In its latest legal move, the National Association of Realtors (NAR) has petitioned the U.S. Supreme Court to overturn a lower court’s ruling on the trade group’s pocket listing ban.
In a writ of certiorari filed jointly on Sept. 23 with BrightMLS, California Regional MLS (CRMLS) and Midwest Real Estate Data (MRED), NAR asks 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 former pocket listing service The PLS, now known as The NLS(it is still referred to as “The PLS” in legal filings), allowing the case to proceed.
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 form 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.
As is standard practice, four of the nine justice 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.
In its petition, NAR, the country’s largest lobbyist, writes 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 line with prior case law, “sowing confusion and inviting future courts to ignore or misapply fundamental principles of antitrust law.”
The petition also states: “If left to stand, the Ninth Circuit’s ruling will subvert antitrust law and benefit alleged conspirators to the detriment of consumers and lawful competition.”
NAR’s filling asks the Supreme Court to consider whether a court can decide not to analyze both sides of a market, contrary to NAR’s interpretation of previous case law, and whether a competitor can establish the legal right to sue based on harm to alleged members of the conspiracy, given that The PLS’s amended complaint asserts that brokers, as members of NAR, conspired to adopt the Clear Cooperation Policy.
In regard to the first question, 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. However, The PLS and the DOJ feel that The PLS should not have to argue that the CCP harms consumers or buyers in order for the antitrust case to go forward.
With regard to the second question, NAR write in the petition: “Brokers are not the relevant consumers to assess whether the Clear Cooperation Policy reduces competition because, according to the Amended Complaint, brokers are co-conspirators. Any reduction of competition to them is legally irrelevant. Instead, buyers and sellers, as the first consumers outside the conspiracy, are the relevant consumers.”
In its ruling, however, the appeals court concluded that The PLS “adequately alleged” antitrust injury by alleging that the CCP was part of a group boycott to prevent The PLS from competing with MLSs, resulting in agents having fewer choices, inflated prices and lower-quality products.
“This petition seeks to preserve the ability to provide the most information and the best possible market for buyers and sellers of home real estate,” Mantill Williams, NAR’s vice president of communications, wrote in an emailed statement. “After originally dismissing this case, a federal Judge noted in his opinion that 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 and review the case. According to the filing, The PLS had until Oct. 27 to respond to NAR’s petition.
At the time of publication, requests for comment from CRMLS, MRED and The PLS had not been returned. BrightMLS declined to comment on the matter.