Compass filed an antitrust lawsuit against California Regional Multiple Listing Service on Friday, 11 days after the MLS sued Compass in federal court, and said it will pay certain CRMLS fines issued to agents at its company-owned brokerages.
The lawsuit, announced in a Compass press release, challenges CRMLS rules that fine agents who publicly market a listing without submitting it to the MLS. Compass alleges the rules are anticompetitive and is seeking a court order ending them, along with damages, which antitrust law triples, according to the release.
CRMLS sued Compass first earlier this month, one day before a deadline Compass had set for the MLS to stop fining agents under the rules. That suit asks a federal judge in New York to declare CRMLS Rules 7.9 and 7.9.1 lawful under the Sherman Antitrust Act and California’s Cartwright Act and to bar Compass from pursuing antitrust claims over them.
Compass to pay agents’ CRMLS fines
Under the offer announced Friday, Compass will pay CRMLS fines for agents affiliated with Coldwell Banker Realty, Compass and Sotheby’s International Realty who market homes outside CRMLS at a client’s written direction, according to the release. Agents must send Compass the fine notice and assign the company their right to sue CRMLS over the fine. Compass said it will add those claims to its lawsuit.
Compass said in the release that CRMLS fines agents up to $2,500 for publicly marketing a property kept off the MLS, and that agents can face suspension or expulsion. Under CRMLS’ citation policy, a Rule 7.9 violation carries a fine of 1 percent of the list price, with a minimum of $500 and a maximum of $2,500. Agents who neither pay nor request a review within 20 days can be suspended, and agents cited more than three times in a calendar year are referred to their local association for discipline that can include termination of MLS services.
CRMLS said in its complaint that enforcement cases involving Compass listings have increased, and that 10 Compass cases remained open when it filed, eight of them under appeal, Inman reported on Oct. 7.
Compass’ case against the rules
CRMLS rejected Compass’ Sept. 8 demand letter on Sept. 30, the same day Compass CEO Robert Reffkin told attendees at the Council of Multiple Listing Services’ Open House conference that the company planned to begin suing MLSs in mid-October. Compass says MLSs covering roughly 350,000 agents in 12 states and Washington, D.C., already allow public marketing of listings kept off the MLS.
“Homeowners should be able to publicly market any listing — including office-exclusive listings — without their agent facing thousands of dollars in fines,” a Compass International Holdings spokesperson told Inman earlier this month.
“Every single member of CRMLS’s Board of Directors is a direct competitor of Compass and its agents, and they are dictating how Compass and its agents can and cannot compete, how Compass and its agents can and cannot serve their clients, and how homeowners can and cannot market their own homes,” Compass wrote in the complaint.
Compass argued that builders and developers are not subject to the rules and that individual homeowners should have the same options.
CRMLS’ case for the rules
CRMLS said in its Sept. 30 response to Compass that a seller and broker using a non-exclusive agreement can publicly market a property without submitting it to the MLS. The MLS’ Clear Cooperation Policy applies to listings under exclusive listing agreements, according to its website.
Rule 7.9 implements the National Association of Realtors’ Clear Cooperation Policy and requires brokers to submit certain residential listings to the MLS within one business day of marketing them to the public. Rule 7.9.1 lets a seller with an exclusive listing agreement keep a property out of the MLS with written instructions, as long as it is not publicly marketed. CRMLS calls these No Cooperation Listings.
In its complaint, CRMLS argued that a brokerage should not be able to market a property to buyers while keeping it from the cooperative whose listing data it uses.
“What the rules do not permit is having it both ways,” CRMLS attorneys wrote.
CRMLS CEO Art Carter made a similar case in a September op-ed, writing that CRMLS rules already give sellers options for marketing a property, including some circumstances in which it can be marketed without being submitted to the MLS, Inman reported on Sept. 30.
