Lower court suggested TAN was the wrong plaintiff to bring suit because its business model is itself allegedly anticompetitive, but TAN says the court’s order was “erroneous.”

Top Agent Network, a firm that operates a members-only private group of real estate agents, is appealing a district court’s decision to toss its antitrust lawsuit against the National Association of Realtors over a policy designed to curtail pocket listings.

In May 2020, Top Agent Network filed a federal lawsuit alleging NAR and fellow defendants the California Association of Realtors (C.A.R.) and the San Francisco Association of Realtors (SFAR) violated a slew of antitrust and unfair competition laws for adopting the Clear Cooperation Policy, 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 rule is meant to effectively end the practice of publicizing listings for days or weeks without making them universally available to other agents. Some MLSs have instituted hefty fines to enforce the policy, including SFAR.

In July 2020, the court denied Top Agent Network’s motion for a preliminary injunction against the policy, and subsequently tossed two amended complaints from the firm, the last of which dismissed C.A.R. as a defendant in the suit.

Last month, Judge Vince Chhabria dismissed Top Agent Network’s third amended complaint. In his order, Chhabria said that the firm’s complaint had laid out “a reasonable argument” that the Clear Cooperation Policy “is so broad that its overall effect on the market for homes is anticompetitive.” But he suggested that Top Agent Network was the wrong plaintiff to bring an antitrust suit over the policy because its business model, which restricts membership to the top 10 percent of agents in a market by sales volume, is itself anticompetitive.

Judge Vince Chhabria

Because of Top Agent Network’s exclusivity, when a seller lists a home with one of its agents without listing it in the local MLS, it’s reasonable to infer that competition for that home is decreased, according to Chhabria.

Chhabria highlighted the role of the MLS as key to how the firm’s members earned their status as top agents in the first place and contended that now “TAN agents want to pull the ladder up behind them” and not allow other agents to do the same.

He dismissed TAN’s suit with prejudice, meaning permanently. Still, TAN had the option of appealing the decision to a higher court. On Sept. 10, Top Agent Network filed a notice of appeal to the U.S. Court of Appeals for the Ninth Circuit.

David Faudman

“While we agree with the court that ‘it may well be that NAR’s [Clear Cooperation] policy has anticompetitive effects,’ we disagree with the court’s conclusion that TAN’s business model makes it ineligible for protection under the antitrust laws,” Top Agent Network CEO David Faudman told Inman in an emailed statement. “We believe that the court’s order was erroneous and will be reversed on appeal.”

Mantill Williams

In an emailed statement, Mantill Williams, NAR’s vice president of communications, told Inman, “NAR continues to believe this lawsuit has no merit. The Clear Cooperation Policy (CCP) was created to ensure that publicly marketed property listings are widely available and accessible to ensure equity among consumers. NAR remains confident we will prevail.”

Top Agent Network’s opening brief on the appeal is due by Dec. 20 and reply briefs from NAR and SFAR are due by Jan. 18. SFAR declined to comment for this story.

The Clear Cooperation Policy was controversial even before it was enacted in 2019 and has since been a target on multiple fronts. Former pocket listing service The PLS also filed an antitrust case against NAR over the policy in May 2020 and is currently appealing a district court decision to throw out that suit. The U.S. Department of Justice (DOJ) has also hinted that the policy may be in its crosshairs.

Some real estate brokers have threatened mutiny over the policy’s exemption for office exclusives, or listings marketed entirely within a brokerage without submitting them to an MLS. They argue it inadvertently benefits large, national brokerages at the expense of smaller, independent brokerages.

Email Andrea V. Brambila.

Like me on Facebook | Follow me on Twitter

MLS | NAR | realtors
Show Comments Hide Comments

Comments

Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Success!
Thank you for subscribing to Morning Headlines.
Back to top
Limited time: Get 30 days of Inman Select for $5.SUBSCRIBE×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription