Three separate federal lawsuits involving Compass and seven different MLSs are now making their way through the (often slow-moving) civil litigation process, marking a clear new level of conflict between incumbents defending long-running industry practices and deep-pocketed disruptors with new priorities.
The confrontation comes after more than a year of fast-escalating tensions, in which the mega-brokerage sought to pressure (or negotiate with) many MLSs privately, focused on rules that restrict its off-MLS marketing strategies.
While other brokerages and real estate conglomerates like Rocket and CoStar have sought in lesser ways to usurp the traditional structures of the industry, Compass has been the most ambitious as it builds exclusive inventory and seeks to undo rules that prevent it from leveraging and marketing those listings.
In the wake of all the new legal filings, Compass and other power players are maneuvering for a battle that is likely to play out beyond the courts and drag in more and more of an industry in evolution.
Compass asks to move CRMLS case, ‘not yet decided’ on more lawsuits
In a letter to Judge Mary Kay Vyskocil in the Southern District of New York, a lawyer representing Compass asked that a lawsuit CRMLS filed against the mega-brokerage be moved to the west coast, claiming that the dispute has “clear ties” to California rather than New York where Compass is headquartered.
The letter also casts doubt on whether the company will sue other MLSs that defied an ultimatum back in September, in which Compass all but promised it would file lawsuits against those that didn’t change or cease enforcing rules around off-MLS marketing—asking several MLSs to preserve communications “in light of imminent litigation.”
Anticipating that CRMLS will argue that moving the case would be inefficient based on these presumably forthcoming lawsuits against MLSs around the country, Compass’s lawyer wrote that “Compass has not decided whether to file any other cases.”
A Compass spokesperson said the company did not have any updates to share on its legal strategy or plans.
A lawsuit by six other MLSs against Compass was also filed in the same New York district, while Compass sued CRMLS in the Central District of California.
Compass’s attorney also requested a conference with Vyskocil and CRMLS ahead of a formal motion to throw the case out, arguing it is “an improper anticipatory declaratory judgment action.”
CMLS jumps into the fray with $1 million MLS legal defense fund
The Council of Multiple Listing Services (CMLS) got a new CEO in Jessie Edgerton, a lawyer by profession with many years in the industry. Her legal expertise appears likely to come in handy as CMLS members confront the Compass litigation threats, along with increased regulatory scrutiny and new AI-related challenges.
Edgerton told RISMedia shortly after taking the reins that she saw CMLS’s role in the battle over private listings as “providing grounds for robust discussion,” focused on consumers, as CMLS members continue to take very different approaches to the policies Compass has alleged are illegal.
Now, though, Edgerton appears ready to defend those MLSs who are facing lawsuits from Compass. In an announcement shared with members last week, CMLS said it “is taking a proactive step to support the MLS community by exploring the establishment of a Legal Action Fund.”
“The proposed fund will provide financial assistance for legal matters of significance to the broader MLS industry, extending beyond any single organization. The fund will operate under clear, written eligibility criteria, conflict-of-interest procedures, and independent antitrust review to guide funding decisions,” CMLS promised.
Edgerton also spoke out on social media in the wake of the Compass lawsuits, writing that “(e)very MLS deserves the freedom to decide for itself what MLS business model best serves its participants, their clients, the consumers who rely on its data.”
“Six more MLSs went to court to fight for that independence,” she said.
Compass has noted that many MLSs changed policies or enforcement to allow the kind of off-MLS marketing it has demanded for the rest of the industry, touting this as evidence that these rules are not as foundational as many have claimed.
The Real Deal first reported, and CMLS confirmed to RISMeda that the recently launched a legal defense fund is closing in on $1 million “in verbal and written commitments” ahead of formally accepting contributions, a CMLS spokesperson said, adding the organization “anticipate(s) beginning that process soon.”
CRMLS previously announced a similar “MLS Cooperation Legal Defense Fund,” and it wasn’t clear if the two funds had the same purpose or were working together in any way.
Editor’s note: this story was updated at 2:16 p.m. eastern time with additional information from CMLS.
