Judge Allows Pocket Listing Lawsuit Against NAR to Move Forward

An antitrust lawsuit by Top Agent Network (TAN) against the National Association of Realtors (NAR) and the San Francisco Association of Realtors (SFAR) is moving forward. 

On Monday, June 22, 2024, Judge Vince Chhabria of the U.S. District Court for the Northern District of Columbia granted TAN’s motion for reconsideration of its case. The case was previously dismissed and later sent back to the lower court by the U.S. Court of Appeals. 

The appellate court found the TAN case similar enough to the claims made against NAR by ThePLS.com in another case. 

Both lawsuits challenge NAR’s Clear Cooperation Policy, which requires agents to submit a listing to their MLS within one business day of marketing that listing to the public. 

From Judge Chhabria’s July 22nd order: 

“Top Agent Network has adequately alleged that the Policy constitutes a per se group boycott in violation of the Sherman Act. 

“In considering whether the plaintiff in PLS.com had done so, the Ninth Circuit noted that ‘PLS’s competitors coerced its suppliers (sellers’ agents) not to supply PLS with listings (or to do so only on highly unfavorable terms), and they did so for the express purpose of preventing PLS, a new entrant to the market after decades of little to no competition, from competing with the MLSs. . . . PLS also alleges that the effort succeeded.’

“Substituting ‘Top Agent Network’ for ‘PLS,’ the same is true here.”

NAR’s Clear Cooperation Policy

As mentioned above, NAR’s Clear Cooperation Policy requires listing brokers to submit a property listing to their MLS within one business day of marketing that property to the public. 

NAR has argued in defense of this policy, saying it’s intended to end pocket listings by making all listings universally available to other agents. 

But both TAN and ThePLS.com claim the CCP is anticompetitive and violates— 

• The Sherman Antitrust Act
• California’s Cartwright Act
• Unfair Competition Law

In his ruling, Judge Chhabria found that TAN has adequately shown the CCP constitutes a per se group boycott in violation of the Sherman Act. 

In the judge’s words— 

“Looking to that upstream [real estate listing services] market, the complaint adequately alleges that Top Agent Network’s injury flows from the Policy’s anticompetitive effects: The Policy harms competition by impeding agents’ ability to choose to post listings to Top Agent Network’s listing service, and this in turn harms Top Agent Network by restricting its supply of listings.

“And the Policy does not have countervailing procompetitive effects on this market: while many—indeed most—agents cannot join Top Agent Network, the Policy does not increase those agents’ choice of listing services.” 

So, while TAN’s claim against NAR and SFAR for intentional interference with contractual relations remains dismissed, its antitrust claims under the Sherman Act and California laws are allowed to proceed—with the discovery phase to begin effective immediately. 

As for upcoming court dates: 

• The case management conference is scheduled for Aug. 30, 2024.
• The joint case management statement is due by Aug. 23, 2024.

Read the judge’s full order for more details.  And stay tuned for more developments.