The National Association of REALTORS® (NAR) and several Michigan real estate associations asked a federal court Wednesday to dismiss a proposed class-action lawsuit that challenges traditional MLS and REALTOR® membership requirements.
NAR, the Michigan Association of REALTORS® and several local REALTOR® associations argue that the plaintiffs failed to make valid antitrust claims in their lawsuit, according to a motion filed in the U.S. District Court for the Eastern District of Michigan.
The lawsuit, originally brought in August 2024, takes issue with the local MLS’s (named Realcomp II) requirement that real estate professionals must be NAR members to access the MLS.
“The necessary elements of their antitrust claims are either absent or plead in only a conclusory manner,” the defendants’ motion reads.
Additionally, NAR and the defendants argue that the plaintiffs failed to “plausibly allege” that the REALTOR® membership requirement harmed them or suppressed competition, calling the assertion that the MLS is the only available source of certain information “implausible on the face.”
The plaintiffs in the lawsuit—Douglas Hardy, Glenn Champion and Dylan Tent—are affiliated with Signature Sotheby’s, which has three offices and more than 130 agents across Southeastern Michigan. Hardy owns Signature Sotheby’s. Champion serves as president and managing broker, and Tent is an agent.
The plaintiffs claim that Realcomp II’s membership requirement amounts to illegal tying, where the purchase of one product is conditioned on buying another. The plaintiffs argue they should be able to access the MLS without joining NAR and its state and local associations.
However, NAR and other real estate associations assert that the plaintiffs failed to properly define “relevant” markets or demonstrate harm to competitors in their first amended complaint (FAC). These are key grounds for antitrust cases to move forward, according to the motion.
The motion also characterizes the lawsuit as an “improper and untimely” attack on NAR’s recent settlement of the Burnett commission lawsuit in Missouri. That landmark settlement, approved in November with NAR paying $418 million, requires the removal of offers of agent compensation from MLS listings.
The plaintiffs argue this notable rule change “eliminated the sole purpose” of NAR-affiliated MLS systems by removing commission guarantees between brokers. However, NAR and other defendants say this position is problematic because it advocates for practices a jury found anticompetitive in the Sitzer/Burnett case.
Lawyers for NAR and the other defendants outlined what they view as several legal holes in the plaintiffs’ amended complaint. These include failing to properly define relevant products or geographic markets, providing no evidence of harm to competitors, insufficient proof of a conspiracy between the defendants and failure to demonstrate that the defendants hold monopoly power.
“Plaintiffs have now made explicit that they intend to bring a tying claim, but the FAC does no more to make out such a claim than did the original complaint. Tellingly, the FAC still does not allege that Defendants’ conduct has harmed competition,” the motion argued.
At press time, the judge had not ruled on the defendants’ motion.
This and other recent cases highlight ongoing tensions within the real estate industry as traditional MLS and commission practices face increased public scrutiny. It also shows how the Burnett settlement is still sending shockwaves through the real estate community as additional lawsuits pile up even after NAR amended its practices.
