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An antitrust lawsuit filed nearly four years ago against the National Association of Realtors over its pocket listing policy may be coming to a close — but only if the case settles.
On Friday, Jan. 26, attorneys for NAR and plaintiff ThePLS.com informed the U.S. District Court of the Central District of California’s Western Division that NAR was dismissed as a defendant in the case “without prejudice,” meaning that The PLS could decide to refile its claims against NAR later.
Two days before, The PLS and the other defendants in the case — California Regional MLS (CRMLS), Bright MLS and Midwest Real Estate Data (MRED) — told the court they had reached a settlement-in-principle of all claims between them, meaning they had agreed on key terms of a deal.
The case is currently in inactive status, and the parties have until Feb. 26 to either file a dismissal of the case or a motion to reopen the case if a settlement is not completed.
In a statement, The PLS co-founder Christopher Dyson told Inman that NAR’s loss at trial in a case known as Sitzer | Burnett, and an ever-rising pile of similar commission-related antitrust lawsuits, influenced The PLS’s decision to, at least temporarily, dismiss NAR from the case.
Christopher Dyson of The Agency. Credit: The Agency
“With the Burnett result, and similar cases hanging over the head of NAR, ThePLS.com thought it prudent to pause its action against NAR to give the parties an opportunity to discuss a resolution of the issues at the core of the PLS’s lawsuit,” Dyson said.
“However, if no resolution of the issues presented in the lawsuit can be achieved with NAR, ThePLS.com has the right to refile the case — as NAR has already stated.”
At the Sitzer | Burnett trial, a jury found that NAR and franchisors Anywhere, Keller Williams, RE/MAX, HomeServices of America and two of its subsidiaries, BHH Affiliates and HSF Affiliates, had conspired to inflate broker commission rates paid by homesellers. The jury awarded $1.78 billion in damages to a class of approximately 500,000 Missouri homeowners. If that jury award stands, it will be automatically trebled by law to more than $5.3 billion.
Mantill Williams
In a statement, NAR spokesperson Mantill Williams indicated that NAR’s dismissal from the pocket listing case was made without any money changing hands and without requiring any policy changes from the 1.5-million-member trade group.
“NAR is pleased that PLS decided to dismiss this long-pending litigation without NAR making any payment or rule change,” Williams said.
The PLS, which became The NLS in 2022, was founded by Mauricio Umansky, CEO and founder of luxury brokerage The Agency, along with Chris Dyson, James Harris and David Parnes, top-producing agents at The Agency. ThePLS.com has several owners: FASP Realty, Midnight Capital, Harris Family Trust, David Parnes Living Trust, Green Collective and Sidehill Ventures.
Mauricio Umansky at Inman Connect New York
At Inman Connect New York last week, Umansky officially announced the launch of a new NAR rival, the American Real Estate Association (AREA), which Umansky co-founded with Jason Haber, a New York-based Compass agent and founder of the NAR Accountability Project. The two founded AREA as a response to the scandals and legal trouble they say NAR has not properly handled.
It is unclear whether AREA’s status as a direct NAR rival will affect this antitrust litigation. Inman has reached out to The PLS for comment and will update this story if and when a response is provided.
In May 2020, The PLS, formerly a private listing network for real estate agents, filed a federal antitrust lawsuit against NAR and the MLSs over a policy designed to curb pocket listings.
The suit alleged the defendants had violated the federal Sherman Antitrust Act and California’s Cartwright Act for adopting the Clear Cooperation Policy, which requires listing brokers to submit a listing to their MLS within one business day of marketing a property to the public.
Office exclusives, or listings marketed entirely within a brokerage without submitting them to an MLS, are exempt from the policy. Some real estate brokers have threatened mutiny over the office exclusives exception to the Clear Cooperation Policy, which they argue benefits large, national brokerages at the expense of smaller, independent brokerages.
The controversial rule is meant to effectively end the growing practice of publicizing listings for days or weeks without making them universally available to other agents, in part to address fair housing concerns. The Clear Cooperation Policy went into effect on Jan. 1, 2020, and its implementation deadline was May 1, 2020. Some MLSs have instituted hefty fines to enforce it.
The PLS’s case was initially tossed in a lower court, but that decision was overruled on appeal and returned to the lower district court.
NAR is also fighting a similar pocket listing case brought by Top Agent Network, which is ongoing.
