Casey Hyland v. HomeServices of America, Inc. , 771 F.3d 310 ( 2014 )


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  •                    RECOMMENDED FOR FULL-TEXT PUBLICATION
    Pursuant to Sixth Circuit I.O.P. 32.1(b)
    File Name: 14a0277p.06
    UNITED STATES COURT OF APPEALS
    FOR THE SIXTH CIRCUIT
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    CASEY WILLIAM HYLAND, et al.,
    -
    Plaintiffs,
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    No. 12-5947
    CHRISTOPHER R. BURNETTE; MYSTIC
    ,
    >
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    BURNETTE,
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    Plaintiffs-Appellants,
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    v.
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    HOMESERVICES OF AMERICA, INC.;
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    HOMESERVICES OF KENTUCKY, INC.;
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    SEMONIN REALTORS; RECTOR-HAYDEN
    REALTORS; MCMAHAN COMPANY, INC., d/b/a           -
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    N
    Coldwell Banker MacMahan Company,
    Defendants-Appellees.
    Appeal from the United States District Court
    for the Western District of Kentucky at Louisville.
    No. 3:05-cv-00612—Thomas B. Russell, District Judge.
    Argued: March 18, 2014
    Decided and Filed: November 13, 2014
    Before: COLE, Chief Judge; NORRIS and GIBBONS, Circuit Judges.
    _________________
    COUNSEL
    ARGUED: Christopher Lovell, LOVELL STEWART HALEBIAN JACOBSON LLP,
    New York, New York, for Appellants. Robert D. MacGill, BARNES & THORNBURG
    LLP, Indianapolis, Indiana, for Appellees HomeServices of America. Matthew C.
    Blickensderfer, FROST BROWN TODD LLC, Cincinnati, Ohio, for Appellee McMahan
    Company ON BRIEF: Christopher Lovell, LOVELL STEWART HALEBIAN
    JACOBSON LLP, New York, New York, for Appellants. Robert D. MacGill, Karoline
    E. Jackson, BARNES & THORNBURG LLP, Indianapolis, Indiana, for Appellees
    HomeServices of America. Matthew C. Blickensderfer, FROST BROWN TODD LLC,
    Cincinnati, Ohio, for Appellee McMahan Company.
    1
    No. 12-5947         Hyland, et al.v. HomeServices of Am., et al.                     Page 2
    _________________
    OPINION
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    ALAN E. NORRIS, Circuit Judge. Class representatives Christopher and Mystic
    Burnette appeal three rulings by the district court that resulted in judgment for defendant
    real estate firms, all of which operate in Kentucky. The fourth amended complaint
    alleged that defendants violated Section 1 of the Sherman Antitrust Act, 15 U.S.C. § 1,
    by participating in a horizontal conspiracy to fix the commissions charged in Kentucky
    real estate transactions at an anti-competitive rate. The certified class consists of people
    who sold residential real estate in Kentucky from October 11, 2001, to October 11, 2005,
    and used the services of defendants.
    Plaintiffs contend that the district court erred 1) by granting summary judgment
    to defendants; 2) by excluding the opinions of plaintiffs’ experts with respect to the
    ultimate question of whether collusion among the defendants was the likely economic
    explanation of the pricing of commissions; and 3) by finding that defendant
    HomeServices of America, Inc., was not responsible for the acts of its subsidiary,
    HomeServices of Kentucky, Inc.
    For the reasons that follow, we affirm the judgment of the district court.
    I.
    Plaintiffs filed suit in October 2005. On November 7, 2008, the district court
    certified the class alluded to above. We declined an invitation for interlocutory review
    of that order.
    The crux of the allegation brought by plaintiffs is that defendants violated the
    Sherman Act by conspiring to charge a supra-competitive real estate broker commission
    of 6% and thereby injured sellers of residential property.
    Several of the original named defendants have reached settlement agreements.
    The remaining defendants consist of the McMahan Company, Inc. (d/b/a Coldwell
    No. 12-5947            Hyland, et al.v. HomeServices of Am., et al.                                  Page 3
    Banker McMahan Co.) (“McMahan”); HomeServices of Kentucky, Inc. (“HSK”), which
    owns and operates Kentucky realtor defendants Semonin Realtors and Rector-Hayden
    Realtors; and HomeServices of America, Inc., (“HSA”), which is the parent company
    of HSK.
    To become a real estate agent in Kentucky, an individual must be licensed by the
    Commonwealth’s Real Estate Commission (“KREC”). Agents typically join local
    realtors’ boards, such as the Greater Louisville Association of Realtors, the Lexington-
    Bluegrass Association of Realtors, and the Kentucky Association of Realtors (“KAR”).
    In 1991, the KREC passed a regulation (the “Rebate Ban”) that prohibited
    licensed real estate brokers in Kentucky from offering any item or thing of value,
    including rebates, to induce clients to retain their services.                    The United States
    Department of Justice filed suit in 2005 against the KREC alleging that the Rebate Ban
    violated Section 1 of the Sherman Act.1 That suit was settled and the Rebate Ban was
    abolished.
    This action was filed shortly thereafter. The fourth amended complaint alleges
    that defendants “combined, conspired and agreed to fix, maintain and inflate real estate
    broker commissions and associated fees and refuse to compete on the basis of price.”
    Specifically, defendants “have charged a real estate broker commission of 6%, have
    described this 6% fee as the ‘standard’ or ‘typical’ fee, and have habitually refused to
    negotiate a lower fee.” According to the complaint, this collusion resulted in sellers
    being forced to pay artificially inflated commissions.
    1
    The Section reads as follows:
    Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint
    of trade or commerce among the several States, or with foreign nations, is declared to
    be illegal. Every person who shall make any contract or engage in any combination or
    conspiracy hereby declared to be illegal shall be deemed guilty of a felony, and, on
    conviction thereof, shall be punished by fine not exceeding $100,000,000 if a
    corporation, or, if any other person, $1,000,000, or by imprisonment not exceeding
    10 years, or by both said punishments, in the discretion of the court.
    15 U.S.C. § 1.
    No. 12-5947         Hyland, et al.v. HomeServices of Am., et al.                       Page 4
    The district court relied upon plaintiffs’ expert, Dr. Gary French, to set out the
    elements of the alleged conspiracy:
    [T]he alleged conspiracy has two related elements: (1) fixing the buyer’s
    broker commission at 3%; and (2) fixing the listing commission at a
    minimum of 6%. According to Dr. French, due to the visibility of the
    offered buyer’s broker commission on the MLS [Multiple Listing
    Service], those listing brokers not offering at least 3% to a buyer’s broker
    could be detected and policed. If a listing broker did not offer at least 3%
    to a buyer’s broker, then a buyer’s broker would not be interested in
    showing the property. . . . [T]he KREC Rebate Ban helped maintain
    commission rates at the conspiratorial standard during the Class Period
    by ensuring that Defendants did not cheat on their price-fixing agreement
    by providing a rebate or discount off of the stated fee.
    District Court Memorandum Opinion at 2-3, filed July 18, 2012 (citations omitted).
    The record developed below is voluminous and contains evidence that supports
    each side’s claims. Plaintiffs point to a number of evidentiary items that they believe the
    district court improperly discounted. Unlike cases based solely upon circumstantial
    inferences, plaintiffs contend that direct evidence supports a conclusion that defendants
    actually agreed to fix prices. See In re Text Messaging Antitrust Litig., 
    630 F.3d 622
    ,
    627 (7th Cir. 2010) (Section 1 “does not require sellers to compete; it just forbids their
    agreeing or conspiring not to compete.”); see also Re/Max Int’l, Inc. v. Realty One, Inc.,
    
    173 F.3d 995
    , 1009 (6th Cir. 1999). In plaintiffs’ view, they submitted extensive
    evidence of communications among defendants concerning breaches of the National
    Association of Realtors’ rule regarding the ban against brokers discussing commission
    levels, pricing structures, or marketing practices of other brokers. Specifically, they refer
    to deposition testimony of principal brokers to the effect that realtors often discussed
    fees and commissions when they met.
    In addition, plaintiffs point to a KREC hearing held on November 28, 2000, in
    Louisville. Among other things, Arvel “Jerry” McMahan, the principal broker for the
    McMahan Company, spoke about the dangers to the profession of internet brokers who
    offer cut-rate commissions. In his words, “the most unprofessional thing we can do in
    this business is cut our commission. I think we ought to be worth what we charge in the
    No. 12-5947        Hyland, et al.v. HomeServices of Am., et al.                     Page 5
    services that we offer.” Similar sentiments were expressed by a representative of
    Semonin. In plaintiffs’ view, “[a] reasonable juror could easily find that the plain
    meaning of Defendants CBMcMahan’s and Semonin/HSK’s improper words reflected
    at the very least either (a) unity of purpose, or (b) a common design and understanding,
    or (c) a meeting of the minds, between Defendants CBMcMahan and Semonin not to cut
    commissions.” Appellant Brief at 10 (emphasis omitted). In short, plaintiffs contend
    that they have produced direct evidence of price fixing in the form of the KREC hearing
    transcript.
    In further support of that contention, they point to the complaint against the
    KREC filed by the Department of Justice challenging the Rebate Ban, in which the DOJ
    averred that the ban “enabled Brokers to raise, fix, peg, or stabilize the prices and rates
    at which Brokers are compensated. The Rebate Ban is the result of agreements,
    combinations, or conspiracies among its Commissioners and others, and it unreasonably
    restrains competition to the detriment of consumers.” DOJ Complaint at ¶ 4. As already
    noted, this complaint resulted in the abolition of the Rebate Ban.
    Plaintiffs paint the following general picture of the evolution of real estate
    commissions in Kentucky from the 1970s through the class period. During the 1990s,
    a shift occurred in the relationship between buyer’s brokers and listing agents.
    Formerly, a buyer’s broker was essentially a cooperating broker working with the listing
    agent. In the 1990s, however, a buyer’s broker’s role changed and he or she became a
    fiduciary of the buyer while the listing broker’s allegiance was to the seller. Throughout
    both periods, the typical commission remained at 6% despite the fact that persons in
    other commission-driven occupations—e.g., travel agents and stockbrokers—saw their
    commissions erode. An MLS listing and other sale-related documents, such as a HUD-1
    form, permitted realtors to determine commission levels, thereby allowing the industry
    to police those agents who might be providing rebates or other incentives to drum up
    business. This impetus manifested itself in the Rebate Ban. At bottom, plaintiffs’
    contention—supported by expert testimony, depositions, and documents—allegedly is
    that defendant firms colluded to keep commissions at an artificially inflated rate.
    No. 12-5947         Hyland, et al.v. HomeServices of Am., et al.                      Page 6
    In response, defendant McMahan emphasizes that it considers itself a “full-
    service” real estate broker with eleven offices in Kentucky during the class period. In
    addition to listing property, it would suggest repairs to the owner in order to make the
    home more attractive, hold open houses, and engage in advertising efforts. Unlike a cut-
    rate internet broker, a full-service broker provided a wider range of services to the client,
    thereby justifying a higher commission. Principal agent Jerry McMahan oversaw the
    operation of the various offices, although the managing brokers in those locations had
    responsibility for the day-to-day operations.
    According to McMahan, commissions derive from both the cost of doing
    business and historical context. In the past, the industry used a 6% commission for
    homes and a 10% commission for vacant land. This policy was not derived from
    consultation or agreement with other brokers. Agents with the firm were free to
    negotiate commissions outside of the standard 6% if the transaction merited. For
    instance, potential repeat customers might receive a favorable rate, as would those whose
    homes required some “wiggle room” in order to close the sale. Coldwell Banker,
    McMahan’s owner, often approved those reduced commissions.
    For its part, HSK notes that it, too, is a full-service brokerage firm that owns both
    Rector-Hayden and Semonin. Since 2003, it has done business in Louisville under the
    “Semonin” name and in Lexington as “Rector-Hayden.” According to HSK, it needs to
    compete for the best agents and, in order to pay them accordingly, must generate
    maximum income from commissions. To refute a point made by plaintiffs, HSK argues
    that it must continue to pay buyer’s brokers a commission of 3% or else risk losing them
    to listing agents who pay better commissions. However, HSK does not require its agents
    to charge the standard rate of 6%. Like McMahan, it will on occasion approve a
    commission under that rate for deal-specific reasons. Moreover, it does not share its
    internal pricing goals with other firms.
    Finally, it contends that the real estate market is inelastic: homeowners do not
    decide to sell their homes based upon commission rates but on other factors. Thus, HSK
    cannot create more demand for its services by decreasing its commissions. Given this
    No. 12-5947        Hyland, et al.v. HomeServices of Am., et al.                      Page 7
    consideration, there is no incentive for it to decrease its commission rate. In short,
    legitimate, non-collusive reasons govern the setting of commission rates in Kentucky.
    II.
    1. Did the District Court Err in Granting Summary Judgment?
    A. Standard of Review
    The rule governing whether summary judgment is appropriate is familiar: “The
    court shall grant summary judgment if the movant shows that there is no genuine dispute
    as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.
    R. Civ. P. 56(a). We review the grant of summary judgment de novo, but draw all
    reasonable inferences in favor of the non-moving party. Pierson v. Quad/Graphics
    Printing Corp., 
    749 F.3d 530
    , 535-36 (6th Cir. 2014). That said, if the non-moving party
    is unable to present sufficient evidence to permit a reasonable jury to find in its favor,
    summary judgment is appropriate. 
    Id. at 536
    (citing Anderson v. Liberty Lobby, Inc.,
    
    477 U.S. 242
    , 252 (1986)).
    In this case, plaintiffs contend that the district court erroneously held them to a
    heightened standard by misreading Matsushita Electrical Industrial. Co. v. Zenith Radio
    Corp., 
    475 U.S. 574
    (1986). Indeed, in its discussion of the circumstantial evidence
    presented by plaintiffs, the district court noted that a “stringent” summary judgment
    standard is appropriate in Section 1 Sherman Act cases. Mem. Op. at 39 (Page ID
    21942). In Matsushita the Supreme Court provided us with the following guidance:
    To survive petitioners’ motion for summary judgment,
    respondents must establish that there is a genuine issue of material fact
    as to whether petitioners entered into an illegal conspiracy that caused
    respondents to suffer a cognizable injury. This showing has two
    components. First, respondents must show more than a conspiracy in
    violation of the antitrust laws; they must show an injury to them resulting
    from the illegal conduct. . . .
    Second, the issue of fact must be “genuine.” Fed. Rules Civ.
    Proc. 56(c), (e). When the moving party has carried its burden under Rule
    56(c), its opponent must do more than simply show that there is some
    metaphysical doubt as to the material facts. . . . Where the record taken
    No. 12-5947        Hyland, et al.v. HomeServices of Am., et al.                      Page 8
    as a whole could not lead a rational trier of fact to find for the
    non-moving party, there is no “genuine issue for trial.”
    It follows from these settled principles that if the factual context
    renders respondents’ claim implausible–if the claim is one that simply
    makes no economic sense–respondents must come forward with more
    persuasive evidence to support their claim than would otherwise be
    necessary. . . .
    Respondents correctly note that “[o]n summary judgment the
    inferences to be drawn from the underlying facts . . . must be viewed in
    the light most favorable to the party opposing the motion.” But antitrust
    law limits the range of permissible inferences from ambiguous evidence
    in a § 1 case. Thus, in Monsanto Co. v. Spray-Rite Service Corp., 
    465 U.S. 752
    , 
    104 S. Ct. 1464
    , 
    79 L. Ed. 2d 775
    (1984), we held that conduct
    as consistent with permissible competition as with illegal conspiracy
    does not, standing alone, support an inference of antitrust conspiracy.
    
    Id., at 764,
    104 S.Ct., at 1470. To survive a motion for summary
    judgment or for a directed verdict, a plaintiff seeking damages for a
    violation of § 1 must present evidence “that tends to exclude the
    possibility” that the alleged conspirators acted independently.
    Respondents in this case, in other words, must show that the inference of
    conspiracy is reasonable in light of the competing inferences of
    independent action or collusive action that could not have harmed
    respondents.
    
    Matsushita, 475 U.S. at 585-88
    (citations and footnotes omitted).
    In Spirit Airlines v. Northwest Airlines, Inc., we acknowledged that the Supreme
    Court had observed that summary judgment is “appropriate where the antitrust claim
    simply makes no economic sense,” but went on to note that Matsushia “does not
    increase the non-movant’s burden on a motion for summary judgment.” 
    431 F.3d 917
    ,
    930-31 (6th Cir. 2005) (quotation omitted). Moreover, we have recently cautioned that
    summary judgment is generally discouraged in the antitrust context “due to the critical
    ‘role that intent and motive have in antitrust claims and the difficulty of proving
    conspiracy by means other than factual inference.’” In re Se. Milk Antitrust Litig., 
    739 F.3d 262
    , 270 (6th Cir. 2014) (quoting Expert Masonry, Inc. v. Boone Cnty., Ky.,
    
    440 F.3d 336
    , 341 (6th Cir. 2006)).
    No. 12-5947        Hyland, et al.v. HomeServices of Am., et al.                     Page 9
    While courts must continue to construe facts in favor of the non-movant, even
    in the antitrust context, they cannot ignore the clear teaching of Matsushita that “conduct
    as consistent with permissible competition as with illegal conspiracy does not, standing
    alone, support an inference of antitrust conspiracy.” 
    Matsushita, 475 U.S. at 588
    (citing
    Monsanto Co. v. Spray-Rite Service Corp., 
    465 U.S. 752
    , 764 (1984)). Moreover, we
    have echoed that teaching: “[C]ircumstantial evidence alone cannot support a finding of
    conspiracy when the evidence is equally consistent with independent conduct. . . . [It]
    must tend to exclude the possibility of independent conduct in order that an antitrust
    claim survive summary judgment.” Re/Max Int’l, Inc. v. Realty One, Inc., 
    173 F.3d 995
    ,
    1009 (6th Cir. 1999).
    Although the district court’s allusion to a “stringent” summary judgment standard
    in the antitrust context is imprecise, we are not overly troubled by the use of the
    adjective in the course of a lengthy opinion. Rather, we now turn to ask, in the course
    of our de novo review of its opinion, whether it applied the correct legal standard set out
    in Matsushita, Re/Max International, and Spirit Airlines in reaching its decision. For the
    reasons outlined below, we conclude that it did.
    B. The District Court’s Reasoning
    i. Basic Legal Concepts
    The district court noted that the existence of an agreement is the hallmark of a
    Section 1 Sherman Act claim. Mem. Op. at 5 (quoting In re Baby Food Antitrust Litig.,
    
    166 F.3d 112
    , 117 (3d Cir. 1999), (Page ID 21908). This agreement, in turn, can be
    found when the conspirators have a unity of purpose, common understanding, or a
    “meeting of minds in an unlawful arrangement.” Am. Tobacco Co. v. United States,
    
    328 U.S. 781
    , 810 (1946).
    Antitrust cases under Section 1 involve two modes of analysis depending on the
    nature of the claim. The “rule of reason” governs most allegations of restraints on trade.
    Under this analysis the court evaluates specific information about the industry, “its
    condition before and after the restraint was imposed, and the restraint’s history, nature,
    No. 12-5947        Hyland, et al.v. HomeServices of Am., et al.                  Page 10
    and effect.” In re Cardizem CD Antitrust 
    Litig., 332 F.3d at 906
    (quotation omitted). A
    “restraint” is unlawful it if is “unreasonable.” In re Se. Milk Antitrust 
    Litig., 739 F.3d at 270
    . In some cases, however, those restraints “are deemed unlawful per se because
    they have such predictable and pernicious anticompetitive effect, and such limited
    potential for procompetitive benefit.” In re Cardizem CD Antitrust 
    Litig. 332 F.3d at 906
    (quotation omitted). Horizontal price-fixing, which is alleged in this case, falls
    generally under the per se category. Nat’l Coll. Ass’n v. Bd. of Regents, 
    468 U.S. 85
    ,
    100 (1984).
    ii. Evidence of Conspiracy
    An antitrust conspiracy can be established by either direct or circumstantial
    evidence. Re/Max 
    Int’l, 173 F.3d at 1009
    . We turn first, as did the district court, to
    plaintiffs’ alleged direct evidence.
    a. Direct Evidence
    The district court began its review of the evidence by noting that direct evidence
    in the Section 1 antitrust context “must be evidence that is explicit and requires no
    inferences to establish the proposition or conclusion being asserted.” See In re Baby
    Food Antitrust 
    Litig., 166 F.3d at 118
    . In other words, direct evidence is “tantamount
    to an acknowledgment of guilt” while circumstantial evidence includes “everything else,
    including ambiguous statements.” In re High Fructose Corn Syrup Antitrust Litig., 
    295 F.3d 651
    , 662 (7th Cir. 2002).
    The district court turned first to the public hearing mentioned earlier that was
    held before the KREC on November 28, 2000. Plaintiffs maintain that the transcript of
    this hearing represents direct evidence of illegal collusion. The purpose of the hearing
    was ostensibly to share a survey of inducement laws in other states and to invite
    comments on the possible repeal of the KREC Rebate Ban. At the hearing, Ray Rector
    of Rector-Hayden expressed the opinion that the consumer pays for inducements in the
    form of higher fees or a decreased level of service. Jerry McMahan spoke at greater
    length and, as discussed earlier, supported maintaining commissions. Doug Myers of
    No. 12-5947         Hyland, et al.v. HomeServices of Am., et al.                     Page 11
    Semonin echoed these sentiments: “I’d like to see our competition based on our
    professional performance, not upon our brokerage fees. . . .” Broker Barbara Campbell,
    whose agency charged only a 4.5% commission, contended that her clients were
    contacted by brokers who would tell them that other realtors “would not show my
    clients’ homes to their buyers so long as they continue to do business with Campbell
    Realty.” Another broker, Steven Gavin, reported harassment for offering only 2% to the
    buyer’s broker.
    The district court assessed this evidence and concluded that it did not constitute
    “direct evidence that Defendants conspired to fix real estate commissions at a supra-
    competitive 6%.” Mem. Op. at 13. The court observed that it had reviewed the
    transcript of the KREC meeting and found that plaintiffs have taken remarks made by
    individual realtors “out of context and construed them in a highly-strained manner.” 
    Id. at 14.
    We agree with this assessment.         Like the district court, we view Jerry
    McMahan’s statements at the hearing as ambiguous at best and they therefore do not
    establish direct evidence of a conspiracy. McMahan was highlighting the fact that his
    “full-service” firm offered more to its clients than his internet rivals and thereby justified
    its higher commission rate. Also absent in the record is any comment by McMahan
    suggesting that brokers negotiate among themselves their respective commission rates.
    With respect to those who spoke about having undergone harassment for offering lower
    rates, the district court observed that these speakers are not parties to this action, nor did
    they implicate defendants. Furthermore, “[a] finder of fact would need to infer that a
    buyer’s broker fee of 3% always resulted in a supra-competitive full commission rate of
    6% and that these individuals were harassed for failing to set a full commission rate of
    6%.” Mem. Op. at 15.
    In short, it is our assessment, consonant with that of the district court, that the
    “direct” evidence relied upon by plaintiffs falls far short of the standard that it be
    “explicit and require[] no inferences.” In re Baby Food Antitrust 
    Litig., 166 F.3d at 118
    .
    No. 12-5947        Hyland, et al.v. HomeServices of Am., et al.                 Page 12
    With that, we turn to the much closer issue of whether the proffered circumstantial
    evidence precludes summary judgment for defendants.
    b. Circumstantial Evidence
    Evidence of “conscious parallelism,” also referred to as “oligopolistic price
    coordination,” can support such a claim based upon circumstantial evidence. In re Baby
    Food Antitrust 
    Litig., 166 F.3d at 121
    . As the district court put it, “When competitors
    in a [concentrated] market establish their prices, not by agreement, but rather in a
    consciously parallel fashion, this may provide probative evidence of an understanding
    between competitors to fix prices.” Mem. Op. at 16 (citations omitted). However, that
    is not necessarily the case: “Because of their mutual awareness, oligopolists’ decisions
    may be interdependent although arrived at independently.” 
    Id. (citation on
    omitted).
    Thus, “‘[t]he law is settled that proof of consciously parallel business behavior is
    circumstantial evidence from which an agreement, tacit or express, can be inferred but
    that such evidence, without more, is insufficient unless the circumstances under which
    it occurred make the inference of rational, independent choice less attractive than that
    of concerted action.’” 
    Id. (quoting Bogosian
    v. Gulf Oil Corp., 
    561 F.2d 434
    , 446 (3d
    Cir. 1977)).
    This court has set out the following considerations, sometimes referred to as
    “plus factors,” in determining when circumstantial evidence amounts to a finding of
    concerted action: 1) whether defendants’ actions, if taken independently, would be
    contrary to their economic interests; 2) product uniformity; 3) whether the defendants
    have been uniform in their actions; 4) whether the defendants have exchanged or have
    had the opportunity to exchange information relative to the alleged conspiracy; and
    5) whether the defendants have a common motive to conspire or have engaged in a large
    number of communications. See Re/Max 
    Int’l, 173 F.3d at 1009
    ; Wallace v. Bank of
    Bartlett, 
    55 F.3d 1166
    , 1168 (6th Cir. 1995). “However, circumstantial evidence alone
    cannot support a finding of conspiracy when the evidence is equally consistent with
    independent conduct.” Re/Max 
    Int’l., 173 F.3d at 1009
    . The district court noted that
    these five factors are considered to discern whether the “supra-competitive
    No. 12-5947        Hyland, et al.v. HomeServices of Am., et al.                  Page 13
    6% commission rate was conscious and not the result of independent business
    decisions.” Mem. Op. at 17 (Page ID 21920).
    The district court then reviewed evidence of parallel pricing behavior and the
    plus factors. It found them to be insufficient to withstand summary judgment. In
    reaching this conclusion, the court relied upon these conclusions:
    o       “Plaintiffs’ evidence of parallel pricing shows merely that each
    Defendant had a policy of charging a minimum commission of 6% and
    that each Defendant occasionally deviated from its respective policy for
    various reasons.” Mem. Op. at 30 (Page ID 21933).
    o       “The prevalence of the 6% rate, then, is just as consistent with
    independent pricing decisions. The existence of a conspiracy cannot be
    inferred solely on the basis that Defendants tended to charge the same
    amount for their services.” Mem. Op. at 30-31 (Page ID 21933-34).
    o       “The Sixth Circuit has unequivocally proclaimed that ‘setting
    cooperative sales-commission rates is not price fixing: it has no relation
    to the amount charged to clients for an agent’s service.’ Re/Max 
    Int’l, 173 F.3d at 1025
    . . . . Thus, even if it was necessary for a listing broker
    to offer a 3% buyer’s broker commission to the cooperating broker as an
    incentive, the listing broker is free to charge his client 4%, 5%, 10%, or
    even 3% plus a flat fee as [plaintiffs’ expert] Dr. Yavas has suggested
    may occur in a perfectly competitive market.” Mem. Op. at 31-32 (Page
    ID 21934-35).
    o       “Plaintiffs’ experts and Defendants both agree that real estate brokerage
    services are inelastic in that the number of property listings does not
    respond to changes in commission rates. . . . Accordingly, evidence that
    Defendants have not decreased their commission rates is not evidence
    that they acted contrary to their economic self-interest.” Mem. Op. at 32-
    33 (Page ID 21935-36).
    o       “[T]he homogenous nature of real estate services, on its own, provides
    no evidence to support an inference of collusion. The evidence shows
    that Defendants’ commission rates did decrease by a small, though
    statistically significant degree, as the price of a home [in]creased. . . .
    Nevertheless, charging a standard commission rate across the board and
    retaining increasing profits from the sale of higher priced homes is
    consistent with rational business judgment and not probative of an illegal
    agreement to fix commissions.” Mem. Op. at 34 (Page ID 21937).
    o       “[A]wareness of other real estate companies’ commission rates does not
    tend to rule out independent conduct. As an initial matter, the evidence
    No. 12-5947       Hyland, et al.v. HomeServices of Am., et al.                   Page 14
    does not support Plaintiffs’ contention that, for at least part of the Class
    Period, the full commission was listed on the MLS. Mr. McMahan
    testified that he was unsure when this practice stopped, but that Lisa
    Stephenson would know. Ms. Stephenson testified that the full
    commission had not been listed at least since 1996. . . . Additionally
    there is no evidence that individuals with pricing authority shared or
    discussed their respective commission rates. . . . [M]ere awareness of
    competitors’ commissions does not support an inference that Defendants
    agreed to conspire.” Mem. Op. at 34-35 (Page ID 21937-38).
    o       “[Plaintiffs’ expert] Mr. French notes that brokers and agents must
    cooperate with one another to facilitate real estate sales. . . . Thus,
    cooperation and communication between Defendants and knowledge of
    what other brokers charge is just as consistent with independent
    conduct.” Mem. Op. at 36 (Page ID 21939).
    o       With respect to Jerry McMahan’s comment at the 2000 KREC meeting
    that “the most unprofessional thing we can do in this business is cut our
    commissions,” the court stated: “[A] consideration of Mr. McMahan’s
    comments in the context of the purpose of the public hearing leads to a
    more benign interpretation: that Mr. McMahan, in expressing his view
    that relaxing the KREC Rebate Ban and allowing inducements will help
    brokers compete with the Internet brokers, differentiates between
    inducements which cut commission rates–which he views as
    unprofessional–and non-monetary inducements such as home warranties.
    A plausible inference is that Mr. McMahan thought full service brokers
    should not compete with the Internet brokers by offering inducements in
    the form of rebates, but should compete with the Internet brokers by
    making their services worth what they charge–whatever that may be.”
    Mem. Op. at 37 (Page ID 21940).
    o       “Plaintiffs have presented no evidence of any parallel change or impact
    on Defendants’ pricing decisions after any alleged communication or
    invitation that was made at the KREC public hearing or any other
    meeting between Defendants.” Mem. Op. at 38 (Page ID 21941).
    o       “Plaintiffs contend that Defendants had a common motive to conspire.
    However, Defendants’ motive to maximize profits cannot support an
    inference of a conspiracy. . . . If this Court were to find that Defendants’
    motive to maximize profits supported an inference of an illegal
    conspiracy, then all businesses would be subject to anti-trust liability.”
    Mem. Op. at 39 (Page ID 21942.)
    No. 12-5947        Hyland, et al.v. HomeServices of Am., et al.                   Page 15
    Having reviewed this evidence, which it characterized as circumstantial, the court held
    that “[p]laintiffs have not presented sufficient evidence to meet the stringent summary
    judgment standard in § 1 antitrust cases.” 
    Id. We quote
    from the district court’s memorandum opinion at length for two
    reasons. First, after our own independent review of the record, we agree with its
    conclusion that the circumstantial evidence is insufficient. As the above quoted material
    makes clear, the evidence does not, as it must, eliminate a finding that the same actions
    are “equally consistent with independent conduct.” Re/Max 
    Int’l, 173 F.3d at 1009
    .
    Second, the district court’s opinion was originally filed under seal and appears not to be
    readily available on the most common legal databases. Since we rely upon its reasoning,
    we feel obliged to quote it at some length here.
    Finally, we are mindful that plaintiffs have come forward with a good deal of
    circumstantial evidence that supports its theory of collusion. What is missing, however,
    is the critical element mentioned in Matsushita and reiterated in Re/Max International:
    countering the conclusion reached by the district court that the conduct at issue was also
    consistent with permissible competition and therefore does not support an inference of
    antitrust conspiracy. 
    Matsushita, 475 U.S. at 588
    .
    2. Did the District Court Err in Limiting Expert Testimony?
    In this case, there were three expert witnesses: Drs. French and Yavas for
    plaintiffs; and Dr. Kleinrichert for defendants. Both sides filed motions to exclude
    testimony of these experts in whole or in part. In the end, the district court granted
    defendants’ motion to exclude the expert testimony of Drs. French and Yavas with
    respect to their ultimate opinions that a price-fixing conspiracy existed. Memorandum
    Opinion & Order at 23, filed July 3, 2012.
    With respect to Dr. French’s opinions, the district court held as follows:
    [T]he Court will not allow Dr. French to testify as to his ultimate opinion
    that a conspiracy likely existed among the defendants during the class
    period. Such a conclusion embraces a legal conclusion which depends
    on anti-trust doctrine in which Dr. French is not qualified to offer an
    No. 12-5947        Hyland, et al.v. HomeServices of Am., et al.                   Page 16
    opinion. Further, Dr. French fails to differentiate between conscious
    parallelism and illegal, collusive price-fixing.
    Mem. Op. at 11 (citation omitted). The court reached an identical conclusion with
    respect to Dr. Yavas.
    Federal Rule of Evidence 704(a) states that “[a]n opinion is not objectionable just
    because it embraces an ultimate issue.” Fed. R. Evid. 704(a). Nonetheless, a witness
    may not testify to a legal conclusion. Berry v. City of Detroit, 
    25 F.3d 1342
    , 1353 (6th
    Cir. 1994). Our review on this issue is for an abuse of discretion. Pluck v. BP Oil
    Pipeline Co., 
    640 F.3d 671
    , 676 (6th Cir. 2011).
    We detect no abuse of discretion on the part of the district court. For the most
    part, the district court rejected defendants’ challenge to the expert testimony. Given that
    the experts were free to testify at length as to all the other aspect of the real estate
    market, the exclusion of the challenged testimony, which called for a legal conclusion,
    is within the purview of the district court.
    3. Alter Ego Liability of HSA
    Among the other things considered by the district court was the liability of HSA
    for actions taken by HSK in the alleged price-fixing conspiracy. The district court
    rejected liability for HSA on these grounds:
    The court . . . finds no evidence supporting Plaintiffs’ argument
    that HSA controlled or encouraged Semonin or Rector Hayden’s alleged
    anticompetitive conduct. There is no evidence that HSA discussed
    commission policies with Semonin or Rector Hayden, set commission
    policies for Semonin or Rector Hayden, or encouraged agreement or
    consensus on commission policies between the two. Instead, the
    evidence merely shows circumstances typical of any parent-subsidiary
    relationship. Without incurring liability, a parent may articulate and
    formulate general policies and procedures for its subsidiaries; may
    coordinate and cooperate and regularly share financial and operating
    information; may approve its subsidiaries’ budgets; and may be directly
    involved in financing and micro-management of its subsidiaries. . . .
    Next, Plaintiffs contend that HSA should be held liable for the
    alleged conspiracy under an alter ego theory of liability. As an initial
    No. 12-5947        Hyland, et al.v. HomeServices of Am., et al.                   Page 17
    matter, Plaintiffs have not pled an alter ego or piercing the corporate veil
    claim in their Fourth Amended Complaint and cannot now, when faced
    with summary judgment, assert this new theory of liability.
    Nevertheless, Plaintiffs have not produced evidence which would justify
    piercing the corporate veil to hold HSA liable for the alleged actions of
    Semonin and Rector Hayden. . . .
    Here, Plaintiffs allege that HSA “refused to produce any
    documentary evidence showing that its relevant ‘subsidiaries’ respected
    basic corporate requirements such as holding regular Shareholder and
    Board Meetings, promulgating By-Laws and Resolutions, maintaining
    Minute Books, or requiring its Officers and Directors to know the duties
    and responsibilities imposed by Kentucky law . . . .”
    Plaintiffs have produced no evidence that HSA so dominated
    HSK’s finances, business practices, and policies as to justify piercing the
    corporate veil.
    Mem. Op. at 44-46 (citation omitted).
    This issue need not detain us long, particularly in light of the cursory argument
    advanced by plaintiffs on appeal. First, because we hold that HSK did not engage in
    price fixing, HSA has no derivative liability. Moreover, our independent review of the
    record makes clear to us that, as the district court concluded, there is insufficient
    evidence to support piercing the corporate veil.
    III.
    The judgment of the district court is affirmed.