`
`UNITED STATES DISTRICT COURT
`MIDDLE DISTRICT OF TENNESSEE
`NASHVILLE DIVISION
`
`IN RE: REALPAGE, INC., RENTAL
`SOFTWARE ANTITRUST LITIGATION
`(NO. II)
`
`
`
`
`
`
`
`
`Case No. 3:23-MD-3071
`MDL No. 3071
`
`Chief Judge Waverly D. Crenshaw, Jr.
`
`This Document Relates to:
`
`3:23-cv-00330
`3:23-cv-00331
`3:23-cv-00332
`3:23-cv-00326
`3:23-cv-00333
`3:23-cv-00334
`3:23-cv-00335
`3:23-cv-00336
`3:23-cv-00337
`3:23-cv-00338
`3:23-cv-00339
`3:23-cv-00344
`3:23-cv-00345
`3:23-cv-00356
`3:23-cv-00357
`3:23-cv-00358
`3:23-cv-00377
`3:23-cv-00378
`3:23-cv-00379
`3:22-cv-01082
`
`
`
`
`
`3:23-cv-00380
`3:23-cv-00979
`3:23-cv-00381
`3:23-cv-00387
`3:23-cv-00388
`3:23-cv-00389
`3:23-cv-00390
`3:23-cv-00391
`3:23-cv-00410
`3:23-cv-00411
`3:23-cv-00419
`3:23-cv-00413
`3:23-cv-00412
`3:23-cv-00414
`3:23-cv-00416
`3:23-cv-00415
`3:23-cv-00440
`3:23-cv-00445
`3:23-cv-00552
`3:23-cv-00742
`
`
`
`DEFENDANTS’ MEMORANDUM OF LAW IN SUPPORT OF
`MOTION TO DISMISS MULTIFAMILY PLAINTIFFS’ SECOND AMENDED
`CONSOLIDATED CLASS ACTION COMPLAINT
`
`Case 3:23-cv-00979 Document 88 Filed 10/09/23 Page 1 of 67 PageID #: 206
`
`

`

`TABLE OF CONTENTS
`
`Page
`
`I.
`
`II.
`
`III.
`
`IV.
`
`INTRODUCTION ............................................................................................................. 1 
`
`SUMMARY OF PLAINTIFFS’ ALLEGATIONS ........................................................... 3 
`
`A.
`
`B.
`
`RealPage Revenue Management Products ............................................................. 3 
`
`The Alleged Conspiracy ........................................................................................ 6 
`
`LEGAL STANDARD ........................................................................................................ 7 
`
`ARGUMENT ..................................................................................................................... 8 
`
`A.
`
`Plaintiffs Do Not Plausibly Allege a Sherman Act Section 1 Per Se
`Violation ................................................................................................................ 8 
`
`i.
`
`ii.
`
`Plaintiffs’ Group Pleading Is Improper and Insufficient ........................... 9 
`
`Plaintiffs Allege No Plausible Direct or Circumstantial Evidence of
`Conspiracy ............................................................................................... 13 
`
`a)
`
`b)
`
`Plaintiffs Fail to Allege “Parallel Conduct” ................................. 14 
`
`Plaintiffs Fail to Allege the Requisite “Plus Factors” .................. 17 
`
`iii.
`
`Plaintiffs’ Allegations That RealPage Facilitated and Enforced the
`Horizontal Conspiracy Also Fail ............................................................. 23 
`
`iv.
`
`The Alleged Conspiracy Is Implausible on Its Face ................................ 26 
`
`B.
`
`Plaintiffs’ Section 1 Claims Also Fail Under the Rule of Reason ....................... 27 
`
`i.
`
`Plaintiffs Do Not Define Plausible Relevant Markets. ............................ 29 
`
`a)
`
`Regional MSAs Are Not Plausible Relevant Markets ................. 30 
`
`ii.
`
`Plaintiffs Have Not Pleaded Anticompetitive Effects ............................. 32 
`
`C.
`
`D.
`
`Plaintiffs Fail to Establish Antitrust Standing ..................................................... 37 
`
`Plaintiffs’ State-Law Antitrust Claims Fail ......................................................... 38 
`
`V.
`
`CONCLUSION ................................................................................................................ 40 
`
`
`
`i
`Case 3:23-cv-00979 Document 88 Filed 10/09/23 Page 2 of 67 PageID #: 207
`
`

`

`TABLE OF AUTHORITIES
`
`Cases
`
`Page
`
`42nd Parallel N. v. E Street Denim Co.,
`286 F.3d 401 (7th Cir. 2002) ...................................................................................................33
`Aladdins Lights Inc. v. Eye Lighting Int’l,
`96 N.E.3d 864 (Ohio Ct. App. 2017) .......................................................................................38
`In re Amazon.com, Inc. eBook Antitrust Litig.,
`2023 WL 6006525 (S.D.N.Y. July 31, 2023) ..........................................................................34
`Ashcroft v. Iqbal,
`556 U.S. 662 (2009) ...............................................................................................................7, 8
`Associated Gen. Contractors of Cal., Inc. v. Cal. State Council of Carpenters,
`459 U.S. 519 (1983) .................................................................................................................37
`Bell Atl. Corp. v. Twombly,
`550 U.S. 544 (2007) .......................................................................................7, 8, 10, 11, 17, 22
`Bennett v. Visa U.S.A. Inc.,
`198 S.W.3d 747 (Tenn. Ct. App. 2006) ...................................................................................39
`Big River Indus. v. Headwaters Res., Inc.,
`971 F. Supp. 2d 609 (M.D. La. 2013) ......................................................................................39
`Blankenship v. City of Crossville,
`2017 WL 4641799 (M.D. Tenn. Oct. 17, 2017) ......................................................................36
`Blewett v. Abbott Labs,
`86 938 P.2d 842 782 (Wash. Ct. App. 1997) ...........................................................................39
`Brooke Grp. Ltd. v. Brown & Williamson Tobacco Corp.,
`509 U.S. 209 (1993) .................................................................................................................33
`Brown Shoe Co. v. United States,
`370 U.S. 294 (1962) .................................................................................................................30
`Brunson Commc’ns, Inc. v. Arbitron, Inc.,
`239 F. Supp. 2d 550 (E.D. Pa. 2002) .......................................................................................27
`C.S. Sewell, M.D. P.C. v. Amerigroup Tenn., Inc.,
`2018 WL 6591429 (M.D. Tenn. Dec. 14, 2018)......................................................................14
`Cal. Dental Ass’n v. FTC,
`526 U.S. 756 (1999) .................................................................................................................29
`Care Heating & Cooling, Inc. v. Am. Standard, Inc.,
`427 F.3d 1008 (6th Cir. 2005) .................................................................................................28
`CBC Cos. v. Equifax, Inc.,
`561 F.3d 569 (6th Cir. 2009) ...................................................................................................37
`
`ii
`Case 3:23-cv-00979 Document 88 Filed 10/09/23 Page 3 of 67 PageID #: 208
`
`

`

`TABLE OF AUTHORITIES
`(continued)
`
`Page
`In re Cedar Shakes & Shingles Antitrust Litig.,
`2020 WL 832324 (W.D. Wash. Feb. 20, 2020) .......................................................................15
`Cty. of Tuolumne v. Sonora Cmty. Hosp.,
`236 F.3d 1148 (9th Cir. 2001) .................................................................................................38
`Conley Publ’g Grp., Ltd. v. Journal Commc’ns, Inc.,
`665 N.W.2d 879 (Wis. 2003) ...................................................................................................39
`Cont’l Cablevision of Ohio, Inc. v. Am. Elec. Power Co.,
`715 F.2d 1115 (6th Cir. 1983) .................................................................................................22
`Cupp v. Alberto-Culver USA, Inc.,
`310 F. Supp. 2d 963 (W.D. Tenn. 2004) ..................................................................................32
`DaimlerChrysler Corp. v. Cuno,
`547 U.S. 332 (2006) .................................................................................................................40
`In re Dairy Farmers of Am., Inc. Cheese Antitrust Litig.,
`2015 WL 3988488 (N.D. Ill. June 29, 2015) ...........................................................................38
`Deich-Keibler v. Bank One,
`243 F. App’x 164 (7th Cir. 2007) ............................................................................................38
`Dickson v. Microsoft Corp.,
`309 F.3d 193 (4th Cir. 2002) ...................................................................................................34
`Drs. Steuer & Latham, P.A. v. Nat’l Med. Enters.,
`672 F. Supp. 1489 (D.S.C. 1987), aff’d, 846 F.2d 70 (4th Cir. 1988) .....................................38
`Drug Emporium, Inc. v. Blue Cross of Western New York, Inc.,
`104 F. Supp. 2d 184 (W.D.N.Y. 2000) ....................................................................................34
`In re Dynamic Random Access Memory (DRAM) Indirect Purchaser Antitrust
`Litig.,
`28 F.4th 42 (9th Cir. 2022) ..........................................................................................17, 19, 23
`In re Elec. Books Antitrust Litig.,
`2014 WL 2535112 (S.D.N.Y. June 5, 2014) ...........................................................................38
`Entrialgo v. Twin City Dodge, Inc.,
`333 N.E.2d 202 (Mass. 1975) ..................................................................................................39
`Erie Cty. v. Morton Salt, Inc.,
`702 F.3d 860 (6th Cir. 2012) .............................................................................................23, 26
`Expert Masonry, Inc. v. Boone Cty.,
`440 F.3d 336 (6th Cir. 2006) ...................................................................................................28
`Felder’s Collision Parts, Inc v. All Star Advert. Agency, Inc.,
`777 F.3d 756 (5th Cir. 2015) ...................................................................................................38
`
`iii
`Case 3:23-cv-00979 Document 88 Filed 10/09/23 Page 4 of 67 PageID #: 209
`
`

`

`TABLE OF AUTHORITIES
`(continued)
`
`Page
`Finley v. Kelly,
`384 F. Supp. 3d 898 (M.D. Tenn. 2019) ....................................................................................5
`Fox v. Saginaw Cnty.,
`67 F.4th 284 (6th Cir. 2023) ....................................................................................................40
`In re German Auto. Mfrs. Antitrust Litig.,
`612 F. Supp. 3d 967 (N.D. Cal. 2020) .....................................................................................23
`Gibson v. Miami Valley Milk Producers, Inc.,
`299 N.E.2d 631 (Ind. Ct. App. 1973).......................................................................................39
`Hobart-Mayfield, Inc. v. Nat’l Operating Comm. on Standards for Athletic Equip.,
`48 F.4th 656 (6th Cir. 2022) ..........................................................................................8, 14, 18
`Hobart-Mayfield, Inc. v. Nat’l Operating Comm. on Standards for Athletic Equip.,
`535 F. Supp. 3d 638 (E.D. Mich. 2021) .....................................................................................9
`Hogan v. Pilgrim’s Pride Corp.,
`2018 WL 1316979 (D. Colo. Mar. 14, 2018) ..........................................................................16
`Hyland v. Homeservices of Am., Inc.,
`771 F.3d 310 (6th Cir. 2014) .............................................................................................13, 18
`In re ICE LIBOR Antitrust Litig.,
`2020 WL 1467354 (S.D.N.Y. Mar. 26, 2020) .........................................................................19
`In re Ins. Brokerage Antitrust Litig.,
`618 F.3d 300 (3d Cir. 2010).........................................................................................12, 18, 21
`In re Interest Rate Swaps Antitrust Litig.,
`261 F. Supp. 3d 430 (S.D.N.Y. 2017) ................................................................................19, 38
`Interstate Circuit, Inc. v. United States,
`306 U.S. 208 (1939) .....................................................................................................12, 13, 14
`Island Tobacco Co. v. R. J. Reynolds Indus.,
`513 F. Supp. 726 (D. Haw. 1981) ............................................................................................38
`Jones v. Micron Tech. Inc.,
`400 F. Supp. 3d 897 (N.D. Cal. 2019) .....................................................................................23
`K&S Assocs., Inc. v. Am. Ass’n of Physicists in Med.,
`2012 WL 3061850 (M.D. Tenn. July 26, 2012) ......................................................................22
`In re K-Dur Antitrust Litig.,
`2008 WL 2660780 (D.N.J. Feb. 28, 2008) ..............................................................................39
`Kendall v. Visa U.S.A., Inc.,
`518 F.3d 1042 (9th Cir. 2008) ...................................................................................................9
`
`iv
`Case 3:23-cv-00979 Document 88 Filed 10/09/23 Page 5 of 67 PageID #: 210
`
`

`

`TABLE OF AUTHORITIES
`(continued)
`
`Page
`Kleen Prods., LLC v. Int’l Paper,
`276 F. Supp. 3d 811 (N.D. Ill. 2017), aff’d, 910 F.3d 927 (7th Cir. 2018) .............................25
`Krause Marine Towing Corp. v. Ass’n of Md. Pilots,
`44 A.3d 1043 (Md. Ct. Spec. App. 2012) ................................................................................38
`State ex rel. Leech v. Levi Strauss & Co.,
`1980 WL 4696 (Tenn. Ch. Ct. Sept. 25, 1980) ........................................................................39
`Lifeline Ltd. No. II v. Conn. Gen. Life Ins. Co.,
`821 F. Supp. 1201 (E.D. Mich. 1993) ................................................................................26, 27
`In re Linerboard Antitrust Litig.,
`223 F.R.D. 335 (E.D. Pa. 2004) ...............................................................................................39
`Llacua v. W. Range Ass’n,
`930 F.3d 1161 (10th Cir. 2019) ...............................................................................................25
`In re Local TV Advert. Antitrust Litig.,
`2022 WL 3716202 (N.D. Ill. Aug. 29, 2022) ....................................................................20, 26
`Lorix v. Crompton Corp.,
`736 N.W.2d 619 (Minn. 2007).................................................................................................38
`Maris Distrib. Co. v. Anheuser-Busch, Inc.,
`302 F.3d 1207 (11th Cir. 2002) ...............................................................................................34
`Matsushita Elec. Indus. Co. v. Zenith Radio Corp.,
`475 U.S. 574 (1986) .................................................................................................................27
`Med. Ctr. at Elizabeth Place, LLC v. Atrium Health Sys.,
`922 F.3d 713 (6th Cir. 2019) ...................................................................................................28
`Mich. Div.-Monument Builders of N. Am. v. Mich. Cemetery Ass’n,
`524 F.3d 726 (6th Cir. 2008) .............................................................................................30, 34
`Midwest Auto Auction, Inc. v. McNeal,
`2012 WL 3478647 (E.D. Mich. Aug. 14, 2012) ......................................................................19
`Minn. Ass’n of Nurse Anesthetists v. Unity Hosp.,
`5 F. Supp. 2d 694 (D. Minn. 1998) ....................................................................................34, 35
`Mosaic Health Inc. v. Sanofi-Aventis U.S., LLC,
`2022 WL 4017895 (W.D.N.Y. Sept. 2, 2022) .........................................................................15
`In re Musical Instruments & Equip. Antitrust Litig.,
`798 F.3d 1186 (9th Cir. 2015) .........................................................................14, 16, 19, 23, 33
`NAACP v. Claiborne Hardware Co.,
`393 So.2d 1290 (Miss. 1980), rev’d on other grounds, 458 U.S. 886 (1982) .........................38
`
`v
`Case 3:23-cv-00979 Document 88 Filed 10/09/23 Page 6 of 67 PageID #: 211
`
`

`

`TABLE OF AUTHORITIES
`(continued)
`
`Page
`Nat’l Hockey League Players Ass’n v. Plymouth Whalers Hockey Club,
`419 F.3d 462 (6th Cir. 2005) ...................................................................................................30
`New Orleans Ass’n of Cemetery Tour Guides & Cos. v. New Orleans
`Archdiocesan Cemeteries,
`56 F.4th 1026 (5th Cir. 2023) ..................................................................................................30
`In re Niaspan Antitrust Litig.,
`42 F. Supp. 3d 735 (E.D. Pa. 2014) .........................................................................................40
`NicSand, Inc. v. 3M Co.,
`507 F.3d 442 (6th Cir. 2007) ...................................................................................................37
`Odom v. Fairbanks Mem’l Hosp.,
`999 P.2d 123 (Alaska 2000).....................................................................................................38
`Ogden v. Little Caesar Enters.,
`393 F. Supp. 3d 622 (E.D. Mich. 2019) ...................................................................................28
`Ohio v. Am. Express Co.,
`138 S. Ct. 2274 (2018) .................................................................................................32, 34, 36
`In re Omnicare, Inc. Sec. Litig.,
`769 F.3d 455 (6th Cir. 2014) .....................................................................................................5
`Or. Laborers-Emp’rs. Health & Welfare Tr. Fund v. Philip Morris Inc.,
`185 F.3d 957 (9th Cir. 1999) ...................................................................................................38
`Palmer v. Atl. Ice & Coal Co.,
`173 S.E. 424, 428–30 (Ga. 1934).............................................................................................39
`Par v. Wolfe Clinic, P.C.,
`70 F.4th 441 (8th Cir. 2023) ....................................................................................................30
`Park Irmat Drug Corp. v. Express Scripts Holding Co.,
`911 F.3d 505 (8th Cir. 2018) ...................................................................................................14
`PSI Repair Servs., Inc. v. Honeywell, Inc.,
`104 F.3d 811 (6th Cir. 1997) ...................................................................................................34
`Reveal Chat Holdco, LLC v. Facebook, Inc.,
`471 F. Supp. 3d 981 (N.D. Cal. 2020) .....................................................................................21
`In re Se. Milk Antitrust Litig.,
`739 F.3d 262 (6th Cir. 2014) ...............................................................................................9, 29
`Sec’y of Labor v. Macy’s, Inc.,
`2021 WL 5359769 (S.D. Ohio Nov. 17, 2021) ........................................................................24
`Semertzides v. Bethesda N. Hosp.,
`2014 WL 2573073 (S.D. Ohio June 9, 2014), aff’d, 608 F. App’x 378 (6th Cir.
`2015) ........................................................................................................................................30
`
`vi
`Case 3:23-cv-00979 Document 88 Filed 10/09/23 Page 7 of 67 PageID #: 212
`
`

`

`TABLE OF AUTHORITIES
`(continued)
`
`Page
`State of N.Y. by Abrams v. Anheuser-Busch, Inc.,
`811 F. Supp. 848 (E.D.N.Y. 1993) ..........................................................................................35
`In re Sulfuric Acid Antitrust Litig.,
`703 F.3d 1004 (7th Cir. 2012) .................................................................................................28
`Tampa Elec. Co. v. Nashville Coal Co.,
`365 U.S. 320 (1961) .................................................................................................................30
`Tennessean Truckstop, Inc. v. NTS, Inc.,
`875 F.2d 86 (6th Cir. 1989) .....................................................................................................37
`Total Benefits Planning Agency, Inc. v. Anthem Blue Cross & Blue Shield,
`552 F.3d 430 (6th Cir. 2008) .............................................................................9, 10, 12, 28, 29
`Total Benefits Planning Agency Inc. v. Anthem Blue Cross & Blue Shield,
`630 F. Supp. 2d 842 (S.D. Ohio 2007), aff’d, 552 F.3d 430 (6th Cir. 2008) ...........................35
`Toys “R” Us, Inc. v. FTC,
`221 F.3d 928 (7th Cir. 2000) .............................................................................................12, 13
`Trails End Campground, LLC v. Brimstone Recreation, LLC,
`2015 WL 388313 (Tenn. Ct. App. Jan. 29, 2015) ...................................................................39
`Trans Union LLC v. Ramirez,
`141 S. Ct. 2190 (2021) .............................................................................................................40
`In re Travel Agent Comm’n Antitrust Litig.,
`2007 WL 3171675 (N.D. Ohio Oct. 29, 2007), aff’d, 583 F.3d 896 (6th Cir.
`2009) ..................................................................................................................................18, 22
`In re Travel Agent Comm’n Antitrust Litig.,
`583 F.3d 896 (6th Cir. 2009) .............................................................................8, 10, 14, 17, 19
`Tri-State Rubbish, Inc. v. Waste Mgmt., Inc.,
`875 F. Supp. 8 (D. Me. 1994) ..................................................................................................38
`United States v. U.S. Gypsum Co.,
`438 U.S. 422 (1978) .................................................................................................................29
`United States v. Apple, Inc.,
`791 F.3d 290 (2d Cir. 2015)...............................................................................................12, 13
`United States v. Conn. Nat’l Bank,
`418 U.S. 656 (1974) ...........................................................................................................30, 31
`Wallace v. Bank of Bartlett,
`55 F.3d 1166 (6th Cir. 1995) ...................................................................................................29
`White & White, Inc. v. American Hosp. Supply Corp.,
`723 F.2d 495 (6th Cir. 1983) ...................................................................................................31
`
`vii
`Case 3:23-cv-00979 Document 88 Filed 10/09/23 Page 8 of 67 PageID #: 213
`
`

`

`TABLE OF AUTHORITIES
`(continued)
`
`Page
`White v. R.M. Packer Co.,
`635 F.3d 571 (1st Cir. 2011) ....................................................................................................23
`Winn-Dixie Stores, Inc. v. E. Mushroom Mktg. Coop., Inc.,
`
`2023 WL 5521221 (3d Cir. Aug. 28, 2023) .............................................................................29
`Statutes
`Ala. Code § 6-2-38(l) .....................................................................................................................39
`Ariz. Stat. § 44-1412 ......................................................................................................................38
`D.C. Code § 28-4515 .....................................................................................................................38
`Fla. Stat. § 542.32 ..........................................................................................................................38
`Idaho Code § 48-102(3) .................................................................................................................38
`Ill. Comp. Stat. 10/11 .....................................................................................................................38
`Ind. Code § 24-1-1-1 ......................................................................................................................39
`Ind. Code § 24-1-3-1 ......................................................................................................................39
`Iowa Code § 553.2 .........................................................................................................................38
`Kan. Stat. § 50-163(b) ....................................................................................................................38
`Kan. Stat. § 60-512(2) ....................................................................................................................39
`Mass. Gen. Laws ch. 93 § 1 ...........................................................................................................38
`Mich. Comp. Laws § 445.784(2) ...................................................................................................38
`Mo. Rev. Stat. § 416.141 ...............................................................................................................38
`N.H. Rev. Stat. § 356:14 ................................................................................................................38
`N.J. Rev. Stat. § 56:9-18 ................................................................................................................38
`N.M. Stat. § 57-1-15 ......................................................................................................................38
`Neb. Rev. St. § 59-829 ...................................................................................................................38
`Okla. Stat. § 212.............................................................................................................................38
`S.C. Code § 39-3-30.......................................................................................................................39
`S.D. Codified Laws § 37-1-22 .......................................................................................................39
`Va. Code § 59.1-9.17 .....................................................................................................................39
`
`viii
`Case 3:23-cv-00979 Document 88 Filed 10/09/23 Page 9 of 67 PageID #: 214
`
`

`

`TABLE OF AUTHORITIES
`(continued)
`
`Page
`W. Va. Code § 47-18-16 ................................................................................................................39
`Other Authorities
`ABA, Antitrust Law Developments 71–72 (9th ed. 2022) ............................................................34
`U.S. Census Bureau, https://data.census.gov/table?q= B25032:+TENURE+
`BY+UNITS+IN+STRUCTURE&g=010XX00US$3100000 ....................................................4
`Rules
`Fed. R. Civ. P. 12(b)(6)....................................................................................................................7
`
`
`
`ix
`Case 3:23-cv-00979 Document 88 Filed 10/09/23 Page 10 of 67 PageID #: 215
`
`

`

`
`
`I.
`
`INTRODUCTION
`
`Plaintiffs’ Second Amended Complaint (“SAMC”) again attempts to advance an
`
`implausible theory: that any company that licenses any RealPage revenue management software
`
`(“RMS”), including the 49 defendants who own, operate, or manage multifamily rental housing in
`
`different parts of the country (collectively, the “Lessor Defendants”), without doing anything
`
`more, has entered into an agreement to fix rental prices that constitutes a per se violation of the
`
`antitrust laws. See SAMC ¶ 6. Despite multiple opportunities to amend, Plaintiffs still do not
`
`allege facts plausibly supporting this theory.
`
`First, the Complaint fails to allege facts that, even if true, plausibly suggest that the Lessor
`
`Defendants entered into any agreement whatsoever with each other. As with the prior complaint,
`
`this Complaint lacks any factual allegations about the vast majority of Lessor Defendants beyond
`
`the assertion that they each used an RMS product offered by RealPage. While Plaintiffs have now
`
`scattered more references to individual Lessor Defendants throughout the complaint, these are
`
`merely window dressing; none of the new allegations shed any light on what each Lessor
`
`Defendant allegedly did to join the conspiracy. This generic, “group pleading” will not suffice.
`
`Plaintiffs have the burden to allege that each Defendant made a “conscious commitment” to enter
`
`into the alleged agreement. Despite multiple amendments, they cannot do so.
`
`Second, the Complaint fails to allege either the direct or circumstantial facts required to
`
`support a conspiracy claim. Despite purportedly gathering information from more than ten
`
`confidential “witnesses,”1 Plaintiffs do not even claim to have direct evidence of a conspiratorial
`
`agreement: no recorded phone calls or “smoking gun” documents that establish the existence of
`
`
`1 The identities of two new confidential “witnesses” in the SAMC have still not been disclosed to
`Defendants or the Court.
`
`
`
`1
`Case 3:23-cv-00979 Document 88 Filed 10/09/23 Page 11 of 67 PageID #: 216
`
`

`

`
`
`an agreement. Nor have Plaintiffs met their burden to allege circumstantial evidence—parallel
`
`conduct and “plus factors”—that, taken as true, tend to exclude the possibility of independent
`
`conduct by the Lessor Defendants. Instead, Plaintiffs broadly allege that all Lessor Defendants
`
`used a RealPage RMS product, but never allege that Lessor Defendants used the same software at
`
`the same time, much less that Lessor Defendants accepted the same or even similar pricing
`
`recommendations generated by the software at the same or similar times. Nor do Plaintiffs allege
`
`how Lessor Defendants did anything more or differently than the many other non-defendants who
`
`also use RealPage RMS. And although Plaintiffs cite average pricing by the Lessor Defendants,
`
`to the extent this yearly average data reveals anything about rental unit pricing that is set daily, it
`
`reflects only substantial variation—with some average pricing even going down—which is the
`
`opposite of parallelism.
`
`Plaintiffs’ “plus factor” allegations similarly fail to exclude the possibility that Lessor
`
`Defendants acted independently. Most of the “plus factor” allegations merely recite market
`
`characteristics that are not indicative of collusion, and all are at least as consistent with rational,
`
`independent business behavior as with an unlawful agreement. Plaintiffs acknowledge the many
`
`legitimate reasons why adoption of RealPage software would be in a Lessor Defendant’s unilateral
`
`interest—including its advertised ability to increase revenue, reduce vacancies, and maximize asset
`
`value. And by Plaintiffs’ own allegations, these benefits were being realized by users for years
`
`before the conspiracy is alleged to have begun.
`
`Third, the conspiracy Plaintiffs allege is implausible. Plaintiffs acknowledge that an
`
`agreement to use RealPage RMS to set artificially high prices could work only if the Lessor
`
`Defendants “know that their competitors are setting rental prices using RealPage’s RMS and thus
`
`would not attempt to undercut them.” Id. ¶ 31. But Plaintiffs’ Complaint alleges that, at most,
`
`2
`Case 3:23-cv-00979 Document 88 Filed 10/09/23 Page 12 of 67 PageID #: 217
`
`

`

`
`
`RealPage RMS is used for only 18% of multifamily units in the country. Thus, no Lessor
`
`Defendant could “know” that all of their competitors were adopting RealPage RMS pricing, and
`
`by Plaintiffs’ own admission the conspiracy could not work.
`
`In sum, Plaintiffs have not alleged a plausible horizontal price-fixing conspiracy. At best,
`
`they allege that Lessor Defendants each agreed individually with RealPage to use a software tool
`
`that they believed was in their unilateral interest, with the knowledge that other Lessor Defendants
`
`were also using that same tool, and then used it to varying degrees. But such agreements would
`
`not be a per se violation, as Plaintiffs claim, because they are not among the narrow categories of
`
`agreement that courts have deemed to be “unquestionably” anticompetitive. Instead, Plaintiffs’
`
`claims would be subject to the default rule of reason standard. And their claims are equally
`
`deficient under the rule of reason because Plaintiffs do not carry their burden of plausibly alleging
`
`anticompetitive effects in a plausibly defined relevant market.
`
`Plaintiffs do not allege actionable claims under the Sherman Act—nor corresponding state
`
`law—and so the Court should dismiss them. Having already given the Plaintiffs a “last and forever
`
`opportunity to amend their complaints” (ECF 499 at 14:20–22), the Court should now dismiss with
`
`prejudice.
`
`II. SUMMARY OF PLAINTIFFS’ ALLEGATIONS
`
`A.
`
`RealPage Revenue Management Products
`
`RealPage provides a “comprehensive platform of data analytics and on demand software
`
`solutions and services for the rental real estate industry.” SAMC ¶ 208. This includes both the
`
`RMS at issue in this case and other types of software—such as property management software and
`
`tenant screening software—unrelated to the pricing of multifamily units. See id. ¶ 224.
`
`Altogether, Plaintiffs allege that RealPage has “over 31,700” clients who use some form of
`
`3
`Case 3:23-cv-00979 Document 88