In the latest installment of the National Association of Realtors’ antitrust lawsuit woes, former pocket listing service The PLS has asked the U.S. Supreme court to reject NAR’s request to overturn a lower court’s ruling on the trade group’s pocket listing ban.
The PLS, now known as The NLS (but still referred to as “The PLS” in legal filings), filed an opposition brief on December 6.
The brief was in response to the “writ of certiorari” — which NAR filed jointly with BrightMLS, California Regional MLS (CRMLS) and Midwest Real Estate Data (MRED) on Sept. 23. In its petition, NAR asked the Supreme Court to review a ruling by the Ninth U.S. Circuit Court of Appeals made in April.
The April ruling overturned a lower court’s decision to throw out a case filed by The PLS.
In the initial lawsuit, The PLS alleged that NAR and the other defendants had violated the Sherman Antitrust Act and California’s Cartwright Act for adopting a policy known as the Clear Cooperation Policy. This policy requires listing brokers to submit a listing to their MLS within one business day of marketing a property to the public.
In addition to attracting attention from The PLS, this policy piqued the interest of the U.S. Department of Justice, which is currently investigating NAR over the CCP and other rules.
“It would be hard to fathom a more obviously anticompetitive agreement than the Clear Cooperation Policy,” The PLS’ opposition brief stated. “PLS introduced competition in the market for real estate listing services by giving both sellers’ agents and buyers’ agents a choice.”
In its initial filing with the Supreme Court, NAR wrote that the Ninth Circuit court’s decision to overturn the dismissal of The PLS’s case was “contrary and erroneous.” In addition, the trade organization wrote that the decision was not in line with prior case law, “sowing confusion and inviting future courts to ignore or misapply fundamental principles of antitrust law.”
In addition, NAR argued against the lower court’s interpretation of the relevant market in the case, and the lower court’s analysis on the relevant market’s legal right to sue.
NAR considers the relevant market to be MLSs as “a home-listing platform for buyers and sellers” and therefore argues that the plaintiffs must allege a plausible injury to participants on both sides of the real estate market — not just to sellers, but also to buyers.
The PLS, on the other hand, argues that the relevant market is MLSs as listing services for listing agents and buyers agents. It also alleges that the CCP harmed agents on both sides of the transactions by limiting competition to Realtor-affiliated MLSs and threatening agents with MLS membership suspension if they did not comply with the policy.
“PLS enabled sellers’ agents to choose a listing service that allowed them greater discretion to preserve their clients’ privacy and discretion,” The PLS’ opposition brief states. “But that choice is wiped away if every listing must also be posted on an MLS within 24 hours. PLS gave buyers’ agents the choice of a database granting access to pocket listings that previously would be known only through word of mouth. By forcing all PLS listings to transform into non-pocket listings on MLSs, the Clear Cooperation Policy wiped that choice away too. In short, by enacting the Clear Cooperation Policy, NAR and its affiliated MLSs destroyed the opportunity of both buyers’ agents and sellers’ agents to choose the database service they liked best and forced them to use the MLS instead.”
According to The PLS’ filing, forcing agents to stop listing solely on its site had “devastating consequences” for agents, sellers, buyers and The PLS.
“[A]gents were forced to pay more money for a less valuable service — a service that eliminated both sellers’ freedom of choice and buyers’ opportunities to access a nationwide database of pocket listings,” the filing reads. “Home buyers and sellers lost the ability to choose their preferred ways to buy and sell houses. And PLS lost listings, participants, commercial opportunities, and access to capital.”
The PLS’ filing also pushed back against NAR’s statement that antitrust injuries to real estate agents lack standing to sue because, as members of NAR, they are alleged “co-conspirators” in the adoption of the CCP.
For its part, The PLS believes that agents are not co-conspirators.
“To the contrary, PLS alleges that affected real estate agents resisted promulgation of the Clear Cooperation Policy,” the filing states. “To the extent those agents complied with the Clear Cooperation Policy, it was only because MLSs threatened them with fines and expulsion if they did not. Having attempted to squelch those dissenters’ efforts, petitioners cannot turn around and claim that the dissenters are ‘coconspirators’ whose injuries (such as paying supracompetitive prices to access MLSs) must be disregarded.”
In an emailed statement responding to The PLS’s opposition brief, Mantill Williams, NAR’s vice president of communications, wrote: “The opposition filing overlooks what has been our core position from the start: the need to preserve a practice that provides the most information and the best possible market for home buyers and sellers. As was noted by the federal Judge who initially dismissed this case, the Clear Cooperation Policy (CCP) provides consumers with “’access to more information regarding market conditions, enabling them to make better informed choices about the bundle of real estate brokerage services that will best serve their needs.’” As a leading advocate for homeownership, NAR determined that CCP was needed as a crucial protection for consumers, and it was overwhelmingly adopted. It ensures that publicly marketed property listings are widely available and accessible to all consumers.”
It remains to be seen if the Supreme Court will “grant cert” to review the case, but the parties may have an answer as quickly as two weeks after the filing of the opposition brief.
As is standard practice, four of the nine justices on the Supreme Court must vote to accept a case.
According to the federal government, the Supreme Court typically only agrees to hear a case if it “could have national significance, might harmonize conflicting decisions in the federal Circuit courts, and/or could have precedential value.” Each year, the court accepts just 100-150 of the more than 7,000 cases it receives.
