It may be a new year, but the National Association of Realtors (NAR) is continuing to face legal challenges over its membership structure.
The newest suit was filed last week in the U.S. District Court for the Middle District of Louisiana by Carla DeYoung, Tammy Jo Williams, Darlene Currie and Carlos Alvarez. Each of the plaintiffs hold real estate licenses in Louisiana as either agents and/or appraisers.
The suit claims that the defendants have engaged in unlawful tying arrangements that compel membership to Realtor associations in order to gain access to MLS data.
“Such practices limit competition, harm consumers, and disproportionately affect all real estate professionals within the real estate industry,” the suit states. According to the suit, the local Realtor associations “require individuals to maintain membership with NAR, LRA, and a Realtor board within the state of Louisiana to qualify for membership in the MLS that serves the plaintiffs market area.”
The plaintiffs claim that the current membership structure does not provide all real estate licensees with equitable access to the data they need to do their job.
“By excluding non-association real estate professionals from cooperating through the MLS system with association members, they have created an environment that favors certain real estate professionals over others,” the complaint states.
“This exclusion undermines the principle that all real estate professionals are independent contractors and limits opportunities for collaboration and has directly contributed to reputational harm for non-member real estate professionals. As a result, the market is hindered, leading to fewer options for consumers and negatively affecting overall market dynamics.”
The complaint also views the practice as a barrier to fair business practices.
The plaintiffs also allege that the commission lawsuits, in which NAR was a defendant, created a “a breach of trust, causing widespread reputational harm and member dissatisfaction.” They claim that they experienced “severe emotional distress, including anxiety, frustration, and a sense of betrayal due to the lack of transparency and the unilateral decisions made by NAR” in how the trade group handled the Sitzer/Burnett trial and its ultimate settlement agreement.
According to the complaint, Louisiana Realtors lobbied the state government to implement laws that reflect the business practice changes outlined in NAR’s settlement.
“These changes resulting from the NAR settlement have had a significant impact on all real estate professionals, as they reflect the broader implications of the settlement and the policies adopted at the national level,” the complaint states. “Consequently, these legislative measures have altered the operational landscape for real estate agents in Louisiana, affecting their practices and potentially their reputations within the industry.”
The plaintiffs are asking the court to recognize that MLSs should operate independently of NAR policies, or policies similar to NAR’s, that “may perpetuate antitrust violations.”
In addition, the plaintiffs are asking for a permanent injunction prohibiting the defendants from enforcing mandatory association memberships in order to access the MLS; damages for emotional distress and for the defendants’ alleged antitrust violations; restitution for “any fees or payments unlawfully obtained from Plaintiffs as a result of Defendants’ conduct”; attorneys fees and a jury trial.
The defendants did not return HousingWire‘s requests for comment.
This suit joins others, including the Hardy suit, which was filed in Michigan in August, and the Eytalis suit filed in Texas in late November, with similar allegations.
In addition, NAR is currently in the process of revoking the charter of Phoenix Realtors (PAR) due to the local association’s decision to offer an MLS Choice membership option. This enables real estate licensees to become members of PAR and access the local MLS without becoming members of the Arizona Association of Realtors or NAR.
