The U.S. Supreme Court has denied the National Association of REALTORS®’s (NAR) petition in the pocket listing case which means the anti-trust case can now move toward trial in the lower court. NAR had petitioned the Court for a “writ of certiorari” asking the court to review a ruling by the Ninth US Circuit Court of Appeals made in April of 2022. The suit alleges that NAR and three of the largest multiple listing services in the US (California Regional MLS, Bright MLS and Midwest Real Estate Data violated the federal Sherman Antitrust Act by adopting the Clear Cooperation Policy (CCP), which requires listing brokers to submit a listing within one business day of marketing a property to the public.
Here is a brief history of the case: in 2019 NAR passed the Clear Cooperation Policy which went into effect in 2020. In May 2020, PLS brought the suit, and NAR and its fellow defendants filed a motion to dismiss. In February of 2021, the District Court dismissed the complaint with prejudice, which means the petitioner could not refile. PLS appealed the dismissal to the 9th Circuit of Appeals in January of 2022. In April of 2022, the Ninth Circuit Court of Appeals overturned the District Court and reinstated the lawsuit. The 9th Circuit’s ruling was supported by an amicus brief filed by the United States Department of Justice (DOJ) and the Court was urged by others including the influential American Antitrust Institute to reverse the dismissal. To read the 9th Circuit’s decision click here: The PLS.Com, LLC v NAR No. 21-55164 D.C. No 2:20-cv-04790-JWH-RAO (Adobe Document Cloud) the decision does not appear to bode well for the defendants, but who knows.
Why it Matters
What happens if CCP disappears? In a low inventory market (inventory is down 21% YOY) how quickly will large companies or large teams enter their listings into the MLS? Without CCP pocket listings could become more prevalent. How high is the probability that CCP will go away? Read the 9th Circuits Decision and it will become clear that the court is not a fan of CCP now that the 9th Circuit over-ruled the lower court do we think the lower court will ignore the decision. Next factor in the DOJ filed an amicus brief which seems to agree with the 9th Circuit. Finally, there is the Presidential Execute Order to do something about regulating residential real estate. If the Federal Trade Commission agrees with the 9th Circuit and DOJ it is very easy for them to pass regulations banning something like Clear Cooperation Policy. Maybe now would be a good time to hope for the best but plan for the worst. Remember, hope is not a strategy.