A federal judge in Madison, Wis., has dismissed a lawsuit brought by a real estate broker who claimed he was forced to buy memberships in the local real estate association as a condition of belonging to the multiple listing service and that the requirement was anti-competitive.
The suit was filed in December 2004 by Realtor Jay Reifert, who complained of a practice called “tying,” by which Wisconsin Realtor associations allegedly force real estate agents to purchase memberships in their trade associations in order to purchase access to MLS services.
Nearly all of the nation’s 800 multiple listing services are owned and operated by Realtor organizations. Membership in many MLSs is open only to members of the local Realtor organizations that own them.
District Court Judge John Shabaz in a court document wrote that there was “insufficient evidence” to find that a tie between the MLS and Realtor association membership has had an effect on interstate commerce in the Wisconsin case. “A tying arrangement is a violation of antitrust law only if a substantial volume of commerce is foreclosed by the tie,” Shabaz wrote.
Shabaz found that the plaintiff had failed to offer evidence that any organizations compete with the Wisconsin Realtor organizations and are damaged by the purported tie between participation in the MLS and being a Realtor.
The judge rejected the claim that the membership requirement is an illegal group boycott, noting that the plaintiff had not shown that he or any other real estate professional was denied access to the MLS.
Reifert on Monday said he is preparing to appeal Shabaz’s ruling.
The National Association of Realtors released a statement saying that the Wisconsin ruling “reaffirms the integrity of the nation’s Realtor-owned and operated multiple listing services.”
“Reasonable and fair membership requirements make it possible for all real estate licensees who subscribe to the strict Realtor Code of Ethics to become Realtors and participate in Realtor-owned and operated MLSs,” said NAR President Al Mansell of Salt Lake City.
The original complaint cites the 1991 Thompson federal appeals court decision, which held that a Realtor association that had monopoly power over its MLS could not force real estate agents to purchase memberships in the trade association as a condition of gaining access to the MLS.
But Judge Shabaz noted the stark difference in evidence presented in the cited Thompson case compared with Reifert’s.
The complaint also cited five other states where courts have declared it illegal to tie the sale of trade association services to the sale of the MLS.
A Wisconsin federal judge in April ruled that MLS directors could be held personally liable for damages over an antitrust lawsuit such as Reifert’s.
The MLS directors had filed a motion to dismiss the claims against them, asserting that they had merely “inherited” the tying requirement, had not initiated the tying requirement, and had taken no steps to further the tying requirement.
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