Top Agent Network Amends Suit To Focus On NAR As “Real Wrongdoer”

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Opponents of the National Association of Realtors’ pocket listing rule are zeroing in on NAR.

On Tuesday, private listing service Top Agent Network (TAN) filed its fourth amended complaint challenging NAR’s Clear Cooperation Policy, which requires listing brokers to submit a listing to their multiple listing service within one business day of marketing a property to the public. After striking a deal with NAR, TAN named NAR as the sole defendant in the antitrust case and removed the San Francisco Association of Realtors as a defendant.

“NAR is the architect and promoter of the disastrous Clear Cooperation Policy and is the only party with the power to rescind it,” TAN CEO David Faudman told Inman in a statement.

“Removing SFAR — which TAN did in exchange for NAR’s agreement not to challenge jurisdiction in the Northern District of California — will allow us to focus on the real wrongdoer here, NAR, as the case proceeds through discovery and trial.”

In a Sept. 30 filing submitted jointly by TAN, NAR and SFAR, the parties told Judge Vince Chhabria of the U.S. District Court for the Northern District of California that they had agreed that SFAR would be dismissed from the case “with prejudice” (meaning, permanently) because NAR had agreed not to object to the court’s jurisdiction over the case.

“[T]he Parties have agreed that, for this matter only and in exchange for dismissing Defendant SFAR, Defendant NAR will not challenge this Court’s subject matter or personal jurisdiction over the Parties or this particular case, or to venue of this particular case in this Court (while NAR does not waive, and expressly reserves, the ability to challenge jurisdiction or venue in any other cases),” the filing reads.

On Oct. 1, Chhabria dismissed SFAR from the case, and TAN submitted its fourth amended complaint, which is nearly identical to the company’s third amended complaint, except that references to SFAR have been removed.

“This action seeks to stop the National Association of Realtors (‘NAR’) and its affiliates from conspiring to shut down competition, disrupt the relationship between real estate agents and their clients, and take away a family’s freedom to choose how to market their home for sale,” the complaint reads.

In an emailed statement, a NAR spokesperson told Inman, “We continue to believe that the District Court properly dismissed this case back in August 2021. We will continue to advance our positions in support of this outcome before the Court.”

According to NAR, the CCP is meant to effectively end the practice of publicizing listings for days or weeks without making them universally available to other agents. Backers of the policy argue that it supports fair housing, benefits sellers by giving them the most exposure to their listings, and ensures MLSs — and therefore the consumer websites MLSs feed to — have a comprehensive, accurate dataset.

TAN, however, alleges the rule is anticompetitive and violates state and federal antitrust laws, including the Sherman Antitrust Act.

“NAR’s Policy constitutes a Group Boycott by NAR’s associated members against TAN in the market for property listing services, and thus the NAR’s actions are a per se antitrust violation,” the complaint says.

“The MLS Clear Cooperation Policy constitutes a Group Boycott because it cuts off TAN’s access to the supply and customers in the relevant market needed to compete with NAR-affiliated MLSs — i.e., information regarding properties being marketed and/or sold off-MLS, and the agents paying membership dues for this information — by undermining the entire purpose for TAN’s services.”

“[T]he Policy constitutes a horizontal agreement among real estate agents not to compete against each other using off-MLS marketing, in order to suppress competition from more successful real estate agents for the benefit of NAR’s broader membership, which is unable to compete effectively against high performers,” the complaint adds.

TAN acknowledges that most homesellers prefer to market their homes through the MLS, but says that there will always be some sellers who prefer not to.

“Many consumers wish to preserve their privacy and do not want to host viewings or have their property widely available for viewing on a listing website,” the complaint says.

“Other consumers engage in limited off-MLS marketing to ‘test the waters’ to determine the appropriate price for their home listing on the local MLS — MLSs retain listing data and overpricing a home on the MLS and failing to achieve a quick sale can lead to a lasting drop in the property’s value.

“Sellers may also wish to avoid costs such as repairing and staging that are necessary to preserve the home’s sale value on the MLS. Others simply wish to avoid the hassle of the typical on-MLS sale.”

Separately, the U.S. Department of Justice’s Antitrust Division is investigating the CCP. The DOJ and NAR have been fighting over the probe in court and the fight may next be headed to the U.S. Supreme Court.

TAN’s fourth amended complaint comes after Chhabria in July granted TAN’s motion for reconsideration of the case’s dismissal. The U.S. Court of Appeals for the Ninth Circuit sent the case back to the lower court in August 2023, opining that TAN’s case was similar enough to the claims in another case brought against NAR by pocket listing service ThePLS.com to treat the claims the same way.

In January, ThePLS.com suit was paused for settlement talks, and in July, NAR was dismissed from the case without prejudice, meaning ThePLS.com could re-file its claims against NAR at a later date. Last month, ThePLS.com co-founder Mauricio Umansky threatened to re-file the lawsuit against NAR as part of an intensifying pressure campaign to get NAR to either repeal or change the CCP.

NAR is evaluating the Clear Cooperation Policy.