Appeals court upholds dismissal of NAR mandatory membership suit 

The National Association of Realtors has scored a victory in a mandatory membership case filed nearly two years ago by a real estate broker in Texas.

Today, a three-judge panel with the Fifth Circuit Court of Appeals affirmed the lower court's previous dismissal, likely ending litigation in the case.   

What this case was about: Lou Eytalis, a broker in Wichita Falls, Texas, filed a complaint in November 2024 alleging that NAR, the Texas Association of Realtors, Wichita Falls Association of Realtors and Paragon MLS Connect violated federal civil and antitrust laws. Specifically, Eytalis accused the organizations of unlawfully restricting competition in the real estate market by requiring brokers to join multiple associations — per NAR's "three-way agreement" rule — as a precondition for MLS access.

Eytalis was motivated to file the suit following a dispute with NAR over non-renewal penalties that the association levied against some of her firm's agents. She first took the organization to small claims court, ultimately deciding to file an antitrust lawsuit in federal court.

"They had no business telling me how to run my business," Eytalis told Real Estate News in a 2025 interview. "It was an overreach of their power."

Dismissed by the district court: In July 2025, a district court judge dismissed Eytalis' federal antitrust claims as well as the state claims made against the Texas associations. The ruling referenced a magistrate judge's conclusion that Eytalis could not make a claim under the Clayton antitrust law because it does not apply to services, and the complaint did not include sufficient evidence of an antitrust injury or conspiracy among the defendants.

Less than a month later, Eytalis filed an appeal with the Fifth Circuit.  

NAR leverages dismissal of related case: A similar mandatory membership lawsuit, known as Hardy, was filed in 2024 by agents in Michigan and dismissed on March 30, 2026. The judge in that case ruled that the plaintiffs had not demonstrated that NAR and the other defendants — state and local Realtor associations and a Michigan MLS — had conducted business in an anti-competitive manner.

Days later, NAR filed a supplemental brief with the Fifth Circuit informing the judges of the Michigan ruling, stating: "Defendants-Appellees believe the thorough Sherman Act analysis and historical discussion in the Hardy Decision may assist this Court in deciding the appeal pending in this case, in particular questions regarding Plaintiff-Appellee's Sherman Act claims."

The three-judge panel appeared to agree, upholding the district court's 2025 dismissal and further ordering Eytalis "pay to appellees the costs on appeal to be taxed by the Clerk of this Court."

What NAR had to say: In response to the Sept. 9 appeals court ruling, NAR issued a statement saying it was "pleased that the Court dismissed the appeal in the Eytalis case, leaving in place the district court's dismissal of the federal antitrust claims with prejudice and rejection of the allegation that NAR's three-way agreement violates antitrust law."

"NAR membership is voluntary, and the integrated structure connecting local, state, and national associations remains lawful and essential to the value we provide our members," the statement concluded.