California judge reopens NAR pocket listing lawsuit

Top Agent Network suit survived motion to dismiss

California Judge Reopens NAR Pocking Listing Lawsuit
NAR Interim CEO Nykia Wright and Top Agent Network CEO David Faudman (NAR, LinkedIn)

The National Association of Realtors legal woes aren’t letting up any time soon. 

A judge in the California Northern District Court on Monday reopened a lawsuit over the trade group’s pocket listing policy. 

The order is the first movement on the case since August, when a circuit court vacated a previous motion to dismiss the lawsuit. Federal District Judge Vince Chhabria set a case management conference for Jan. 26.  

The lawsuit dates back to May 2020, when private listing service Top Agent Network challenged NAR’s Clear Cooperation Policy. The measure aims to limit pocket listings, which are for sale privately and kept off the local multiple listing service. 

The platform alleges in the suit NAR and two other realtor associations were in violation of antitrust laws because of the rule requiring listing agents put a property on the local MLS within one day of marketing a home for sale. 

The Department of Justice and the Supreme Court dealt NAR blows related to the case in the last year, with the highest court in the land in January refusing the trade group’s petition it review a ruling in a lower court. The DOJ in March filed an amicus brief in support of Top Agent’s appeal. 

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NAR did not immediately respond to requests for comment. 

David Faudman, CEO of Top Agent Network in a statement said the company is pleased the case is back in the hands of the district court over the policy, which he said “violates the law and must be modified or, better yet, ended altogether.”

“NAR is not entitled to force the entire industry onto the MLS, and agents have the right to use alternate property sharing services as they and their clients see fit,” Faudman said. “Now that TAN is free to proceed to discovery, we are confident that the evidence will show that NAR’s anticompetitive behavior harms agents, consumers and the overall real estate market.“

The development comes as NAR is facing a wave of legal action, including ongoing antitrust litigation and appeals over its buyer agent commission practices. 

NAR, Keller Williams and HomeServices of America were found liable in the landmark Sitzer/Burnett case when a verdict landed last month, saying the firms colluded to keep commissions high. The jury also awarded plaintiffs $1.8 billion in damages, which could be the damages to more than $5 billion.

The DOJ is involved elsewhere in the trade group’s antitrust suits, even weighing reopening its own probe into the trade group despite NAR’s arguments otherwise. The department had previously agreed to settle its investigation into NAR’s commission-sharing policies under President Donald Trump’s administration, but later withdrew from that deal after President Joe Biden entered office. 

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