- quate to permit resolution of the legal question of whether that relationship was sufficiently controlled by the defendant corporation to preclude any actionable conspiracy among the named defendants and the defendant class. That legal issue was properly raised by the defendants’ motion for summary judgment which was heard on November 24, 1980. At that hearing, it was also agreed that the court should decide the motion upon the assumption that the putative classes of plaintiffs and defend- Ee i he ants would be formed as requested by the plaintiffs. While there are some differences between the plaintiffs' and defendants’ briefs in their respective recitals of the facts revealed during discovery, those differences are not deemed material. For pusposes of deciding the legal question presented, the statements of fact contained in pages 6 through 10 of the plaintiffs’ brief are accepted as true, incorporated herein by this reference, and attached as an appendix to this memorandum opinion. Additionally, the affidavit of Keith T. Koske, dated June 2, 1980, submitted by the defendants, has not been challenged by the plaintiffs and it is therefore accepted as true. Upon this basis it is appropriate to find and conclude that there is no genuine issue as to any material fact and the case is, therefore, subject to disposition on the defendants' motion for summary judgment » s&s under Rule 56 of the Federal Rules of Civil Procedure. The accepted statements of fact reflect that the business practices of Moore and Company give associates a measure of both independence and obligation. As licensed real estate agents, authorized to act under Moore's brokerage authority, these salespersons are obligated to provide services according to Moore's guidelines, to offer the listing agreements at per- centages set by the company and to sign contracts solely as agents for Moore and Company. In fact, Colorado law requires that all transactions by Moore salespersons shall be done in the name of the licensed broker, Moore and Company, as principal. C.R.S. § 12-61-109(2) (1973) and Rule E-6 of the Colorado Real Estate Commission. On the other hand, the Moore asso- ciates do have a certain amount of independence, and some aspects of their . status with the company are more character- istic of an independent contractor than an employee. They are compensated only by commissions, and since Moore considers them to be independent contractors for tax pur- poses and does not withhold anything from the commission checks, they are responsible for full payment of their own income taxes, retirement plans and medical insurance. Moore does pay for and provide furnished office space, secretarial services, tele- phone service, documentary forms, and experienced clerical assistance in closing transactions. The associates pay some of their own expenses, including travel and entertainment expenses and occasionally must pay for supplemental secretarial and clerical services. The plaintiffs contend that there are sufficient indicia of independence to sup- port a charge of an unlawful conspiracy under Section 1 of the Sherman act, in « 40% derogation of the general rule that a corporation cannot conspire with its offi- cers or agents to violate that statute. See H & B Equipment Co., Inc. v. International Harvester, 577 F.2d 239 (5th Cir. 1978) and Jos. Seagram & Sons v. Hawaiian Oke and Liquors, 416 F.2d 71 (9th Cir. 1969), cert. denied, 396 U.S. 1062. In support of their argument, the plaintiffs cite cases in which corporations were held to have conspired with their subsidiaries or affiliates, and cases in which coercive activity to effectuate re- tail price maintenance has been found to constitute a vertical conspiracy. U.S. v. Yellow Cab, 332 U.S. 218 (1947), Kiefer- Stewart Co. v. Jos. Seagram & Sons, Inc., 340 U.S. 211 (1951), Simpson v. Union Oil Co., 377 U.S. 13 (1964). Additionally, they urge adoption of a test suggested in the opinion from the Fifth Circuit in H&B Equipment Co., supra, where no conspiracy a ae was found but the court noted that one might exist of an agent had an "independent per- sonal stake in achieving the object of the conspiracy." 577 F.2d at 244. The plaintiffs urge that the Moore associates have the required "independent personal stake" in the 7% commissions, and thus can be held to have conspired with Moore and Company to maintain that percentage. I am not persuaded by that argument. Antitrust liability is governed by con- siderations of economic policy, not by labelling. Agents are not independent for purposes of Section 1 simply because they are paid by commissions or have no income taxes withheld. American Oil v. McMullin, 508 F.2d 1345 (10th Cir. 1975). Payment on commissions may give the associates a "personal" stake in the business to a greater extent than a salaried employee, but it does not create an “independent” personal stake. « Se In Card v. National Life Insurance, 603 F.2d 828 (10th Cir. 1979), Judge Doyle applied the McCarran-Ferguson Act exemp- tion from antitrust liability for an insurance business, and observed that the general agents who were members of an agents' association could not conspire with the company which was their principal in an agency relationship which gave much more independence than is the case here. While the case is not controlling precedent, Judge Doyle's comments and the concurring opinion of Judge McKay are a clear indica- tion of the view of conspiracy which prevails in the Tenth Circuit Court of Appeals. That view is shared by the Ninth Circuit Court of Appeals in Jos. Seagram & Sons v. Hawaiian Oke and Liquors, supra. Care should be taken in considering a motion for summary judgment in an antitrust case and the motion must be denied if there is any suggestion that the plaintiff could his agents and brokers involved. (In the case of a Moore sales associate obtaining the listing, the total commission to be divided is 7% of the gross sales price.) Moore and Company usually distributes commissions to sales associates within a day or two after a teal estate transaction closes (Exhibit Q). As independent contractor sales asso- ciates, members of the putative defendant class are responsible for their own busi- ness expenses while affiliated with Moore and Company. The sales associate pays for his or her own automobile expenses, meal and entertainment expenses, car telephone, teal estate license fees, membership dues to the various realtor organizations, in- Surance and advertising costs beyond 6% of the sales associate's income (Exhibit R). In fact, sales associates sometimes hire their own employees or independent con- tractors (who are not affiliated with Moore Yt and Company) to handle secretarial matters for them (Exhibits R, S andT). It is common among Moore sales associates to maintain an office in their personal residences, and they presumably deduct a portion of their home expenses as a business expense (Exhibit U). A first-year sales associate can expect his business-related expenses to total 20% of his or her commission income (Exhibit V). Moore and Company tries to observe the requirements of the Internal Revenue Code and the Internal Revenue Service ("IRS") for obtaining the benefits of maintaining its sales force as independent contractors. See generally, Stand. Fed. Tax Rep. (CCH) 4 4939 (1980). Moore and Company files tax reports with the IRS indicating that the commission income earned by sales. associ- ates was earned by independent contractors, not by employees (Exhibit W). The financial statements of Moore and Company « £8: do not treat income of sales associates as income of Moore and Company (Exhibits X and Y), and the company implements policies which seek to minimize the possibility that the IRS will treat sales associates as employees for income tax and social secur- ity purposes (Exhibits Z, AA and BB). Moore and Company saves itself approximately $600,000 annually by treating its sales associates as independent contractors (Exhibit BB). In order to secure the tax, social security and other benefits of maintaining its sales associates as independent con- tractors, Moore and Company must sacrifice its ability to control and direct the activities of its sales staff. As the Controller and Secretary-Treasurer of Moore and Company states: If the tax consequences were the same, I would prefer that they [Moore sales associ- ates] were employees. You always have the problem of maintaining » £6 & this independent contractor status, and because of the way we operate, that is very divvicult. And we could more closely direct their activities, you know, more -- you know, "You will be to work at eight." I mean, you know, "You will ....." -- those kinds of things. We could more closely direct their activities, and that is my -- so I would really prefer that they were en- ployees from that standpoint, from an operations standpoint. Deposition of Robert Williams, taken September 3, 1980, at 36. Requirements imposed on sales asso- ciates are minimal. Aside from following common-sense grooming and _ business clothing standards, sales associates are expected to attend occasional meetings of the sales force and meet production goals. Such requirements, however, are couched in terms of nonobligatory expectations, and for a high producing sales associate all is forgiven. Sales associates have no fixed office hours and no routine schedule (Exhibits CC and DD). In the words of one ae former Moore and Company sales associate, with the exception of Wednesday sales staff meetings that occupied perhaps the entire morning, sales associates could come and go as they pleased (Exhibit CC). Paraphrasing the President of Moore and Company, sales associates are not required to do anything; it is simply in the mutual best interests of Moore and Company and its sales associates that Moore guidelines are observed (Exhibit DD). » 66% APPENDIY B PUBLISH UNITED STATES COURT OF APPEALS TENTH CIRCUIT DWIGHT J. HOLTER and SANDRA A. HOLTER, individually and on behalf of others similarly situated, Appellants, vs. No. 81-1088 MOORE AND COMPANY, WILLIAM M. MOORE, individually, and TIMOTHY M. MILLER, individually, and on behalf of a class composed of all other sales associates of Moore and Company acting as real estate agents for sellers of residential properties, ee a a a a a ee Appellees. APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO (D. C. No. 79-M-1600) Phillip S. Figa (with Hugh A. Burns on the brief) of Burns & Figa, P.C., Denver, Colo- rado, for Appellants. — James M. Lyons (with James R. Everson on the brief) of Rothgerber, Appel & Powers, Denver, Colorado, for Appellees. Before HOLLOWAY, McKAY and LOGAN, Circuit Judges. McKAY, Circuit Judge. = 48 « Appellants sold their house through defendant Moore and Company (a Colorado real estate broker) and one of its licensed sales agents. Moore charged them its standard seven percent commission for the sale. They then brought this antitrust suit against Moore, its president, and all of Moore's sales agents on behalf of them- selves and a class of plaintiffs similarly situated. They alleged that the seven percent commission Moore charges for sales of residential housing and the acquiescence in that rate by Moore's sales agents is resale price maintenance between Moore and the agents as well as horizontal price fixing among the agents. The trial court granted the defendants’ motion for summary judgment. It held as a matter of law that Moore and the agents constitute a single economic entity incapable of conspiring under section 1 of the Sherman Act, 15 U.S.C. § 1 (1976). ae Section 1 of the Sherman Act can be violated only by concerted action by a plurality of actors. Blankenship v. Herzfeld, 661 F.2d 840, 846 (10th Cir. 1981). Since a corporation has no way of acting except through officers and employ- ees, the officers and employees are part of the same economic unit as the corporation for antitrust purposes. Thus, officers and employees of a corporation are generally incapable of conspiring with the corpora- tion or with each other.2/ Schwimmer v. Sony Corp. of America, 677 F.2d 946, 953 (2d Cir. 1982); Tose v. First Pa. Bank, 648 F.2d 879, 893-94 (3d Cir.), cert. denied, 454 U.S. 893 (1981); H & B Equipment Co. v. International Harvester Co., 577 F.2d 239, 244 (5th Cir. 1978). In addition, anti- trust defendants with separate legal labels -- e.g., Corporation-agent -- are not 1. But see post n.8. =. ee always capable of conspiring; they must be separate economic entities in substance as well. See Card v. National Life Insurance Co., 603 F.2d 828, 834 (10th Cir. 1979) (general insurance agents incapable of conspiring with insurance company). Thus, even though Moore's sales agents are taxed as independent contractors, that fact is not dispositive of this case. While a corporation acting through its officers and employees can conspire under section 1 with some outside contractors, we face here an antecedent question: whether the licensed real estate agents employed by the broker are employees or outside agents for pur- poses of the Sherman act.4/ 2. If we determined that the agents were sufficiently independent of Moore to be "outside" contractors, there would still be a difficult question to resolve since the cases reflect uncertainty as to when outside agents are capable of conspiring with their principle for purposes of § 1 of the Sherman Act. Compare Albrecht v. Herald Co., 390 U.S. 145 (1968) with Harold Friedman, Inc. v. Kroger Co., 581 F.2d 1068 (3d Cir. 1978). We need not reach the problems raised by the outside contractor cases since we find that Moore's sales agents are not "outside con- tractors.” “