Key Details:
- Los Angeles broker John Diaz has filed an antitrust lawsuit against NAR, CAR, and MetroList, challenging the three-way agreement that mandates costly association memberships for MLS access.
- Meanwhile, last week at NAR NXT, CEO Nykia Wright defended the policy, calling out the “rumblings” about the cost versus value of association dues.
Just last week, Nykia Wright, CEO of the National Association of Realtors®, declared her support for the trade group’s three-way agreement.
It’s fair to say not all Realtors are on board with this, especially since John Diaz—a Los Angeles broker with UHOO Real Estate Services—filed an antitrust lawsuit against NAR on November 1st. Diaz filed the suit with the U.S. District Court in Los Angeles.
Here’s what we know so far.
Details on the John Diaz antitrust lawsuit
The complaint asks for damages, injunctive relief, and a jury trial. At this point, It’s too soon to say whether this—possibly in combination with other existing lawsuits against NAR—could be a Sitzer/Burnett 2.0 in terms of its potential to change the industry.
Defendants for the lawsuit include:
- The National Association of Realtors® (NAR)
- The California Association of Realtors (CAR)
- The Lodi Association of Realtors (LAR)
- MetroList MLS
The plaintiff claims the above “have established an exclusionary practice, requiring brokers to join multiple associations (NAR, CAR, and LAR) to gain access to MLS services provided by MetroList, which are essential for conducting real estate transactions.”
Diaz goes on to say the membership requirement “constitutes an unlawful tying arrangement,” compelling brokers and agents to purchase association memberships they may not even need or want to gain access to the MLS.
As Diaz argues, the three-way agreement has “created an anti-competitive monopoly over MLS services, limiting the market’s ability to support alternative trade organizations—thereby stifling competition in violation of the Sherman Act.”
Diaz also claims he has “experienced a significant financial burden” due to the required membership dues and MLS fees, which, as he says, have “diminished his revenue and impeded his business.”
What his argument ultimately comes down to is the defendants named in the suit have failed to “provide equitable value and service proportional to the fees paid by the plaintiff” and by agents and brokers throughout the U.S., thereby breaching their contractual obligations.
In other words, the cost imposed on Realtors by the three-way agreement exceeds the perceived value of the required memberships.
From the filing:
“Defendants have violated the implied covenant of good faith and fair dealing by imposing excessive fees and forced memberships that serve no legitimate business purpose for Plaintiff.”
As of yet, none of the defendants have responded to HousingWire’s requests for comment. It’s possible Nykia Wright’s statements at NAR NXT were intended as an indirect response.
It could also refer to the two other antitrust lawsuits NAR is currently facing—Hardy and Muhammad—that make similar allegations. The Alabama Association of Realtors also sent a letter to NAR asking it to terminate the three-way agreement.
In her statement earlier this week, Wright broadly addressed the discontent over the policy, acknowledging the “rumblings” and reasserting NAR’s support for the three-way agreement:
We are here to make sure that those rumblings subside because it is our duty to make sure that people understand what happens at the local level, the state level, the national level, and really make sure that people understand that there is no cannibalization of services, but it’s really working together to make things work.
Read the complete antitrust filing below. And stay tuned as we learn more.
