Opinion ID: 763285
Heading Depth: 1
Heading Rank: 4

Heading: realty one's counterclaims

Text: 140 Realty One maintains that the district court erroneously dismissed five of its counterclaims. To reiterate, Realty One has charged Re/Max with (1) conspiring to monopolize the northeast Ohio real-estate market by combin[ing] their financial and other resources to work unlawfully in concert against local real estate brokers, (2) conspiring to unreasonably restrain trade by agreeing not to recruit other Re/Max agents, (3) conspiring to offer 50/50 commission splits in cooperative transactions with other brokerages, (4) interfering in Realty One's business relationships with its customers and agents in violation of Ohio state law, and (5) engaging in unfair competition by bringing sham litigation, also in violation of Ohio law.
141 and 2 Antitrust Counterclaims 142 Certainly, the district court's rulings dismissing Realty One's three antitrust issues, (1), (2), and (3) above, must be affirmed. First, the district court dismissed the conspiracy to monopolize claim because Realty One had failed to define the relevant geographic markets. In the district court, Realty One relied on the same market definition used by Re/Max. Its argument on appeal is that, if the markets defined by Re/Max are valid for Re/Max's § 2 claims, they must be valid for Realty One's counterclaims. However, we have found that Re/Max had failed to meet its burden in this regard, which correspondingly precludes Realty One's § 2 counterclaim. Unlike Re/Max, Realty One has not alleged or shown any actual effect on prices or competition resulting from Re/Max's alleged anticompetitive conduct that would save Realty One's failure to define the geographic markets. 143 Second, the district court dismissed Realty One's claim that Re/Max franchises had illegally agreed not to recruit each other's agents, reasoning that Realty One had not sustained an antitrust injury from this conduct. We agree. Even assuming, as we must, that Re/Max did so conspire, the conspiracy would have no anticompetitive effect on Realty One's ability to retain and recruit successful agents. In particular, Realty One alleges that Re/Max franchises conspired to set the commissions for its agents at 95 to 100%, and that they agreed to target only non-Re/Max agents for recruitment. Absent an allegation that Re/Max has market dominance, the only possible way that these conspiracies could have an unreasonable effect on commerce is if the national Re/Max network shifted resources into northeast Ohio to absorb a short-term loss so that Re/Max could gain a long-term monopoly. However, as we have said, this theory is logically flawed: Re/Max's 100% Concept is required of all franchises throughout the country; if it were economically unfeasible, there would be no national network from which to draw. 144 What remains of Realty One's counterclaim does not state an antitrust violation regarding the supply or the demand for agents. As for demand, Realty One's argument is inherently contradictory. On the one hand, Realty One maintains that Re/Max entices Realty One's agents with the promise, whether accurate or not, of higher compensation. This would increase demand for agents. On the other hand, Realty One contends that Re/Max agrees to limit intra-Re/Max competition, thereby depressing demand for experienced agents. If Re/Max has increased demand, there is no antitrust injury because increased competition does not offend the antitrust laws. If Re/Max has decreased demand, then Realty One is benefitted and has sustained no injury at all. 145 Realty One also seems to argue that Re/Max's conspiracy decreases agent supply. However, while Re/Max franchises may have intentionally reduced the pool of agents that they will recruit, nothing prevents Realty One from recruiting any agent in the market. In other words, nothing Re/Max does, save offering seemingly greater compensation for successful agents, hinders Realty One from retaining its own agents or obtaining new agents from other brokerages. 146 Third, Realty One's final antitrust counterclaim--that Re/Max franchises conspired with each other and with the franchisors to set cooperative commission rates at 50/50--is also legally insufficient. As we have said, setting cooperative sales-commission rates is not price fixing: it has no relation to the amount charged to clients for an agent's services. Thus, FTC v. Superior Court Trial Lawyers Association, 493 U.S. 411, 110 S.Ct. 768, 107 L.Ed.2d 851 (1990), is inapplicable. Rather, cooperative rates constitute incentives for non-listing agents to show the listed property. We found that Re/Max has made out a jury-submissible claim that Realty One's and Smythe Cramer's 147 70/30 and 75/25 splits constitute a boycott of Re/Max's agents, and that the policy was illegal because it was backed by the defendants' market dominance. Here, however, there is no allegation that Re/Max possesses monopoly power, or that its traditional 50% cooperative commission rate has an unreasonable effect on commerce. The fact that Re/Max franchises agree to adhere to the going rate cannot, under these circumstances, constitute an antitrust violation. 148
149 First, Realty One claims that Re/Max personnel repeatedly told Realty One's clients that the adverse-splits policy would hurt their chances of selling their homes, and told Realty One's sales people that the policy thereby harmed them as well. Realty One maintains that these false and maliciously wrongful attacks constitute unfair competition and malicious interference with business relations under Ohio law. The district court dismissed the claim because Realty One provided no evidence of any agent or customer with whom Re/Max had interfered. Although it acknowledges this failure, Realty One contends that the difficulty in demonstrating which customers and which sales agents were lost as a result of the allegedly unlawful conduct is precisely why Realty One sought and should receive injunctive protection rather than damages. However, absent the identification of any irreparable harm, this counterclaim must fail. 150 Second, Realty One claims that Re/Max engaged in malicious litigation, and points to the same evidence that the district court found supported Realty One's antitrust sham-litigation claim. Realty One cites Water Management, Inc. v. Stayanchi, 15 Ohio St.3d 83, 472 N.E.2d 715 (1984). That case, however, has nothing to do with malicious litigation, except for the fact that the court mentions in passing that malicious litigation is one form of unfair competition. See id. at 717. Robb v. Chagrin Lagoons Yacht Club, Inc., 75 Ohio St.3d 264, 662 N.E.2d 9 (1996), on the other hand, sets out the elements of malicious civil prosecution. One requirement is that the plaintiff's person or property have been seized during the course of the prior proceedings. See id. at 13. This element has not been alleged by Realty One. Thus, Realty One's state-law claims were also properly dismissed.