Top Agent Network asked for the order two weeks ago in an attempt to stop the National Association of Realtors from enforcing a policy designed to curtail pocket listings.

A federal district court has denied an application for a temporary restraining order from Top Agent Network, a firm that operates a members-only private group of top-producing real estate agents. TAN asked for the order two weeks ago in an attempt to stop the National Association of Realtors from enforcing a policy designed to curtail pocket listings.

On May 11, TAN filed a lawsuit alleging NAR and fellow defendants the California Association of Realtors (C.A.R.) and the San Francisco Association of Realtors (SFAR) have violated a slew of antitrust and unfair competition laws for adopting the Clear Cooperation Policy, also known as MLS Policy Statement 8.0, which requires listing brokers to submit a listing to their multiple listing service within one business day of marketing a property to the public. The controversial rule is meant to effectively end the growing practice of publicizing listings for days or weeks without making them universally available to other agents.

The Clear Cooperation Policy implementation deadline was May 1, and some MLSs have instituted hefty fines to enforce it, including SFAR. Some brokerages, including Compass and The Agency, and discount franchisor Assist-2-Sell have come out against the policy while MLSs, Redfin’s Glenn Kelman and others argued in favor of it, in part because they believe it promotes fair housing.

On May 13, TAN filed a motion for a temporary restraining order and for a preliminary injunction preventing the three Realtor associations from enforcing the policy until the resolution of the lawsuit. The filing argued that TAN had already lost subscribers that cite the policy as a reason to not renew their memberships and that the policy’s continued enforcement would cause TAN to suffer “irreparable harm.”

But in a May 19 legal filing opposing the restraining order, attorneys for NAR argued that TAN’s delay of at least seven months to take legal action “shows that it does not face the threat of imminent, irreparable harm, which means its motion should be denied.” NAR’s attorneys also pointed out that MLSs in Chicago and Washington D.C. (MRED and Bright MLS, respectively) had adopted policies similar to the Clear Cooperation Policy long before all Realtor-affiliated MLSs were required to implement the policy on May 1.

“If the Policy actually threatened to irreparably harm TAN, it surely would have rushed to Court to seek injunctive relief in those major markets long before now, and tellingly, TAN has not shuttered operations in those cities as a result of the Policy or similar rules,” NAR said in the filing.

NAR pointed out that nothing in the policy forces brokers to exclusively use a Realtor-affiliated MLS, prevents them from using TAN’s services, or prohibits TAN from offering its services. “Indeed, the Policy expressly allows brokers to post their listings to both the local multiple listing service and elsewhere (like TAN’s network),” the trade group said.

Furthermore, the trade group said an injunction would actually irreparably harm NAR, the other defendants, their affiliates, brokers, and real estate buyers and sellers.

“TAN seeks a mandatory injunction, which would not only require NAR to rescind the Policy, it would require every Realtor association-owned multiple listing service in the country to change their policies (and to do so in the midst of shutdowns caused by the COVID-19 pandemic),” NAR said.

“While the Policy was slowly and methodically adopted by NAR to ensure it did not disrupt real estate sales, an abrupt change in multiple listing service operations from a temporary restraining order or preliminary injunction would undoubtedly harm everyone involved in the residential real estate industry throughout the country.”

Citing a case called Winter v. NRDC, NAR’s filing said TAN had failed to “‘demonstrate that irreparable injury is likely,’ not merely a possibility, ‘in the absence of an injunction.'”

In his order, Judge Vince Chhabria agreed. “The application for a temporary restraining order is denied because Top Agent Network has not carried its burden under Winter v. Natural Resources Defense Council,” he wrote.

The order allowed TAN to file a supplemental brief in support of a preliminary injunction by June 4, to which the defendants could respond to by June 11. “The briefs should focus on Top Agent Network’s likelihood of success on the merits. A preliminary injunction hearing is set for 10:00 a.m. on June 25, 2020 and will take place by Zoom,” Chhabria wrote.

In an emailed statement, TAN’s attorney, Paul Llewellyn of Lewis & Llewellyn LLP, told Inman, “The Court is clearly giving this matter careful consideration and has specifically invited further briefing on the merits. We look forward to submitting our additional brief and to the hearing on the preliminary injunction motion in a few weeks’ time. We continue to believe that NAR’s policy is unlawful, bad for agents, and bad for the public.”

In a separate statement, TAN CEO and Founder David Faudman said, “We believe the decision on how and where to market a home should be between an informed seller and their agent. This important fight is about protecting consumer choice and the rights of agents to communicate with each other in the service of their clients. ”

Mantill Williams, NAR’s vice president of communications, told Inman the judge’s decision to deny the restraining order “supports our view that this lawsuit has no legal merit.”

“The Clear Cooperation Policy was created in order to protect the best interest of consumers. It ensures greater transparency and competition between real estate listings and between brokers, while still addressing privacy concerns. This policy benefits both sellers and buyers and promotes equal opportunity for all,” he said in an emailed statement.

C.A.R. and SFAR both submitted legal filings joining in NAR’s opposition to the restraining order. Both said they had informed their members of the upcoming policy in December or January, respectively, and emphasized that they should not be in this case at all.

SFAR, for instance, noted that the policy is mandatory for all NAR-affiliated MLSs and SFAR “has no discretion whether to follow the policy, and it has no power to change the Policy.” And C.A.R. pointed out that it is an independent corporation that does not own or operate an MLS and does not enforce MLS policies.

“C.A.R.’s only role with respect to the Policy is that it provides truthful and practical guidance and information about applicable policies to its members. Thus, C.A.R. should not be subject to this motion or this case, and TAN does not have a likelihood of success against C.A.R.,” attorneys for C.A.R. said.

In an emailed statement, C.A.R. told Inman,  “We are pleased that the judge rejected the proposed temporary restraining order as we believe the case is baseless, particularly as to C.A.R.  … C.A.R. does believe that the MLS is a very pro-competitive tool that maximizes efficiencies for not only the industry but also for the buying and selling public.”

SFAR did not respond to a request for comment.

Email Andrea V. Brambila.
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