The National Association of Realtors logo against a background of a courthouse.
Illustration by Lanette Behiry/Real Estate News; Shutterstock

NAR pocket listing case goes back to the courts on appeal 

A case filed by the Top Agent Network targeting NAR's Clear Cooperation policy was reinstated after previously being dismissed in 2021.

September 1, 2023
3 minutes

Key points:

  • TAN, which describes itself as a private listing company, originally sued NAR and two California MLSs in 2020.
  • The case was dismissed in 2021, but remanded upon appeal this week due to its similarity to a case filed by that was allowed to move forward.
  • TAN alleges that NAR's Clear Cooperation policy barring pocket listings violates antitrust laws by stifling competition.

The National Association of Realtors may once again have to defend its Clear Cooperation policy barring listings marketed outside the MLS after the 9th Circuit Court of Appeals asked a lower court on August 28 to rehear a challenge to the policy.

A lawsuit against NAR was originally filed in May 2020 by Top Agent Network, a private listing service company based in San Francisco. It alleged NAR's pocket listing policy effectively forced members to boycott non-MLS services, which would violate antitrust laws under the federal Sherman Act. The San Francisco Association of Realtors and California Regional MLS are also implicated in the suit.

The Department of Justice filed an amicus brief in the case this past spring "to address legal errors in the District Court's antitrust-injury analysis." In the brief, the DOJ said it had a "significant interest in preventing anticompetitive conduct in the real estate industry" and noted that it had "investigated and challenged various rules and practices" of NAR and regional MLSs over the past two decades.

The District Court for Northern California initially dismissed TAN's claims in August 2021, which NAR applauded. TAN then appealed, and the court remanded the case this week, noting that a case with similar claims filed by — which had also been dismissed — was remanded back to the lower court in January.

"Because the facts of are sufficiently analogous to the facts as alleged [by TAN], we vacate the district court's order and remand Top Agent's claims for reconsideration under," the court wrote in the order.

A spokesperson for NAR told Real Estate News in an emailed statement that the organization is "disappointed" in the 9th Circuit's ruling because the policy "ensures brokers and agents serve the best interest of their consumers and promote equal opportunity for all."

"Without the protections from the Clear Cooperation Policy, consumers would be disadvantaged because agents could refuse to give agents or customers access to those listings," the spokesperson said. "We will continue to vigorously defend the CCP and remain confident we will ultimately prevail."

The TAN and lawsuits both allege that NAR's Clear Cooperation Policy, which was established in 2020, effectively prevents them from gaining a foothold outside the NAR-affiliated MLS market. The rule also essentially forces seller's agents to market their properties on MLS websites, which require agents to split their commission.

MLSs are responsible for ensuring compliance with the policy, and some have instituted fines for not following the rule. For example, MLSOK fines its members up to $500 for a violation while the Long Island Association of Realtors says it charges members $100 per day if a publicly marketed listing is not on an MLS.

Other listing services like REcolorado have defended the rule by saying it protects brokers, agents, appraisers and consumers alike. "It reinforces the consumer benefit of cooperation and ensures MLSs are an efficient and transparent marketplace that is pro-competitive and pro-consumer," the listing service's website says.

When the TAN case was dismissed in 2021, Top Agent Network chief executive David Faudman countered that NAR's policy "is bad for agents and bad for consumers and is just another anticompetitive attempt by the NAR to use its monopoly power to crush market alternatives."

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