Industry members argue in the new lawsuit that NAR and other defendants have engaged in anticompetitive practices. They want restitution — and an end to rules they don’t support.
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A group of real estate professionals in Louisiana this week became the latest to go to battle with the National Association of Realtors, arguing in a new lawsuit that the organization’s so-called three-way agreement is anticompetitive.
Brokers Carla DeYoung and Carlos Alvarez, along with agents Tammy Jo Williams and Darlene Currie, filed their suit Thursday in the United States District Court for the Middle District of Louisiana. Defendants include NAR, the Greater Baton Rouge Association of Realtors, New Orleans Metropolitan Association of Realtors, ROAM MLS and others.
The lawsuit accuses the various defendants of imposing restrictions on data usage, which in turn hurts agents’ ability to do market analysis. And it takes issue with the requirement that agents become members of “three Realtor associations as a condition for accessing the MLS,” according to the complaint in the case.
“These associations impose rules that the plaintiffs do not support, which constitute restraints of trade and violate the plaintiffs’ First Amendment right to freedom of association under the United States Constitution,” the complaint continues.
News of the Louisiana lawsuit was first reported by Real Estate News.
The complaint goes on to say that the plaintiffs “strongly oppose” mandatory membership in NAR due to a variety of factors including “the 2020 DOJ settlement, the current investigation into the Clear Cooperation Policy, and numerous pending lawsuits.” NAR is also accused of having a “record of anticompetitive behavior.”
The plaintiffs ultimately claim the defendants broke the Fair Housing Act, the of Federal Trade Commission Act, the Sherman Antitrust Act, and other laws.
In a statement to Inman Friday, NAR said “we will respond to the plaintiff’s specific claims in court.”
“NAR does not require that MLS access be limited to NAR members,” the statement added. “MLSs are operated at the local level and each MLS determines individual participation requirements.”
The lawsuit is just the latest in a growing number of legal cases taking aim at rules requiring agents to join NAR as well as local and state-level Realtor associations. Previous suits were filed in California, Michigan and Pennsylvania, among other places.
At the same time, the Alabama Association of Realtors has also challenged the rule in response to its members’ concerns, and urged NAR in September to make memberships optional. And immediately before Christmas, NAR and Phoenix Realtors engaged in a legal tug of war over MLS Choice, a subscription offering that gives agents access to some MLS features without requiring them to be NAR members.
The growing pushback to the three-way agreement comes after a tumultuous year for NAR during which it settled major commission lawsuits, faced criticism from members, and contended with scrutiny over governance and spending practices. The growing number of lawsuits over the three-way agreement suggests that despite commission settlements, the organization’s days in the courtroom are far from over.
However, NAR CEO Nykia Wright has expressed support for the three-way agreement.
In the case of the new lawsuit, the plaintiffs want the court to prevent the defendants from enforcing mandatory membership rules, and to “cease leveraging control over MLS data to enforce anticompetitive tying arrangements,” among other things. They also ask for restitution and to be rewarded for various financial damages.
Read the Louisiana complaint here (if the document doesn’t load, refresh the page):
Update: This story was updated after publication with a statement NAR provided to Inman.