In Re Realpage Inc Rental Software Antitrust Litigation No Ii

Key Facts

Issues

• This issue concerns the pleading requirements for establishing a conspiracy under Section 1 of the Sherman Act. The Court must determine whether Student Plaintiffs have adequately alleged that TREV participated in the alleged price-fixing conspiracy with RealPage beyond simply owning B.HOM Student Living. The Court examines whether the 'single enterprise' theory advanced by plaintiffs is supported by Sixth Circuit precedent and whether independent action by the parent company must be pleaded to establish liability.
• The central legal issue is whether Defendant TREV (Timberline Real Estate Ventures LLC) can be held liable under Section 1 of the Sherman Act for the alleged anticompetitive conduct of its wholly-owned subsidiary B.HOM Student Living without allegations of any independent action by TREV itself. Student Plaintiffs argue that under the 'single enterprise' doctrine derived from Copperweld Corp. v. Independence Tube Corp., parent companies should be liable alongside their wholly-owned subsidiaries for anticompetitive conduct. The Court must determine if mere ownership is sufficient to establish liability, or if plaintiffs must plead independent participation by the parent company in the alleged conspiracy.

Holdings

Remedies

Legal Principles

• The court applies the Copperweld Corp. v. Independence Tube Corp. single enterprise doctrine, which holds that coordinated activity of a parent and its wholly-owned subsidiary must be viewed as that of a single enterprise for purposes of Section 1 of the Sherman Act. However, this doctrine does not eliminate the requirement that plaintiffs allege facts showing the parent company acted in furtherance of the conspiracy. The court distinguishes this from cases where the subsidiary's anticompetitive conduct is undisputed and the issue is whether the subsidiary had knowledge of the parent's scheme.
• To hold a parent corporation liable under Section 1 of the Sherman Act for its subsidiary's anticompetitive conduct, a plaintiff must plead and prove independent action by the parent company beyond mere ownership. While the Copperweld doctrine treats parent and wholly-owned subsidiary as a single enterprise for antitrust purposes, courts in the Sixth Circuit require evidence that each defendant independently participated in the enterprise's scheme. Mere corporate relationship does not implicate a parent in its subsidiary's actions, and plaintiffs cannot substitute their burden to plead independent anticompetitive conduct with an allegation of corporate ownership alone.

Precedent Name

• Cupp v. Alberto-Culver USA, Inc., 310 F. Supp. 2d 963 (W.D. Tenn. 2004)
• LenoxMacLaren Surgical v. Medtronic, Inc., 847 F.3d 1221 (10th Cir. 2017)
• United States v. Bestfoods, 524 U.S. 51, 61 (1998)
• Dakota Girls, LLC v. Philadelphia Indem. Ins. Co., 17 F.4th 645, 648 (6th Cir. 2021)
• Arandell Corp. v. Centerpoint Energy Services, Inc., 900 F.3d 623 (9th Cir. 2018)
• Jones v. Varsity Brands, LLC, 618 F. Supp. 3d 713, 723 (W.D. Tenn. 2022)
• Copperweld Corp. v. Independence Tube Corp., 467 U.S. 752, 771 (1984)
• Ashcroft v. Iqbal, 556 U.S. 662, 678 (2007)

Cited Statute

• Sherman Act Section 1
• Sherman Act Section 2
• Federal Rule of Civil Procedure 8(a)(2)

Judge Name

Passage Text

• Student Plaintiffs concede that the Sixth Circuit has not adopted an approach to Sherman Act liability that allows them to hold parent companies liable without pleading any independent conduct. Indeed, courts in this Circuit hold that 'While application of Copperweld requires viewing the [parent company] as a joint enterprise with [its wholly owned subsidiary], a plaintiff asserting a § 1 or § 2 claim under the Sherman Act must still provide evidence that each defendant independently participated in the enterprise's scheme, to justify holding that defendant liable as part of the enterprise. This involvement must be more than mere ownership.' Jones v. Varsity Brands, LLC, 618 F. Supp. 3d 713, 723 (W.D. Tenn. 2022) (quoting Arandell, 900 F.3d at 631).
• TREV's motion argues that Student Plaintiffs have not alleged any conduct on its part in furtherance of the alleged conspiracy. (Doc. No. 579 at 3). Student Plaintiffs ask the Court to ascribe B.HOM's conduct to TREV. But they have not adequately alleged any facts to advance such an inference, as the plaintiffs did in Arandell. In short, there are no factual allegations that TREV acted in furtherance of the conspiracy or that it did anything to accomplish B.HOM's alleged anticompetitive conduct. Applying Arandell's analysis, the Student Complaint fails to state a claim.
• Because Student Plaintiffs have not alleged any independent conduct in the conspiracy by TREV, their claims against TREV must be dismissed.