Case 8:12-cv-00954-DKC Document 239 Filed 11/01/13 Page 1 of 18
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF MARYLAND
`SOUTHERN DIVISION
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`MEMORANDUM OPINION
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`
`AMERICAN HOME REALTY NETWORK,
`INC., et al.,
`Defendants.
`
`and
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`AMERICAN HOME REALTY NETWORK,
`INC.,
` Counterclaim Plaintiff,
`
`
`
` v.
`
`
`METROPOLITAN REGIONAL
`INFORMATION SYSTEMS, INC., et al.,
` Counterclaim Defendants.
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`Pending before the Court are Counterclaim-Defendants Metropolitan Regional
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`Information Systems, Inc. (“MRIS”) and National Association of Realtors (“NAR”)’s Motions to
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`Dismiss the Second Amended Counterclaims of American Home Realty Network, Inc.
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`(“AHRN”). The procedural background of this case has been covered in extensive detail in the
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`Court’s prior Memorandum Opinions, which are incorporated by reference herein. See Doc.
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`Nos. 34, 64, 159, 184, and 186. On June 10, 2013, the Court granted-in-part and denied-in-part
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`MRIS’s Motion to Dismiss or Summarily Adjudicate AHRN’s First Amended Counterclaims
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`and granted-in-part and denied-in-part NAR’s Motion to Dismiss AHRN’s First Amended
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`Counterclaims. Doc. Nos. 159-160. The Court dismissed Counts I, V, VI, and VII of the First
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` 
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`1
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`
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`Civil Action No. 12-cv-00954-AW
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`METROPOLITAN REGIONAL
`INFORMATION SYSTEMS, INC.,
` Plaintiff,
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`
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` v.
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`

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`Case 8:12-cv-00954-DKC Document 239 Filed 11/01/13 Page 2 of 18
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`Amended Counterclaims with prejudice. The Court also dismissed Counts II, III, and IV—
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`which alleged unfair competition under Maryland law and California law as well as violations of
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`§ 1 of the Sherman Act—without prejudice, and granted AHRN leave to file second amended
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`counterclaims. Because the Court decided MRIS’s Motion under Rule 12(b)(6), not Rule 56, it
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`denied as moot AHRN’s Motion to Strike the Charron Declaration and request for discovery.
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`AHRN timely filed its Second Amended Counterclaims on June 24, 2013. Doc. No. 167.
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`MRIS and NAR moved to dismiss these claims with prejudice pursuant to Rule 12(b)(6). Doc.
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`Nos. 181, 193. These Motions are now fully briefed and ripe for the Court’s consideration.
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`Based upon its careful review of the Second Amended Counterclaims and motion papers, the
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`Court has determined that it must reconsider a determination from its June 10 Opinion and
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`Order. Although the Court previously held that AHRN had failed to state a claim for fraud on
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`the Copyright Office, it now recognizes that to grant MRIS’s Motion to Dismiss, it would be
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`required to rely on evidence outside the pleadings—specifically, the declaration of MRIS CEO
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`David Charron that MRIS uses its own proprietary software, not CoreLogic, to arrange content
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`on the MRIS Database. See Doc. No. 88-1 ¶ 14. As such, MRIS’s Motion must be treated as
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`one for summary judgment under Rule 56. See Fed. R. Civ. P. 12(d). Accordingly, the Court
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`will reserve ruling on MRIS’s Motion with respect to Count II (Maryland unfair competition)
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`and Count IV (Sherman Act § 1) and will grant AHRN an opportunity, if it wishes, to conduct
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`limited discovery on this issue. However, the Court will grant MRIS’s Motion to Dismiss Count
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`III (California unfair competition), as the Second Amended Counterclaims fail to cure the
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`deficiencies identified in the Court’s June 10 Opinion.
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`As for AHRN’s claims against NAR, the Court has determined that the Second Amended
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`Counterclaims are sufficient to survive NAR’s Motion to Dismiss Counts II and IV. However,
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`Case 8:12-cv-00954-DKC Document 239 Filed 11/01/13 Page 3 of 18
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`AHRN has failed to state a claim against NAR under California law, and Count III will be
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`dismissed with prejudice.
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`I.
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`FACTUAL ALLEGATIONS IN SECOND AMENDED COUNTERCLAIMS
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`As before, the crux of AHRN’s claims is that MRIS, NAR, and unnamed Does engaged
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`in a series of concerted, anti-competitive conduct, including the industry-wide adoption of a
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`sham copyright registration and enforcement program and refusals to deal with AHRN. Many of
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`the factual allegations from the Second Amended Counterclaims restate the allegations from the
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`First Amended Counterclaims. These allegations were thoroughly documented in the Court’s
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`June 10, 2013 Opinion and will not be repeated here. However, the Court will briefly outline the
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`new, relevant allegations from the Second Amended Counterclaims.
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`
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`A.
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`“Work for hire” representations in copyright registrations and related allegations
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`AHRN alleges that MRIS, NAR, and other MLSs, pursuant to their fraudulent Copyright
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`Program, misrepresented in their applications to the United States Copyright Office that their
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`copyrighted content constituted “works for hire.” Id. ¶ 36. AHRN cites statements from the
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`2005 and 2006 versions of the Guidance Paper which urged MLSs to claim that the copyrighted
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`works (i.e., photographs and text) in their electronic databases were works for hire by MLS
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`employees. Id. ¶¶ 76-77. NAR allegedly conspired in the scheme when it urged MLSs to adopt
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`the practice of making false work for hire statements to the Copyright Office in their compilation
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`copyright applications. Id. ¶¶ 70, 78-79. Numerous MLSs followed suit throughout 2006 and
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`2007 by making such statements. Id. ¶ 79.
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`
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`AHRN alleges that the work for hire statements are false because MLS employees do not
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`take the photographs of residential real estate properties listed in their databases and the MLSs
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`do not specially commission photographers to take such photographs. Id. ¶ 80. AHRN further
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`Case 8:12-cv-00954-DKC Document 239 Filed 11/01/13 Page 4 of 18
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`alleges that the work for hire statements are false because the employees of MRIS and other
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`MLSs do not author the text describing the real estate listed in the databases, nor do they
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`specially commission others to author the text. Id. ¶ 81. Such representations allegedly
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`concealed the fact that MRIS and other MLSs do not maintain records of the photographer, date
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`of creation, and copyright assignment records and/or proof of ownership for the photographic
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`images in the databases. Id. ¶¶ 36, 82-84. AHRN further maintains that the agent who uploads
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`the listing photographs and text does not own the copyrights to those works, and that any
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`recordkeeping on the part of MRIS and other MLSs with respect to the content in their databases
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`is ineffective to transfer purported copyright in that content without a written assignment signed
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`by the owner of the listed property. Id. ¶ 84. AHRN also alleges that MRIS does not own the
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`text in the MRIS Database pursuant to Section 4.5 of its Subscriber License and Access
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`Agreement. Id. ¶¶ 87, 119.
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`B.
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`NAR’s “direct competition” with AHRN
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`
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`In March 2013, NAR entered the real estate agent evaluation and ranking market in
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`“direct competition” with AHRN through pilot projects with Realtor associations in Illinois,
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`Minnesota, California, Colorado, and Georgia. Id. ¶ 154. According to AHRN, the pilot
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`projects are “further evidence of predation by the NAR-led conspiracy to drive AHRN out of the
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`agent evaluation and ranking market.” Id. NAR offers its rating service free of charge in return
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`for an e-mail address of the customer. Id. ¶ 155. AHRN alleges that such service is evidence of
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`“below cost, predatory pricing to drive AHRN out of the market.” Id. AHRN also alleges that
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`the rating service was announced by NAR General Counsel Laurene Janik, the same individual
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`who spearheaded the sending of cease-and-desist letters to AHRN and who led the charge in
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`urging members to repudiate already-entered referral agreements with AHRN or to refrain from
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`Case 8:12-cv-00954-DKC Document 239 Filed 11/01/13 Page 5 of 18
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`entering such agreements with AHRN. Id. ¶ 156. AHRN asserts that such a product rollout is
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`“not the traditional role of general counsel.” Id.
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`
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`AHRN further claims that NAR’s ratings service is “a ruse for NAR and its members to
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`suppress legitimate evaluation and ranking of agents for the benefit of consumers.” Id. ¶ 157.
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`Whereas AHRN’s evaluation and ranking is unbiased and algorithm-based, NAR’s service
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`depends upon the sending of customer satisfaction surveys to clients of participating brokerages.
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`Id. Such an approach helps realtors “own the process” in an industry where real estate agent
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`ratings are typically feared. Id.
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`
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`C.
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`Additional refusals to deal with AHRN
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`In the spring of 2013, with NAR now directly competing with AHRN in the market for
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`real estate agent evaluations, NAR encouraged regional boards of realtors to prevent their
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`member agents from entering referral agreements with AHRN, to breach or repudiate agreements
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`already entered, and to demand that their names be stricken from AHRN’s list of potential
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`referral agents. Id. ¶ 112. AHRN cites numerous, specific examples of local realtors from across
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`the country who refused to deal with AHRN at either the direction of their local MLSs or NAR
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`itself. Id. ¶¶ 113-116. AHRN also cites what appears to be a related provision from the NAR
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`MLS Handbook which allegedly requires NAR’s members to notify NAR whenever they are
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`confronted with requests or demands for access to the local multiple listing service:
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`In states other than California, Georgia, Alabama, and Florida, whenever an
`association is confronted with a request or demand by an individual for access to
`the association’s multiple listing service without membership in the association,
`member associations are advised that the association should immediately advise
`both the state association and the Member Policy Department of the National
`Association, and the recommended procedures will be provided to the member
`association with any other pertinent information or assistance. It is important that
`the state association and National Association be advised immediately if such
`request or demand for access to the association MLS as described is received.
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`Case 8:12-cv-00954-DKC Document 239 Filed 11/01/13 Page 6 of 18
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`Id. ¶ 117.
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`D.
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`New allegations of anti-competitive effects
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`AHRN alleges that viewed as a whole, Counterclaim-Defendants’ conduct was intended
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`to and did have anti-competitive effects on AHRN and on consumers in the market for real estate
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`brokerage referral services. Id. ¶ 170. In addition to the anti-competitive effects already
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`identified in the First Amended Counterclaims, AHRN now alleges that Counterclaim-
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`Defendants’ conduct has resulted in the following anti-competitive effects: suppressing
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`technological innovation, reducing competition on price and quality, restricting efficient
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`cooperation among brokers, making express or tacit collusion more likely, and raising barriers to
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`entry. Id. ¶¶ 170-71. AHRN alleges that “[i]f NAR, MRIS and Doe Defendants hadn’t restricted
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`innovative brokerages such as Redfin, AHRN, and others from competing in MLS Service
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`Area[s], these brokerages would have provided customers of real-estate brokerage services with
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`competitive options and, in the process, placed downward pressure on the prices charged by
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`defendants, who offer traditional methods of providing real-estate-brokerage services.” Id.
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`¶ 172. According to AHRN, “NAR is making the real estate market less efficient by depriving
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`the consumer of the ability to select the most qualified agents for their Deal, thereby driving up
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`brokerage services costs and reducing the return for consumers and market liquidity.” Id. ¶ 201.
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`II.
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`STANDARD OF REVIEW
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`The purpose of a motion to dismiss under Rule 12(b)(6) is “to test the sufficiency of [the]
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`complaint.” Edwards v. City of Goldsboro, 178 F.3d 231, 243 (4th Cir. 1999). Except in certain
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`specified cases, the complaint need only satisfy Rule 8(a) of the Federal Rules of Civil
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`Procedure, which requires a “short and plain statement of the claim showing that the pleader is
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`entitled to relief.” Fed. R. Civ. P. 8(a)(2). A plaintiff must plead “enough facts to state a claim
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`Case 8:12-cv-00954-DKC Document 239 Filed 11/01/13 Page 7 of 18
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`to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). In
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`resolving a motion to dismiss, the Court should proceed in two steps. First, the Court should
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`determine which allegations in the Complaint are factual allegations entitled to deference, and
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`which are mere legal conclusions that receive no deference. See Ashcroft v. Iqbal, 556 U.S. 662,
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`678–79 (2009). “Threadbare recitals of the elements of a cause of action, supported by mere
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`conclusory statements, do not suffice.” Id. at 678. Second, “[w]hen there are well-pleaded
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`factual allegations, a court should assume their veracity and then determine whether they
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`plausibly give rise to an entitlement to relief.” Id. at 679.
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`In its determination, the Court must “accept the well-pleaded allegations of the complaint
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`as true,” Albright v. Oliver, 510 U.S. 266, 268 (1994), and “must construe factual allegations in
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`the light most favorable to the plaintiff,” Harrison v. Westinghouse Savannah River Co., 176
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`F.3d 776, 783 (4th Cir. 1999). The Court should not, however, accept unsupported legal
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`allegations, Revene v. Charles Cnty. Comm’rs, 882 F.2d 870, 873 (4th Cir. 1989), “legal
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`conclusion[s] couched as . . . factual allegation[s],” Papasan v. Allain, 478 U.S. 265, 286 (1986),
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`or conclusory factual allegations devoid of any reference to actual events, United Black
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`Firefighters of Norfolk v. Hirst, 604 F.2d 844, 847 (4th Cir. 1979). “Factual allegations must be
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`enough to raise a right to relief above the speculative level . . . on the assumption that all the
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`allegations in the complaint are true (even if doubtful in fact).” Twombly, 550 U.S. at 555.
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`III. CLAIMS AGAINST MRIS
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`In its June 10 Opinion and Order, the Court held that MRIS was entitled to Noerr-
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`Pennington immunity from AHRN’s antitrust claims “to the extent they are based on the filing of
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`this litigation and the incidents of that litigation.” Doc. No. 159 at 28. The Court rejected
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`AHRN’s argument that MRIS was not entitled to immunity on the grounds that they committed
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`Case 8:12-cv-00954-DKC Document 239 Filed 11/01/13 Page 8 of 18
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`fraud on the Copyright Office in registering their compilation copyrights. Specifically, the Court
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`ruled that none of the alleged misrepresentations identified by AHRN set forth a plausible claim
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`of fraud on the Copyright Office. Id. at 26-27. With respect to the remaining factual allegations
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`against MRIS—in particular, its alleged refusals to deal with AHRN—the Court concluded that
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`AHRN had failed to plead the time, place and contours of any agreement in restraint of trade on
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`the part of MRIS, and had not plausibly alleged that competition in general was harmed as a
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`result of MRIS’s conduct. Id. at 30-36.
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`In an attempt to state a claim that MRIS committed fraud on the Copyright Office,
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`AHRN now asserts in its Second Amended Counterclaims that MRIS’s work for hire
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`designations in its compilation copyright applications were false because, inter alia, MRIS
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`employees do not take the photographs of the properties or author the text in the MRIS Database
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`and MRIS did not specially commission individuals to take the photographs or author the text.
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`Doc. No. 167 ¶¶ 76-77, 80-81. AHRN further asserts that MRIS’s work for hire representations
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`concealed the fact that MRIS lacks records establishing its ownership of the photographic images
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`in the database. Id. ¶¶ 82-84.1
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`
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`AHRN made virtually identical arguments in support of its June 6, 2013 Motion to
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`Vacate the preliminary injunction. Doc. No. 155. The Court summarily rejected these
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`arguments in a July 31, 2013 Memorandum Opinion and Order, reasoning as follows:
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`AHRN appears to misapprehend that MRIS’s copyright registrations, including
`the “work made for hire” designation, apply to the MRIS Database as a whole.
`Indeed, collective works such as the MRIS Database may be works made for hire.
`See Compendium II of Copyright Office Practices § 308.02 (“The collective work
`                                                            
`1 AHRN also asserts that the purpose of MRIS’s false work for hire statements “is to obviate the requirement to list
`photographers and authors” on its copyright registrations. Doc. No. 167 ¶ 82. This argument has already been
`rejected by this Court and by the Fourth Circuit Court of Appeals. Doc. No. 34 at 19-21; Doc. No. 180-1 at 19-20.
`AHRN also appears to assert that MRIS committed fraud on the Copyright Office because it does not own copyright
`in the text of the compiled real estate listings. Doc. No. 167 ¶¶ 84, 87, 119. However, as noted by the Fourth
`Circuit, “[t]he copyright in individual component works need not be owned by the author of the collective work.”
`Doc. No. 180-1 at 12 (citing 17 U.S.C. § 201(c)).
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`Case 8:12-cv-00954-DKC Document 239 Filed 11/01/13 Page 9 of 18
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`as a whole is often a work made for hire, and in such cases, the author is the
`employer or other person for whom the work was prepared. See 17 U.S.C.
`201(b).”). The Court cannot equate MRIS’s designation of its Database as a work
`made for hire as an attestation that its employees or agents shot the photographs
`within the MRIS Database. Accordingly, the Court discerns no inconsistency
`between MRIS’s representations to the Copyright Office and the evidence it has
`presented to this Court regarding its ownership of copyrights in the photographs.
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`Doc. No. 186 at 3. The Court also rejected AHRN’s argument that MRIS’s interrogatory
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`responses constitute an admission that it lacks evidence of its ownership of copyrights to the
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`photographs in the MRIS Database:
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`Despite AHRN’s assertions to the contrary, the Court cannot read MRIS’s
`interrogatory response as an admission that it does not own valid copyrights in the
`underlying photographs of the MRIS Database. Furthermore, none of the cases
`cited by AHRN support the conclusion that to show a likelihood of success on the
`merits, MRIS was required to produce a chain of title for each underlying
`photograph in the MRIS Database. In conclusion, AHRN has failed to present
`evidence that would disturb the Court’s previous determinations.
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`Id. at 4-5. For the same reasons, AHRN’s allegations relating to MRIS’s work for hire
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`representations do not state a plausible claim for fraud on the Copyright Office.
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`
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`The work for hire allegations are the only new, substantive factual allegations against
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`MRIS in the Second Amended Counterclaims.2 However, the Court deems it necessary to
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`reconsider one aspect of its June 10 Opinion and Order. As it did in the First Amended
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`Counterclaims, AHRN continues to allege that MRIS committed fraud on the Copyright Office
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`by failing to disclose in its copyright registrations that CoreLogic, not MRIS, is actually
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`responsible for the selection and coordination of content in the MRIS Database. Doc. No. 167
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`¶¶ 127, 132-37, 176. The Court previously determined that this allegation appeared to be “a
`                                                            
`2 The remaining new allegations in the Second Amended Counterclaims—including refusals to deal, restrictive
`rules, and direct competition with AHRN—are directed to NAR’s conduct, and have no connection to MRIS. As
`with the First Amended Counterclaims, AHRN’s allegations against MRIS are focused upon MRIS’s writing of the
`Guidance Paper and promotion of its copyright registration program. Although AHRN refers to MRIS as NAR’s
`co-conspirator in its briefs, it has failed to set forth a plausible claim of an illicit agreement between MRIS and
`NAR. Allegations that MRIS attended industry meetings with NAR, that NAR expressed agreement with MRIS’s
`Guidance Paper and its legal opinions, and that NAR sought to fund MRIS’s lawsuit do not warrant deeming MRIS
`a co-conspirator. Conclusory allegations of MRIS’s role in a conspiracy fare no better.
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`Case 8:12-cv-00954-DKC Document 239 Filed 11/01/13 Page 10 of 18
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`reiteration of AHRN’s legal argument that the MRIS Database does not exhibit sufficient
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`originality to warrant copyright protection,” and that AHRN “failed to allege with sufficient
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`particularity that MRIS committed fraud on the Copyright Office by making material, factual
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`misrepresentations regarding its selection, coordination, and arrangement of its database.” Doc.
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`No. 159 at 26-27 (emphasis in original). The Court’s prior determination constitutes clear error,
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`however.3 AHRN’s allegations regarding CoreLogic cannot be viewed simply as another
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`attempt to argue that the MRIS Database is not entitled to copyright protection under Feist
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`Publications, Inc. v. Rural Telephone Service Co., Inc., 499 U.S. 340 (1991). Rather, AHRN
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`alleges that even accepting that the MRIS Database is sufficiently original to warrant copyright
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`protection, the copyright would belong to CoreLogic, not MRIS. E.g., Doc. No. 167 ¶¶ 135,
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`176. Such factual allegations are sufficiently particular to withstand scrutiny on a Motion to
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`Dismiss, even under the standards of Rule 9(b). Accepting AHRN’s allegations as true, MRIS’s
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`representation that it was responsible for the selection and coordination of content in its database
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`would be materially inaccurate, as the Copyright Office would not have granted copyright
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`protection to MRIS had it known that another entity was responsible for arranging the database.
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`AHRN would therefore have a plausible claim that MRIS’s copyright litigation and enforcement
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`efforts were a sham, and as a result, MRIS would not be entitled to Noerr-Pennington
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`immunity.4
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`                                                            
`3 Rule 54(b) of the Federal Rules of Civil Procedure provides that any order or decision “that adjudicates fewer than
`all the claims of the rights and liabilities of fewer than all the parties . . . may be revised at any time before the entry
`of a judgment adjudicating all the claims and all the parties’ rights and liabilities.” Fed. R. Civ. P. 54(b). Courts in
`this district generally have identified the following grounds for reconsideration of an interlocutory order: “(1) there
`has been an intervening change in controlling law; (2) there is additional evidence that was not previously available;
`or (3) the prior decision was based on clear error or would work manifest injustice.” Coulibaly v. JP Morgan Chase
`Bank, N.A., No. DKC 10-3517, 2013 WL 3507096, at *1 (D. Md. July 10, 2013) (quoting Akeva L.L.C. v. Adidas
`Am., Inc., 385 F. Supp. 2d 559, 565-66 (M.D.N.C. 2005)).
`4 The Court is persuaded in part by the District of Minnesota’s conclusion in Regional Multiple Listing Service of
`Minnesota, Inc. v. American Home Realty Network, Inc., --- F. Supp. 2d ----, 2013 WL 3367132 (D. Minn. July 5,
`2013). As in this case, the plaintiff MLS—Regional Multiple Listing Service of Minnesota (“RMLS”)—sued
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`In order to dismiss AHRN’s claim that MRIS committed fraud on the Copyright Office,
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`the Court would be required to rely on evidence outside the pleadings—specifically, the
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`declaration of MRIS CEO David Charron, who averred: “MRIS does not use CoreLogic for the
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`MRIS Database. Instead, MRIS has developed and owns its own proprietary database system
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`called ‘Cornerstone.’ MRIS’s Cornerstone system is protected by U.S. Patent Nos. 7346519 and
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`7881948.” Doc. No. 88-1 ¶ 14. Rule 12(d) of the Federal Rules of Civil Procedure provides:
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`If, on a motion under Rule 12(b)(6) . . . , matters outside the pleadings are
`presented to and not excluded by the court, the motion must be treated as one for
`summary judgment under Rule 56. All parties must be given a reasonable
`opportunity to present all the material that is pertinent to the motion.
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`Fed. R. Civ. P. 12(d) (emphasis added).
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`Based on the foregoing, MRIS’s Motion to Dismiss the Second Amended Counterclaims
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`must be treated as a motion for summary judgment under Rule 56. MRIS did not expressly
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`move for summary judgment on the Second Amended Counterclaims, nor was AHRN otherwise
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`                                                                                                                                                                                                
`AHRN for copyright infringement of its online database and obtained a preliminary injunction from the district
`court. AHRN filed a Sherman Act § 1 counterclaim against the plaintiff and RMLS moved to dismiss, arguing that
`it was entitled to Noerr-Pennington immunity. AHRN alleged, inter alia, that RMLS did not own the copyrights in
`the database because the data was arranged based upon the creative efforts of a different company. Id. at *5. The
`district court relied in part on this allegation in denying RMLS’s motion to dismiss: “AHRN alleges that, in the
`instant action, RMLS has asserted a copyright over the manner in which the facts and data are compiled in
`NorthstarMLS, even though the RMLS database is built on software RMLS did not design and does not own. . . .
`These allegations, if true, could show that RMLS’s threats and pursuit of litigation against AHRN were in fact a
`sham.” Id. at *12.
`
`It must be emphasized, however, that the Minnesota case differs from the instant action in multiple respects. First,
`as discussed herein, MRIS has presented evidence that it uses its own proprietary software, not CoreLogic, to
`arrange the database. It is therefore appropriate to defer ruling on MRIS’s motion and permit limited discovery on
`the issue. If AHRN fails to present a genuine issue of material fact, MRIS’s copyright litigation and enforcement
`efforts would be immunized from antitrust suit. Second, aside from the copyright litigation and enforcement efforts,
`there are significant differences between the factual allegations raised against RMLS and those raised against MRIS.
`For example, the Minnesota court relied upon the e-mail sent by RMLS employee John Mosey in which he called
`for MLSs to take collective action against AHRN. Id. at *14. While the e-mail might implicate RMLS, there is no
`inference to be drawn that implicates MRIS in any way. The Minnesota court also relied on AHRN’s allegation that
`third-party syndicators informed it that they would not extend a license to AHRN, which raised the specter of
`concerted action by MLSs to prevent dealing with companies that did not comply with their business model. Id.
`Such allegations are absent in AHRN’s Second Amended Counterclaims. In sum, the Court discerns no grounds to
`reconsider its previous ruling that AHRN’s allegations regarding Counterclaim-Defendants’ refusals to deal failed to
`state a claim against MRIS. Furthermore, as discussed herein, AHRN’s new allegations are directed to NAR, not
`MRIS.
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`on notice that the Court would treat MRIS’s Motion to Dismiss under Rule 56.5 Accordingly,
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`AHRN is entitled to limited discovery and an opportunity to present supplemental evidence to
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`the Court in an effort to present a genuine issue of material fact on the CoreLogic issue, if it so
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`chooses.6 The Court will defer ruling on MRIS’s motion as to Counts II and IV until such
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`discovery is complete or until AHRN communicates that it will not oppose the motion for
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`summary judgment.7 At this point, the Court offers no opinion as to what specific discovery will
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`be necessary to properly address the CoreLogic issue.8 Given the narrowness of the issue in
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`dispute, however, the Court anticipates that discovery will be limited and will set a deadline of
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`forty-five days for its completion. The Court is mindful of the high costs of federal antitrust
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`litigation, and the Court’s order should not be interpreted by AHRN as a license to engage in
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`broad, burdensome discovery requests at this juncture of the proceedings. See, e.g., Twombly,
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`550 U.S. at 558 (“The costs of modern federal antitrust litigation and the increasing caseload of
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`the federal courts counsel against sending the parties into discovery when there is no likelihood
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`that the plaintiffs can construct a claim from the events related in the complaint.”).
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`Although the Court will defer ruling on Counts II and IV, MRIS’s Motion to Dismiss will
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`be granted as to Count III. As discussed in the Court’s June 10 Opinion, California’s unfair
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`competition law (UCL) does not apply to nonresidents where the allegedly wrongful conduct
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`5 MRIS asserts that the Charron declaration is “part of the record” and should be considered by the Court because it
`denied AHRN’s Motion to Strike the declaration. Doc. No. 209 at 19. The Court cannot conclude, however, that
`AHRN was on notice that the Court would convert the pending Motion to one for summary judgment.
`6 MRIS previously moved to dismiss or, in the alternative, summarily adjudicate AHRN’s First Amended
`Counterclaims. The Court dismissed the claims under Rule 12(b)(6), and therefore did not address AHRN’s
`arguments that it the Court should defer granting MRIS’s Motion prior to discovery.
`7 As noted in the Court’s June 10 Opinion, the viability of AHRN’s unfair competition claim under Maryland law
`(Count II) relies on the same set of facts as the Sherman Act § 1 claim (Count IV). Doc. No. 159 at 37.
`8 In prior briefing on this issue, AHRN argued that the portion of the Charron declaration regarding CoreLogic
`lacked foundation. Doc. No. 83-1 at 5. AHRN also suggested that it would need time to conduct depositions of
`Charron and a 30(b)(6) MRIS corporate representative knowledgeable about MRIS’s Database configuration,
`including the CoreLogic Matrix, Cornerstone, and Keystone programs, and possibly third-parties. Id. at 19.
`Furthermore, counsel for AHRN stated in his previously filed Rule 56(d) affidavit that AHRN sought discovery
`from various software developers, communications between MRIS and those developers, and the deposition of
`Michael Belak. Doc. No. 94-1 at 5-6. 
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`Case 8:12-cv-00954-DKC Document 239 Filed 11/01/13 Page 13 of 18
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`occurred outside California. See, e.g., Norwest Mortg., Inc. v. Superior Court, 72 Cal. App. 4th
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`214, 222 (Cal. Ct. App. 1999) (holding that UCL was not applicable to claims of non-residents
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`injured by conduct occurring outside California); Parkinson v. Hyundai Motor Am., 258 F.R.D.
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`580, 598 (C.D. Cal. 2008) (same). The Court ruled that AHRN had failed to state a claim under
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`the UCL because it failed to identify wrongful conduct that occurred in California and the harm
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`AHRN suffered there. Doc. No. 159 at 38-39. AHRN has failed to cure these deficiencies in its
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`Second Amended Counterclaims.
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`Accordingly, MRIS’s Motion to Dismiss will be granted-in-part, and Count III will be
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`dismissed with prejudice. The Court will treat MRIS’s Motion as one for summary judgment
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`with respect to Counts II and IV, and will defer ruling on the motion in accordance with the
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`accompanying Order.
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`IV. CLAIMS AGAINST NAR
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`Section 1 of the Sherman Act declares illegal “[e]very contract, combination in the form
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`of trust or otherwise, or conspiracy, in restraint of trade or commerce . . . .” 15 U.S.C. § 1. To
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`establish a § 1 violation, “a plaintiff must prove, and therefore plead, ‘(1) a contract,
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`combination, or conspiracy; (2) that imposed an unreasonable restraint on trade.’” Robertson v.
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`Sea Pines Real Estate Cos., Inc., 679 F.3d 278, 284 (4th Cir. 2012) (quoting Dickson v.
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`Microsoft Corp., 309 F.3d 193, 202 (4th Cir. 2002)). In its June 10 Opinion and Order, the Court
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`concluded that AHRN had failed to plead the existence of either element of a Sherman Act § 1
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`claim. Specifically, the Court determined that AHRN had failed to outline the time, place, and
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`contours of any anticompetitive agreement. Doc. No. 159 at 30-34. The Court also determined
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`that AHRN had not plausibly alleged that competition in general was harmed and