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REUTERS/Jonathan Ernst (UNITED STATES - Tags: BUSINESS)

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  • Exclusive-listing service challenges Nat'l Association of Realtors’ demand that agents also list on MLS
  • Complaint laid out ‘all the hallmarks of a group boycott,’ 9th Circuit says

(Reuters) - A private real estate listing service can sue the National Association of Realtors over a policy it allegedly adopted to protect its member-operated Multiple Listing Services against competition from “off-MLS” databases, a federal appeals court held Tuesday.

The 9th U.S. Court of Appeals revived the antitrust claims of The PLS.com, which a federal judge in Los Angeles dismissed last year.

PLS had pioneered a lower-cost, agent-only website for “pocket” or exclusive listings that the sellers did not want widely publicized. Its two-year-old business was thwarted in 2019, when NAR adopted the “Clear Cooperation Policy.”

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The policy required Realtors to add all of their off-MLS listings to the regional MLS within one business day, or face heavy fines and possible termination of their access to the MLS.

“The Clear Cooperation Policy, as PLS characterizes it, shares all the hallmarks of a group boycott,” which was sufficient to survive NAR’s motion to dismiss, Circuit Judge Milan Smith Jr wrote for the 9th Circuit. He was joined by Circuit Judge John Owens and U.S. District Judge Stephen Murphy III of Detroit, sitting by designation.

Mantill Williams, NAR’s vice president of communications, expressed disappointment with the decision on Tuesday.

“The Clear Cooperation Policy advances equal opportunity in housing by ensuring listings are widely available and accessible to all,” Williams wrote in an email. “We look forward to the next stage of this case, in which we will show the (policy) is pro-competitive and pro-consumer and consistent with all laws and regulations.”

PLS’s attorneys at Jenner Block and Davis Wright Tremaine did not immediately respond to requests for comment. The company took down its agent-only website in 2020 and launched a new site, TheNLS.com, early last year.

Its appeal drew amicus support from the U.S. Justice Department’s antitrust division, the American Antitrust Institute, and a group of 10 antitrust law professors.

PLS, the amicus briefs, and the 9th Circuit all faulted the lower court’s analysis of “consumer injury,” which is a required element in antitrust lawsuits between competitors. U.S. District Judge John Holcomb had dismissed the case largely because PLS failed to allege injury to the “ultimate” consumers - home buyers and sellers.

Based on a 2003 precedent, the 9th Circuit said, Holcomb should have considered the direct consumers of the listing services - the buyers’ and sellers’ agents, who allegedly were left “with fewer choices, supra-competitive prices, and lower quality products” to market their pocket listings as a result of NAR’s policy.

The case is The PLS.com LLC v. National Association of Realtors et al., 9th U.S. Circuit Court of Appeals, No. 21-55164.

For The PLS.com: Christopher Renner and Douglas Litvack of Jenner Block; David Gossett and Adam Sieff of Davis Wright Tremaine

For National Association of Realtors: Ethan Glass of Cooley; William Burck and Derek Shaffer of Quinn Emanuel Urquhart Sullivan

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