OneKey joins CRMLS as plaintiff in lawsuit against Compass
The New York-based MLS is the eighth to ask the court to protect it from the brokerage giant’s litigation threats, which it says date back to March.
After publicly rejecting Compass' demand to change its listing policies, New York's largest multiple listing service is the latest to sue the brokerage giant and seek a declaration that its listing rules don't violate antitrust laws.
In an amended complaint filed Oct. 27, OneKey MLS, which has about 40,200 subscribers, joined the lawsuit California Regional MLS filed against Compass in the U.S. District Court for the Southern District of New York earlier this month. Six other MLSs filed a similar suit against Compass on Oct. 21.
The CRMLS and OneKey suit now asks the court to declare not only that the MLSs' "substantively similar" cooperation rules are lawful under the federal Sherman Act and the California Cartwright Act, but also under New York's primary antitrust law, the Donnelly Act.
"Compass is a OneKey participant, and its affiliated agents are OneKey subscribers," the amended complaint states.
"OneKey therefore faces the same choice that CRMLS faces: continue to enforce rules its participants adopted and abide by, and face the litigation Compass has expressly threatened, or abandon those rules and expose itself to potential claims from buyers, buyer agents, and the many participating brokerages that contribute their listings to the cooperative."
Amended complaint says CCP was adopted due to agents 'hiding listings': Compass objects to both MLSs implementing NAR's controversial Clear Cooperation Policy, which requires a listing broker to submit a property to the MLS within one business day of any public marketing, if the property is under an exclusive listing agreement. The amended complaint adds that the policy was adopted "[i]n response to, among other things, a significant rise in uncooperative seller agents hiding listings from the MLS cooperative."
The suit also calls for an injunction permanently barring Compass from suing both MLSs alleging that the rules violate federal or state antitrust laws.
Compass responds: In an emailed statement, a Compass International Holdings spokesperson told Real Estate News, "It's almost as if CRMLS and OneMLS [sic] are asking people to ignore the evidence that proves their claims aren't true. For years, seven of the top 25 MLSs, covering 340,000 agents across 12 states, have allowed agents to publicly market 'office exclusives' without fines, and none of the problems they warn about have happened. If what we are asking for is so bad, why has it worked for years in nearly 30% of the country?"
When asked whether the addition of New York-based OneKey MLS will hamper the brokerage's efforts to move the case to the Central District of California, Compass did not respond.
Threats 'not hollow': According to the amended complaint, OneKey MLS received a demand letter from Compass on Sept. 8 that was "nearly identical" to the letter Compass sent CRMLS, threatening an antitrust suit if OneKey MLS did not confirm it would not fine or punish a subscriber for publicly marketing office exclusives by Oct. 6. After receiving an extension on that deadline to Oct. 20, OneKey MLS refused Compass' demand.
"OneKey explained that its rules preserve seller choice while preventing free-riding and protecting interbroker competition, transparency, and consumer access," the amended complaint says.
"Compass's recent public statements, as well as other lawsuits Compass has filed, demonstrate the threats against both CRMLS and OneKey are not hollow, and the dispute between the parties is ripe for judicial determination."
According to the filing, OneKey MLS has issued five fines to Compass agents for violating its cooperation rule. Of those fines, a single fine of $1,500 has been paid, one fine remains unpaid, and the rest have been waived.
A series of threats: Compass made good on its litigation warning to CRMLS by filing its own suit on Oct. 16 in the U.S. District Court for the Central District of California. This week, CRMLS published an open letter countering several claims and purported facts laid out in Compass' suit, and suggested that Compass and its agents may be violating the NAR Code of Ethics and California state law.
According to the amended complaint, Compass' legal threats against OneKey MLS actually predate the demand letter. The MLS alleges that Compass CEO Robert Reffkin sent the MLS's CEO a letter on March 21 asserting that OneKey's rules are "an illegal restraint of trade," demanding the MLS "just stop fining agents for publicly marketing-off MLS" and warning that "litigation is likely to start next month."
More 'free-riding'?: The amended filing also pointed to another instance of alleged "free-riding" by Compass. On Sept. 23, real estate consultant Victor Lund, "writing from a Compass email address on behalf of Compass International Holdings and its affiliated brands, demanded that OneKey exclude those brands' listing and agent data from feeds supplied by OneKey to third-party technology vendors whose products help brokerages identify and recruit agents." Compass made this request despite the fact that Compass itself receives a OneKey data feed for its own back-office operations.
"Compass thus seeks to use competitors' contributed data to support its business while restricting competing brokerages' use of Compass-contributed data to support theirs," the complaint says.
"Like its demand to publicly market listings while withholding them from the MLS, this request seeks the benefits of the cooperative without reciprocal sharing — another attempt to free-ride on the cooperative."