Opinion ID: 495447
Heading Depth: 2
Heading Rank: 2

Heading: ssbr

Text: 10 SSBR contends that it has standing to maintain an antitrust action against defendants on two grounds. First it argues that it has proprietary standing under Sec. 4 of the Clayton Act to seek treble damages because it has sustained an injury to its business or property as a result of defendants' anticompetitive activities. Second it argues that it has representational standing under Hunt v. Washington State Apple Advertising Comm'n, 432 U.S. 333, 97 S.Ct. 2434, 53 L.Ed.2d 383, to maintain an action for injunctive relief pursuant to Sec. 16 of the Clayton Act on behalf of its member brokers.
11 As a part of its trade association activities, SSBR maintains a Multiple Listing Service (MLS), a comprehensive, computerized listing of real estate properties for sale in the south suburban communities of Chicago, including the Beverly Hills/Morgan Park neighborhoods. SSBR charges a substantial initiation and annual fee to members who desire to participate in the MLS. The complaint alleges that the defendants have conspired and agreed to boycott the MLS by refusing to list any of their properties with SSBR. Furthermore, the defendants have allegedly urged consumers to boycott the MLS as well. As a result of these activities, SSBR contends that it has been directly injured in its business or property since the MLS is no longer a useful marketing tool in the relevant market area. 12 We must first determine whether the alleged injury sustained by SSBR is of the type the antitrust laws were intended to prevent. Brunswick, 429 U.S. at 489, 97 S.Ct. at 697. The antitrust laws are of course for the benefit of competition, not competitors. Id. at 488, 97 S.Ct. at 697 (quoting Brown Shoe Co. v. United States, 370 U.S. 294, 320, 82 S.Ct. 1502, 1521, 8 L.Ed.2d 510); Ball Memorial Hosp., Inc. v. Mutual Hosp. Ins., Inc., 784 F.2d 1325, 1338 (7th Cir.1986). In Associated General Contractors, the Supreme Court explained that the Sherman Act was enacted to assure customers the benefits of price competition, and our prior cases have emphasized the central interest in protecting the economic freedom of participants in the relevant market. 459 U.S. at 538, 103 S.Ct. at 908; see also Ball Memorial Hosp., 784 F.2d at 1338 (The antitrust laws protect efficient production for the benefit of consumers.); Fishman v. Estate of Wirtz, 807 F.2d 520, 566 (7th Cir.1986) (dissenting opinion). As set out in the complaint, the relevant market is the provision of real estate brokerage services in the two neighborhoods at issue, not the provision of listing services to brokerage firms. SSBR is simply not a participant in this market; it does not supply real estate brokerage services nor does it purchase such services. Rather it merely supplies firms in the relevant market with a computerized listing service. 13 Moreover, the alleged anticompetitive practices of the defendants were directed not at SSBR as an entity but at its member brokers. The complaint maintains that the defendants' intent was to exclude non-preferred brokers from the brokerage services market in Beverly Hills and Morgan Park. To make it more difficult for the non-preferred brokers to compete effectively, the defendants allegedly conspired and agreed not to list properties with SSBR so that it could no longer offer a comprehensive listing service to those brokers. In Bichan, this Court recognized that as a general rule suppliers of an injured customer may not seek recovery under the antitrust laws because their injuries are too indirect, secondary, or remote. 681 F.2d at 519-520. Of course the injury to SSBR as a supplier is slightly more subtle than the usual case where the supplier's injury takes the form of reduced demand for its goods or services due to the customer's weakened market position. Here the complaint alleges that the defendants took direct action against the supplier (SSBR) to reduce the value of its product (the MLS) to their competitors. Nevertheless, any injury which SSBR sustained by virtue of the defendants' alleged boycott of the MLS was only indirectly related and incidental to the anticompetitive scheme, the intent and effect of which was allegedly to gain control of the real estate brokerage services market in Beverly Hills and Morgan Park and thereby exclude SSBR member brokers. 14 Finally, if the non-preferred brokers have in fact been injured by the defendants' anticompetitive activities, their injuries would be direct and, as we will discuss infra in connection with Regan Corporation, they would have a right to maintain their own antitrust actions against the defendants. As the Supreme Court indicated in Associated General Contractors, 459 U.S. at 542, 103 S.Ct. at 910, [t]he existence of an identifiable class of persons whose self-interest would normally motivate them to vindicate the public interest in antitrust enforcement diminishes the justification for allowing a more remote party ... to perform the office of a private attorney general. Consequently, our conclusion that SSBR has suffered no antitrust injury and hence may not maintain an antitrust action under Sec. 4 of the Clayton Act is not likely to leave a significant antitrust violation undetected or unremedied. Id.
15 In addition to claiming that it has standing in its own right under Sec. 4, SSBR also contends that it has standing to seek injunctive relief under Sec. 16 of the Clayton Act on behalf of its member brokers. 2 A number of federal courts have recognized an association's standing to maintain an antitrust action seeking injunctive relief on behalf and as the representative of its members. See, e.g., Associated General Contractors v. Otter Tail Power Co., 611 F.2d 684, 690 (8th Cir.1979); Mission Hills Condominium Ass'n M-1 v. Corley, 570 F.Supp. 453, 457-458 (N.D.Ill.1983); National Office Machine Dealers Ass'n v. Monroe, The Calculator Co., 484 F.Supp. 1306, 1307 (N.D.Ill.1980). 3 For purposes of determining the standing of an association in a Sec. 16 action, these courts have resorted to traditional doctrines of associational standing. 16 In International Union, United Automobile, Aerospace and Agricultural Implement Workers of America v. Brock, 477 U.S. 274, 106 S.Ct. 2523, 2528, 91 L.Ed.2d 228, the Supreme Court noted that [i]t has long been settled that '[e]ven in the absence of injury to itself, an association may have standing solely as the representative of its members.'  (quoting Warth v. Seldin, 422 U.S. 490, 511, 95 S.Ct. 2197, 2211, 45 L.Ed.2d 343). The doctrine of associational standing set out in Warth v. Seldin was subsequently stated by the Court as a three-part test: 17 [A]n association has standing to bring suit on behalf of its members when: (a) its members would otherwise have standing to sue in their own right; (b) the interests it seeks to protect are germane to the organization's purpose; and (c) neither the claim asserted nor the relief requested requires the participation of individual members in the lawsuit. 18 Hunt v. Washington State Apple Advertising Comm'n, 432 U.S. 333, 343, 97 S.Ct. 2434, 53 L.Ed.2d 383. The Court reaffirmed these principles of associational standing in its recent opinion in Brock. 106 S.Ct. at 2533. 19 We do not believe that the second prong of the Hunt test has been satisfied. That prong requires that the interests the association seeks to protect by bringing suit be germane to the association's purpose. The alignment of the parties to this action, however, evidences a serious conflict in SSBR's interests. As SSBR concedes, at least three of the named real estate brokerage entity defendants are members of SSBR. Indeed what this suit amounts to is SSBR suing certain of its members on behalf of other of its members. If SSBR were permitted to pursue this action and were ultimately successful in obtaining the requested injunctive relief, its defendant members would without question be adversely affected and perhaps even seriously disadvantaged by the strictures of the injunction. That the remedy sought may directly affect certain members of SSBR gives rise to both actual and potential conflicts of interest among the members as a group, with the result being that their interests demand individual, not associational, representation. See Associated General Contractors v. Otter Tail Power Co., 611 F.2d 684, 690-691 (8th Cir.1979); Calvin v. Conlisk, 520 F.2d 1, 10-11 (7th Cir.1975), vacated on other grounds, 424 U.S. 902, 96 S.Ct. 1093, 47 L.Ed.2d 307, on remand, 534 F.2d 1251 (7th Cir.1976). As the Eighth Circuit concluded in Otter Tail, [the members'] status and interests are too diverse and the possibilities of conflict too obvious to make the association an appropriate vehicle to litigate the claims of its members. 611 F.2d at 691. 20 Because the interests which SSBR seeks to protect by maintaining this action do not reflect and are actually at odds with the interests of some of its members, they certainly cannot be said to be germane to SSBR's overriding purposes, and SSBR cannot invoke representational standing as a basis for suing the defendants. Moreover, we are also skeptical whether SSBR could meet the third part of the Hunt test in light of the Cargill decision requiring Sec. 16 plaintiffs to demonstrate the threat of antitrust injury. While the fact that SSBR's suit seeks injunctive relief and not damages substantially lessens the need for individual member participation, this action does not, as was the case in Brock, 106 S.Ct. 2523, present a pure question of law. Rather, establishing antitrust injury involves complex questions of fact and, given the allegations of the complaint, will require proof of actions taken by the defendants against individual SSBR members. For example, paragraph 40(b) of the amended complaint states that the defendants have agreed to boycott and not to do business with any broker who is not a 'preferred broker.'  Paragraph 40(d) states defendants have attempted to destroy and dilute the reputations and goodwill of plaintiffs [sic] brokers as to their competence, professionalism and ethical principles. Paragraph 40(f) states defendants have harassed, threatened, annoyed and attempted to intimidate plaintiffs and their members by falsely charging them with violations of various laws and by threatening to file sham lawsuits against them. Paragraph 40(g) states defendants have induced prospective sellers of real estate in the relevant market to breach their listing contracts with non-preferred brokers. Unlike National Office Machine Dealers Ass'n v. Monroe, The Calculator Co., 484 F.Supp. 1306 (N.D.Ill.1980), cited by SSBR, the complaint here does not attack an alleged policy of defendant[s] equally applicable and equally detrimental to all [SSBR] members, id. at 1307. We therefore think it likely that considering the nature of the antitrust injury alleged here, the claims asserted by SSBR would require the participation of individual members in the lawsuit.