Judge reopens pocket listings case against NAR
Following a review, Top Agent Network's lawsuit challenging NAR's Clear Cooperation policy — which had been dismissed in 2021 — will be able to proceed.
California District Judge Vince Chhabria agreed to reopen a lawsuit against the National Association of Realtors that seeks to prohibit agents from selling so-called "pocket listings," or properties that are not listed for sale on the MLS.
Background: Private listing service Top Agent Network sued NAR in May 2020, challenging the organization's Clear Cooperation policy, which states that an agent or broker must submit their listing to the MLS within one day of marketing the property to the public. The lawsuit alleges that NAR conspired with the San Francisco Association of Realtors to force agents to list their properties on the MLS, thereby increasing the dues and membership fees that NAR collects. It was filed in the Northern District of California.
The suit was initially dismissed in 2021, but the case was sent to a lower court for review in August 2023 after TAN's lawyers argued that the plaintiff's claims were strikingly similar to those in a case filed by another private listing company, ThePLS.com.
New developments: The lower court review has now concluded. On Dec. 18, the district judge filed an order to reopen the case, vacating the previous order granting a motion to dismiss.
What's at stake: TAN CEO David Faudman has previously argued that NAR's Clear Cooperation policy effectively prevents private listing services like his from gaining a foothold in local markets. In August 2021, he described the policy to Reuters as "just another anticompetitive attempt by the NAR to use its monopoly power to crush market alternatives."
A spokesperson for NAR told Real Estate News in September that the Clear Cooperation policy "ensures brokers and agents serve the best interest of their consumers and promote equal opportunity for all."
Some MLSs, including REcolorado, have also defended NAR's Clear Cooperation policy. REColorado described it on their website as "pro-competitive" and "pro-consumer."
The reopened lawsuit is the latest legal arrow aimed at one of NAR's policies. NAR is also fighting multiple lawsuits over commission practices and policies.
Real Estate News has reached out to NAR for comment about the lawsuit being reopened but did not immediately receive a reply.