A district court judge is allowing a lawsuit by a pocket listing company that was previously dismissed to go forward, after an appeals court in a separate case overturned the dismissal.
The case titled Top Agent Network v. National Association of REALTORS et al, which is focused on “clear cooperation,” was originally filed back in 2020. It was appealed to the Ninth Circuit, and then remanded after a closely related case involving another pocket listing service was also overturned.
In his order, Judge Vince Chhabria of the Northern District of California said that Top Agent Network (TAN) was possibly harmed by Clear Cooperation based on a different view of the relevant markets—looking at real estate services rather than the housing market in general.
“Top Agent Network has also adequately alleged antitrust injury,” Chhabria wrote. “Its asserted injury stems from (Clear Cooperation’s) allegedly anticompetitive effects on the market for real estate listing services: by forcing Top Agent Network and other listing services to compete with the MLSs for listings on unfavorable terms, (Clear Cooperation) prevents Top Agent Network from ‘gaining a foothold in the market and makes it virtually impossible for new competitors to enter, leaving agents with fewer choices, supra-competitive prices, and lower quality products.’”
Clear Cooperation was adopted by NAR in 2020, and requires MLS members to list properties on NAR-controlled MLSs within one day of marketing them publicly. TAN and at least one other listing-service startup subsequently sued NAR, big MLSs and local associations, claiming the policy was intended to suppress competition.
The case has implications beyond the ongoing commission lawsuits and settlements, as Clear Cooperation has not been a direct part of the litigation filed by recent homebuyers and sellers, who have largely focused on the “participation rule” requiring mandatory offers of compensation to buyer agents. It was, however, specifically targeted by the Department of Justice, which was recently allowed to restart its long-running, contested investigation into real estate policy.
NAR has argued that Clear Cooperation offers obvious pro-competitive benefits, and disputed that the policy could be characterized as a “group boycott”—though Chhabria disagreed.
“Because Top Agent Network has adequately alleged that (Clear Cooperation) is a group boycott in violation of the Sherman Act—and that it has been injured by that injury to competition—the motion for reconsideration is granted and Top Agent Network’s Sherman Act claim can proceed,” he wrote.
Chhabria scheduled a conference in the case for Aug. 30, with discovery allowed to “proceed immediately.”
This is a developing story. Stay tuned to RISMedia for updates.
