A federal antitrust lawsuit challenging the National Association of Realtors®’ (NAR) mandatory membership structure is heading to appeals court after a Michigan district court judge threw it out earlier this year.
Plaintiffs Douglas Hardy, Glenn Champion and Dylan Tent—Michigan-based brokers and agents—filed their opening brief June 19 with the U.S. Court of Appeals for the Sixth Circuit, asking the court to reverse a March 30 dismissal and send the case back for further proceedings.
U.S. District Judge Jonathan J.C. Grey of the Eastern District of Michigan dismissed the case without oral argument in March, finding the plaintiffs’ allegations that MLS data was uniquely unavailable elsewhere to be “misleading and contradicted by reality,” and concluding that allegations of forced, compulsory association membership were “insufficient to support a viable claim under (federal antitrust law).”
The lawsuit—a proposed class action filed in August 2024—challenges the practice of conditioning MLS access on mandatory membership in NAR, the Michigan Association of Realtors® and at least one local board, with fees assessed at each level. Plaintiffs allege brokers or agents who decline to join are effectively locked out of Michigan’s residential market.
NAR has strongly denied these accusations and defended the “pro-competitive” MLS marketplace, including the requirement that agents belong to every level of Realtor® association (the so-called “three-way agreement”).
“Plaintiffs are licensed real estate professionals whose entire commercial livelihoods depend on continuous, uninterrupted access to the MLS wholesale database,” the filing reads. “They are not private actors seeking casual marketing convenience; they are active market participants alleging that they are coerced…into purchasing unwanted services from a collection of horizontal and vertical entities.”
In a statement to RISMedia, an NAR spokesperson noted that they believe the Court’s decision to dismiss the case was correct and well-reasoned, reinforcing that NAR’s policies foster competition and are not discriminatory.
“Like other national membership organizations,” they continued, “NAR’s integrated structure is essential to the value we provide our members, and we remain committed to policies that promote competition, transparency, and value for brokers and consumers alike. We will continue to defend our position on appeal.”
The appeal
On appeal, plaintiffs argue the dismissal was procedurally improper, contending that Grey effectively held them to a higher standard than federal pleading rules require. Among other things, they point to the judge’s own acknowledgment in his order that the sufficiency of their market power allegations was “debatable”—a concession, they argue, that should have kept the case alive rather than served as grounds for dismissal.
On the central legal question, plaintiffs argue the district court compounded the error by reaching a definitive answer on an issue the Sixth Circuit has never decided, relying instead on out-of-circuit decisions that were reached after full evidentiary records were developed at a later point in those cases.
“An unsettled question of antitrust law is a compelling reason to permit fact discovery,” the brief argues, “not to close the courthouse doors.”
A landmark lawsuit in the early 1990s, Thompson v. Metropolitan Multi-List, created a split in precedent around MLS access, and spurred NAR to loosen its restrictions on membership requirements, leaving the decision to local MLSs and associations. It is currently illegal in four states (California, Alabama, Georgia and Florida) to require Realtor® membership to access the MLS.
The Hardy plaintiffs had cited the Thompson case, though Grey rejected the comparison, saying the underlying facts were not similar.
Plaintiffs noted that the district court itself acknowledged “the Sixth Circuit has not directly addressed” the central legal question in the case: whether conditioning MLS access on layered, mandatory association membership may constitute an unlawful restraint of trade under the Sherman Act.
Hardy, chairman of Signature Sotheby’s International Realty in Michigan, called the MLS an “essential marketplace tool” that remains improperly conditioned on association dues when plaintiffs filed their motion to appeal in April. “This ruling misses the practical reality facing brokers and agents across the industry,” he said at the time.
Hardy did not immediately respond to RISMedia’s request for comment.
