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For a second time, the National Association of Realtors and other trade groups have asked a judge to throw out a Michigan lawsuit over the so-called three-way agreement.
The lawsuit first began in August, when two Michigan brokers and an agent sued over what they said were antitrust violations. The lawsuit specifically targeted the requirement that industry members belong to local, state and national Realtor organizations in order to access their multiple listing service.
The plaintiffs accused the trade groups of civil conspiracy, economic coercion and unfair restraint of trade in violation of state and federal antitrust laws.
But in a filing Wednesday, NAR and other defendants asked a judge to dismiss the case. The filing states that the plaintiffs have “not shown how the alleged conduct has impacted competition” and that the allegations are “vague, conclusory, and lack plausible facts necessary to state an antitrust claim,” among other things. The filing also argues that the plaintiffs haven’t shown that they suffered any injury from the alleged antitrust violations.
Moreover, the filing states that the lawsuit is really a “collateral attack” on the antitrust commission settlement NAR reached last year. According to the filing, such an attack is “improper and untimely,” and the settlement is part of unrelated class action litigation.
“It is difficult to ascertain the import of plaintiffs’ allegations about the settlement to their claims,” the filing states.
News of the filing was first reported by Real Estate News.
The plaintiffs did file the suit in response to the settlement. The argument outlined in the initial complaint was that the settlement-prompted move to eliminate “the guaranteed broker commission” — or, offers of compensation from sellers’ agents to buyers’ agents — “greatly diminished any value created by the compulsory membership requirement.” Previously, such offers of compensation were made in the MLS, but the settlement barred that practice.
“This truly eliminated the sole purpose of the NAR and MAR-sponsored MLS systems by eliminating the guarantee of compensation between brokers,” the original complaint, from August, stated.
The plaintiffs — brokers Douglas Hardy and Glenn Champion, and agent Dylan Tent — also argued that requiring membership in various Realtor associations was done “to essentially hold hostage access to the MLS,” and that NAR’s settlement-prompted rule changes created problems including “potentially discriminatory pricing” and fair housing violations.
In addition to NAR, the plaintiffs also named as defendants the Michigan Association of Realtors, the Grosse Pointe Board of Realtors, the Greater Metropolitan Association of Realtors, the North Oakland County Board of Realtors, and Michigan’s largest MLS, Realcomp II.
Aside from Michigan, lawsuits challenging the requirement that agents belong to local, state and national Realtor organizations have been filed in Pennsylvania, Texas, California and Louisiana.
NAR and other defendants previously asked a judge to dismiss the Michigan case in November. At the time, they argued that the “plaintiffs have alleged nothing more than a desire to have membership benefits without membership.”
“The nine paragraphs of factual allegations do not set forth coherent legal theories, let alone the required factual particularity needed to meet the pleading standard for an antitrust complaint,” the November motion to dismiss argued.
The plaintiffs responded by filing an amended complaint later that month. However, NAR and the other defendants argued in this week’s motion to dismiss that the amended complaint also failed to make an adequate argument and “fails for the same reasons as the initial complaint.”
The fate of the case is now up to the judge, who has to decide if the case should be thrown out or allowed to proceed.
Read the full motion to dismiss here (if the document doesn’t appear, refresh the page):
