In recent years, the real estate industry has been rife with legal battles and policy changes. One key development is Top Agent Network (TAN)’s anti-trust lawsuit against the National Association of Realtors (NAR), challenging NAR’s policy aimed at curbing pocket listings. The U.S. Department of Justice (DOJ) has also taken interest in this case by filing an amicus brief with the U.S. Court of Appeals for the Ninth Circuit that seems to support TAN’s appeal of the lower court dismissal of TAN’s lawsuit. This blog will explore the details of the lawsuit, the implications of the DOJ’s involvement, and what it may mean for real estate agents.
Background of the Lawsuit
The core of this lawsuit lies in TAN’s contention that NAR’s policy, known as the “Clear Cooperation Policy,” is anti-competitive and a violation of federal antitrust laws. The Clear Cooperation Policy, implemented in May 2020, mandates that agents submit listings to the Multiple Listing Service (MLS) within one business day of publicly marketing a property. This policy was adopted to address concerns surrounding pocket listings or off-MLS listings—private sales that are not publicly advertised or listed in the MLS.
Lower Court Dismissal and TAN’s Appeal
Initially, TAN’s lawsuit against NAR was dismissed by a federal judge. According to the judge, TAN failed to show how it was directly harmed by the Clear Cooperation Policy and how the policy violated antitrust laws. However, TAN appealed the dismissal, arguing that the policy harmed its business and limited competition in the real estate industry. TAN believes that the policy unfairly favors NAR’s MLS system, at the expense of alternative systems like TAN’s.
The Involvement of the Department of Justice
The DOJ seems to be aligned with TAN’s goals in having the lawsuit reinstated by the Ninth Circuit. The DOJ argues, in an amicus brief filed Monday, that the district court was too quick in dismissing TAN’s lawsuit and that the Clear Cooperation Policy may indeed be harming competition in the real estate industry. This amicus brief by the DOJ holds significant weight, as it signals to the court that the DOJ, the country’s top law enforcement agency, shares TAN’s concerns about the anti-competitive nature of the policy.
Implications for Real Estate Agents
If TAN’s lawsuit is reinstated and succeeds, it could have significant ramifications for real estate agents. The Clear Cooperation Policy was established with the intention of promoting transparency and competition in the industry, but if determined to be anti-competitive, it could be dismantled or significantly modified. This could potentially resurrect pocket listings, which have been criticized for allowing agents to withhold listing information from the public and limit exposure to competitive market forces.
The Bigger Picture
This lawsuit is emblematic of the broader struggles occurring in the real estate industry, as traditional methods and organizations like NAR and MLS face challenges from innovative, technology-driven companies like TAN. The outcome of this lawsuit may signal a shift in the balance of power in the real estate market, potentially making way for new methods of property listing and sale that circumvent established industry practices.
The outcome of TAN’s antitrust lawsuit against NAR will have significant implications for both organizations, and may result in a ripple effect throughout the real estate industry. For real estate agents, staying informed about these developments will be crucial to navigating policy shifts and determining the best practices for listing and selling property. As the case continues to unfold in the Ninth Circuit, industry professionals and stakeholders will be watching closely to see what changes may be on the horizon for the real estate market.