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The National Association of Realtors and state and local Realtors associations are asking a federal court to toss an antitrust lawsuit against them filed by two Michigan real estate brokers over the requirement that they belong to the trade groups in order to access the local multiple listing service.
The suit, filed in the U.S. District Court for the Eastern District of Michigan, names NAR, the Michigan Association of Realtors, the Grosse Pointe Board of Realtors, the Greater Metropolitan Association of Realtors, the North Oakland County Board of Realtors, and Michigan’s largest MLS, Realcomp II, as defendants.
According to a disclosure statement, Realcomp II is owned by the Detroit Area Board of Realtors, Eastern Thumb Association of Realtors, Lapeer and Upper Thumb Association of Realtors, Detroit Association of Realtors, and the Livingston County Association of Realtors, but those trade groups are not named as defendants.
In a motion to dismiss filed Fri. Nov. 1, the defendants told the court that requiring membership in a Realtor association to use Realcomp’s services is not an antitrust violation.
“[T]he Complaint does not allege that Plaintiffs are forced to do anything, but merely alleges that they cannot access the benefits they want (presumably, listing on the MLS) without paying for one of the requirements of such a benefit (association membership),” the filing said.
“Here, Plaintiffs have alleged nothing more than a desire to have membership benefits without membership.”
Further, the defendants attacked the quality of the complaint, alleging it “contains only nine paragraphs of barebones factual allegations” and is “so vague” that the defendants are not being given fair notice as to what claims are being asserted against them.
“What Plaintiffs are actually alleging Defendants (or some combination of them) did to restrain trade is not apparent from the allegations in the Complaint,” the filing said.
“The nine paragraphs of factual allegations do not set forth coherent legal theories, let alone the required factual particularity needed to meet the pleading standard for an antitrust complaint.”
“Plaintiffs do not even identify a relevant market, let alone any competitors in that market,” the filing added. “This Court cannot reasonably draw inferences about harm to competition across a market that has not even been identified.”
Douglas Hardy, M.D., the broker-owner of Signature Sotheby’s International Realty in Southeastern Michigan, which has about 100 agents and brokers; Glenn Champion, Esq., a primary broker for the same brokerage; and Dylan Tent, an agent with the same brokerage, filed the complaint on Aug. 12. The complaint seeks to represent a class made up of all Michigan agents and brokers who are required to be members of NAR, MAR, the local Realtor associations, and/or who must use Realcomp II in order to access the MLS.
The real estate professionals decided to file the suit after the National Association of Realtors came to a proposed settlement of multiple antitrust lawsuits, whose rule changes the pros say will harm agents, brokers and consumers.
Specifically, the plaintiffs allege that the unilateral decision to do away with “the guaranteed broker commission” as part of the settlement “greatly diminished any value created by the compulsory membership requirement” promulgated by the defendants.
But the motion to dismiss from NAR and the other defendants stressed that it is “unclear” how this allegation is related to the plaintiffs’ claims or alleged damages and that the case should still be rejected because it’s not the proper way to object to the deal.
“Even if these allegations did somehow form the basis of an antitrust claim, which is not apparent from the face of the Complaint, the claim should be dismissed because it is an inappropriate collateral attack on the pending Settlement,” the motion said.
“The Settlement — which was reached post-jury verdict and would resolve substantial class action litigation against NAR — received preliminary approval by the Western District of Missouri on April 22, 2024.
“The final approval hearing is on November 26, 2024. As part of the approval process, the Court approved the objection and opt-out period that was open until October 28, 2024. If Plaintiffs had a concern with the Settlement, they should have brought that concern to the Western District of Missouri, which retained exclusive jurisdiction over the Settlement.”
In an emailed statement, an NAR spokesperson told Inman, “NAR and the other Defendants in the Hardy action filed a motion to dismiss because Plaintiffs have failed to sufficiently plead any legal claim.”
Asked for comment on the motion to dismiss, plaintiffs’ attorney, Michael S. Clawson, told Inman via email: “I will be filing a response in accordance with the court rules.” The deadline to file a response is “[t]ypically 21 days,” Clawson added.
The Michigan agent and brokers are not the only ones to object to the requirement many MLSs have that they join NAR in order to access the MLS. Last month, Pennsylvania real estate broker Maurice Muhammad sued NAR, the state Realtor association and his local MLS for $5.6 million over the requirement.
Read the motion to dismiss (re-load page if document is not visible):
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