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DOJ will weigh in at appeals court during NAR pocket listing dispute

Publish Date: June 30, 2023

Written by Andrea V. Brambila

- Originally published at Inman News - Andrea V. Brambila

The antitrust enforcer will get 5 minutes at oral arguments in Top Agent Network’s appeal to overturn a lower court ruling tossing its case against NAR’s Clear Cooperation Policy.

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The U.S. Department of Justice will speak at oral arguments in an appeal filed by private listing service Top Agent Network in an antitrust lawsuit filed against the National Association of Realtors over a controversial policy aimed at curbing pocket listings.

On June 28, attorneys for the DOJ filed a motion to participate as amicus curiae (“friend of the court”) in support of neither party in oral arguments scheduled August 24 in the U.S. Court of Appeals for the Ninth Circuit.

In addition to the 15 minutes each that NAR and TAN will get to make their case, the DOJ asked for five minutes to speak, which the court granted. None of the parties opposed the motion.

“The United States believes that government participation at oral argument would be helpful to the Court,” attorneys for the DOJ wrote in the filing.

“The United States enforces the federal antitrust laws, both criminally and civilly, and has a significant interest and expertise in both the substantive and procedural aspects of those laws. This interest includes the application of the antitrust laws to the real-estate industry.”

The DOJ previously spoke at oral arguments in a similar case filed against NAR by ThePLS.com, also challenging the pocket listing policy. The PLS.com won that appeal and the case is now back to the lower district court and is ongoing.

Filed in May 2020, TAN’s suit alleges NAR and the San Francisco Association of Realtors violated a slew of antitrust and unfair competition laws for adopting the Clear Cooperation Policy, which requires listing brokers to submit a listing to their MLS within one business day of marketing a property to the public.

The rule is meant to effectively end the practice of publicizing listings for days or weeks without making them universally available to other agents. Some MLSs have instituted hefty fines to enforce the policy, including SFAR.

A U.S. district court in Northern California tossed TAN’s case against the Realtor associations in August 2021 and TAN subsequently appealed that decision. The company submitted its opening brief to the appeals court in January and the DOJ submitted an amicus brief in the case on March 13.

In its brief, the antitrust enforcer said it was not weighing in on the merits of TAN’s lawsuit, but rather to correct what the DOJ considered legal errors made by a federal district court in the case.

The federal agency argued that the lower court should have considered the pocket listing policy’s impact on the competition between listing services that agents and brokers pay for. Attorneys for the DOJ emphasized that the court should not automatically assume that any policy increasing visibility of properties to buyers is necessarily competitive because that would mean that no new service could challenge the dominance of MLSs who will inherently have more members — and therefore offer more visibility — than any service when it first launches.

David Faudman

“The DOJ’s amicus brief pointed to key errors in the District Court’s ruling, and we believe the Ninth Circuit will benefit from hearing the DOJ’s perspective on the ruling,” TAN CEO David Faudman told Inman in an emailed statement.

“We remain confident the Court will apply settled law and remand the matter back to the District Court just as it did in the PLS.com appeal and that the NAR’s unlawful and anti-competitive ‘Clear Cooperation Policy’ disaster will be terminated.”

Mantill Williams

In an emailed statement, NAR spokesperson Mantill Williams told Inman the CCP ensures agents and brokers serve consumers’ best interest and promote equal opportunity for all.

“We cannot speculate regarding DOJ’s actions, however, we believe that the district court properly dismissed this case back in August 2021,” Williams said.

“The CCP advances equal access and opportunity in housing by ensuring listings are widely available and accessible to all consumers and requires MLS participants to submit their listings within one business day of marketing the property to the public. Without the protections from the CCP, consumers would be disadvantaged because agents could refuse to give agents or customers access to those listings.”

NAR and the DOJ are currently locked in legal battle in a separate case, precisely because the DOJ wants to be able to investigate NAR’s Clear Cooperation Policy, as well as a separate rule regarding commissions. The DOJ has appealed a district court decision curtailing its probe to the U.S. Court of Appeals for the District of Columbia Circuit. The court has not yet issued a ruling.

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