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Hackman v. Dickerson Realtors

October 22, 2010


The opinion of the court was delivered by: Elaine E. Bucklo United States District Judge


Currently pending in this now familiar case are the summary judgment motions of the only remaining defendants: Dickerson Realtors, Michael Dunn, Frank Wehrstein, Lori Reavis, and Frank Sheley, five real estate brokers or agents alleged to have engaged in an anti-competitive scheme to drive plaintiffs out of the Rockford, Illinois real estate market. I have issued three previous opinions in this case, all prior to discovery, paring down the parties and the scope of the claims. See Hackman v. Dickerson Realtors, Inc., 520 F. Supp. 2d 954 (N.D. Ill. 2007) ("Hackman I"); Hackman v. Dickerson Realtors, Inc., 557 F. Supp. 2d 938 (N.D. Ill. 2008) ("Hackman II"); and Hackman v. Dickerson Realtors, Inc., 595 F. Supp. 2d 875 (N.D. Ill. 2009) ("Hackman III") (all granting various motions to dismiss in whole or in part).*fn1 The present motions contend that the evidence revealed during discovery is insufficient to raise any triable issue with respect to plaintiffs' claims that the remaining defendants violated the Sherman Act and the Illinois State Antitrust Act (counts I and II); that they defamed plaintiffs (count V); or that they committed tortious interference with plaintiffs' business expectancy and contract (count VI). Because I agree with defendants that they are entitled to judgment on these claims, this unusually drawn out case has now reached its denouement.

Plaintiffs (sometimes referred to collectively as "Hackman") assert that defendants engaged in concerted, anticompetitive behavior beginning sometime in 1999 and continuing through the filing of Hackman's second amended complaint on September 25, 2008. Hackman's premise is that defendants were disgruntled over advertisements plaintiffs began running in 1999, which offered to charge commission rates in the five percent range to prospective sellers, since the advertised rates were lower than the "going rates" charged by defendants of six or seven percent. Hackman claims that in 1999, defendants formed an illegal agreement to punish Hackman for offering these lower commission rates and undertook joint efforts to put Hackman out of business. These efforts included: threats by defendant Dickerson to pay a one percent commission "split" to Hackman in any transaction in which Hackman represented the buyer of a Dickerson-listed property, regardless of the "split" advertised for that property;*fn2 "boycotting" Hackman generally, including denying Hackman's agents access to Dickerson-listed properties from March 5-8, 2004; filing, or threatening to file, frivolous ethics complaints against Hackman before the Rockford Area Association of Realtors; and making false, disparaging remarks to Hackman's clients or potential clients.


Summary judgment should be granted "if there is no genuine issue of material fact and the moving party is entitled to a judgment as a matter of law." Chaklos v. Stevens, 560 F.3d 705, 710 (7th Cir. 2009) (quoting Fed. R. Civ. P. 56(c)). Under Rule 56(c), the moving party bears the initial burden of pointing to the portions of the record that demonstrate an absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). If the movant carries this burden, the non-movant must then identify specific facts showing that there is a genuine issue for trial. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). The non-movant "must do more than simply show that there is some metaphysical doubt as to the material facts." Id. at 586. One commonsense formulation of the ultimate question on summary judgment is this: "[i]f a sensible jury could find in favor of the party opposing the motion, then summary judgment must be denied." Gordon v. United Airlines, Inc., 246 F.3d 878, 896 (7th Cir. 2001). Only evidence that would be admissible at trial may be considered. Haywood v. Lucent Technologies, Inc., 323 F.3d 524, 533 (7th Cir. 2003).

A. Antitrust Claims (Counts I and II)

Hackman's antitrust claims assert violations of Sections 1 and 2 of the Sherman Act and the corresponding sections of the Illinois Antitrust Act.*fn3 Before proceeding to Hackman's Section 1 claim, which requires a more nuanced analysis, I pause briefly to dispose definitively of plaintiffs' Section 2 claim. Although this claim narrowly squeaked by dismissal on two previous occasions (in both Hackman II and Hackman III, I observed that construing the complaint to state a Section 2 claim at all was "based on a particularly generous reading of plaintiffs' allegations," 595 F. Supp. 2d at 897), there is no question that Hackman has failed to identify sufficient evidence to withstand summary judgment. Section 2 of the Sherman Act makes it unlawful to "monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize" interstate commerce. 15 U.S.C. § 2. None of the iterations of plaintiffs' complaint makes clear which of the several acts prohibited by Section 2 is alleged. Nevertheless, I previously construed Hackman's claim to assert a conspiracy to monopolize, and explained that this claim required proof of "1) the existence of a combination or conspiracy, 2) overt acts in furtherance of the conspiracy, 3) an effect upon a substantial amount of interstate commerce and 4) the existence of specific intent to monopolize." Hackman I, 520 F. Supp. 2d at 964 (quoting Great Escape, Inc. v. Union City Body Co., Inc., 791 F.2d 532, 540-41 (7th Cir. 1986)) There is no question that the record is barren of any evidence of the third or fourth of these elements.

But it now appears from plaintiffs' undeveloped citation to Endsley v. City of Chicago, 230 F.3d 276 (7th Cir. 2000),*fn4 that they seek to proceed not on a conspiracy-to-monopolize theory, but instead on the theory that one or more defendants individually possessed unlawful monopoly power. Construed in this fashion, however, there is no shortage of bases on which to reject plaintiffs' claim. In fact, such a claim undoubtedly would not have survived a motion to dismiss, since Hackman alleged only that defendants' collective market share afforded them monopoly power, not that any individual defendant possessed such power. Hackman did allege that defendant Dickerson listed "approximately fifty percent of the properties on the market at any one time." But market share alone is "an insufficient indicator of a company's capacity to control prices and exclude competitors," Lektro-Vend Corp. v. Vendo Co., 660 F.2d 255, 271 (7th Cir. 1981), and in any event, this statistic makes no reappearance in plaintiffs' Rule 56.1 statements or supporting evidence. Moreover, Hackman offers no response to Dickerson's observation that Hackman's own market share was so minimal that even Dickerson's unlawful acquisition of that share (and there is no claim that Dickerson sought to swallow up any other competitors) would have no meaningful effect on competition, and therefore would not violate § 2 of the statute. For at least these reasons, plaintiffs have raised no genuine issue on their theory of unlawful monopoly, and defendants are entitled to judgment on counts I and II to the extent they assert claims under Section 2 of the Sherman Act and corresponding provisions of the Illinois Antitrust Act.

Proceeding to Hackman's Section 1 claim, I have previously noted that a successful claim under this provision "requires proof of three elements: (1) a contract, combination, or conspiracy; (2) a resultant unreasonable restraint of trade in the relevant market; and (3) an accompanying injury." Hackman II, 595 F. Supp. 2d at 878 (internal quotations and citations omitted). The precise contours of Hackman's Section 1 claim are not clear. While defendants characterize the claim as a "conspiracy to boycott," and indeed, plaintiffs have at times used these terms to describe the alleged conspiracy, Hackman insists that the conspiracy was broader than merely an agreement to boycott Hackman. Hackman argues that defendants' agreement was to "ruin" Hackman, and that the illegal boycott---though itself a per se violation of the statute--was only one of several means to this end.

Whether the alleged boycott is the alpha and omega of plaintiffs' claim, or merely one act among others in a broader anticompetitive scheme, the "group boycott" is clearly central to Hackman's theory of liability. It is problematic, then, that the undisputed facts reveal sales by Hackman of properties listed by defendant Dickerson in every year of the alleged boycott, as well as sales by defendants of Hackman-listed properties in every year through 2006. Indeed, Hackman acknowledges that Dickerson sold 5% of Hackman's total listings in 2004, 7% of Hackman's total listings in 2005, and 9% of Hackman's total listings in 2006. These statistics are flatly inconsistent with plaintiffs' claim that defendants refused to deal with them during this period. Unable to dispute these figures, Hackman lamely speculates that a single, rogue Dickerson agent "did not get or listen to the policy" of refusing to deal with Hackman. Notably, however, Hackman points to nothing in the record to support this interpretation. No sensible jury could conclude that defendants engaged in a "group boycott" spanning the 1999-2008 period.

But Hackman also alleges a specific "boycott" from March 5-8, 2004. While it is undisputed that Hackman's agents were unable to show any properties listed by Dickerson during that time, defendants offer evidence that defendant Dunn---pursuant to whose orders Hackman was excluded from Dickerson's listings--acted independently in Dickerson's own interest.*fn5 Accordingly, to fend off summary judgment, plaintiffs must counter with evidence "'that tends to exclude the possibility' that the alleged conspirators acted independently." Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 588 (1986). But plaintiffs identify no evidence to suggest that any alleged co-conspirator was even aware that Dickerson had excluded Hackman from its properties, much less that they jointly agreed to exclude Hackman. The undisputed evidence is that defendant Dunn directed the local Dickerson offices not to set up appointments with Hackman over those days, and that at some point, defendant Wehrstein became aware of the directive and put an end to it. There is not even a hint of evidence that Dunn discussed the directive with any defendant other than Wehrstein, who evidently did not agree with it.

So there was no group boycott, either general or specific. If this conclusion is not the nail in the coffin of plaintiffs' conspiracy claim, there are plenty of others. Hackman's only direct evidence of an agreement among defendants is Gregory Hackman's testimony that defendant Wehrstein told him, in the company of other local realtors at a RAAR event in 1999, "[l]ook, we have been talking, and you're going to stop taking listings at 5%...[otherwise] we're going to boycott you," and that five years later, Wehrstein told him, "[w]e're going to put the full court press on now...I'm going to have you expelled from the Rockford Area Association of Realtors, we're going to have you expelled." Yet, as discussed above, no boycott ever materialized, and Hackman does not identify a single anticompetitive act allegedly taken by Wehrstein or any other defendant between 1999 and 2004. Indeed, Hackman admits that his business flourished during this period, when even his transactions with the alleged co-conspirators increased. Whatever Wehrstein might have meant by the statement he allegedly made in 2004, Hackman points to no evidence that Wehrstein or any other co-conspirator took any action in furtherance of any agreement to have Hackman "expelled" from RAAR.*fn6

On Hackman's history of consummated transactions with defendants, Hackman appears to be of two minds. Hackman first insists that "the numbers speak for themselves," but then accuses defendants, in the very next breath, of "spinning the numbers" to obscure their unlawful conduct. In particular, Hackman points to a drop-off in business between Hackman and Dickerson after 2006 as proof that "once Hackman started getting too successful," defendants' illegal efforts began "in earnest." But this argument deserves no serious consideration. No sensible jury could believe, based on these statistics, that a boycott that allegedly began in 1999, then lay entirely dormant until 2004 (the year in which essentially all of the acts claimed to be in furtherance of the conspiracy occurred, but in which Hackman's business with defendants nevertheless reached its peak), somehow caused plaintiffs' business to plummet only in 2007, despite the conspiracy's apparent return to dormancy for all of 2005 and 2006. In addition, the evidence on which Hackman relies to implicate defendants Dunn and Reavis in the putative conspiracy is plainly insufficient to withstand summary judgment. As evidence of defendant Dunn's participation in the alleged scheme, Hackman cites (in addition to his role in the "boycott" of March 5-8, 2004, discussed above), Dunn's drafting of the so-called "one percent letter," and Dunn's alleged threat--which Hackman admits was never carried out--to file an ethics complaint against Hackman if he did not raise his commission rates. But like the events of March 5-8, 2004, the one-percent letter appears to have been an independent act taken on Dickerson's behalf, in furtherance of Dickerson's individual interests, and without the knowledge of any other co-conspirator. Moreover, as I have noted previously, the governing professional rules appear not only to allow but indeed to require that such a letter be sent under the circumstances alleged here, undercutting any plausible inference that the letter was sent pursuant to an anticompetitive agreement. In any event, Hackman admits that the letter was never "enforced," i.e., Hackman agents all ultimately received the advertised "split" on the sale of Dickerson listings.*fn7 Dunn's alleged threat to file frivolous ethics complaints likewise rings hollow, since Dunn had only a minor role in the only ethics complaint actually filed (by Reavis), and the decision in that proceeding belies the claim that it was "frivolous."

With respect to Reavis, Hackman relies on the ethics complaint and on evidence that Reavis discussed entering into a listing agreement with a client of Hackman's as evidence of her agreement in the alleged conspiracy. But these facts cannot support the weight of the inference with which Hackman freight them. Hackman acknowledges that the transaction giving rise to Reavis's ethics complaint was fraught with antagonism on both sides, and the evidence is that her complaint against Hackman was in good faith, and, indeed, at least partially meritorious. ...

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