AgentReal Estate

Court revives challenge to pocket listings ban

Appellate panel rules there's a credible argument that NAR is unlawfully squeezing out competitors

The fight to undo the National Association of Realtors’ pocket listings ban is back after a federal appeals court’s forceful ruling Tuesday.

A three-judge U.S. 9th Circuit Court of Appeals panel reversed a lower court judge’s dismissal of an antitrust lawsuit PLS.com – an erstwhile acronym for pocket listings service – filed against the NAR policy, officially titled Clear Cooperation.

The policy states that real estate agents who are NAR members must publicize their listing in their designated Multiple Listings Service, or face penalties handed out by said MLS. The majority of the 600 or so MLS’s nationally are owned by a local NAR affiliate.

The three-judge panel did not rule on the merits of the case. But it did say PLS.com had a credible legal argument that this NAR-MLS arrangement is a harmful monopoly.

“The Clear Cooperation Policy, as PLS characterizes it, shares all the hallmarks of a group boycott,” wrote appellate court judge Milan Smith in the opinion. “PLS’s competitors coerced its suppliers (seller’s agents) not to supply PLS with listings (or to do so only on highly unfavorable terms), and they did so for the express purpose of preventing PLS, a new entrant to the market after decades of little to no competition, from competing with the MLSs.”

The NAR responded to the ruling with a statement reading in part, “We are disappointed in this decision. The Clear Cooperation Policy advances equal opportunity in housing by ensuring listings are widely available and accessible to all.”

“We look forward to the next stage of this case,” the Realtor’s group added, “in which we will show the Clear Cooperation Policy is pro-competitive and pro-consumer and consistent with all laws and regulations.”

The panel’s opinion sends the case back to Los Angeles federal court. Previously, federal court judge John Holcombe had ruled that the PLS.com claims were baseless because it did not show the pocket listings ban ultimately harmed homesellers, or homebuyers.  

But the 9th Circuit panel argued, “Businesses that use a product or service as an input to provide another product or service can be consumers for antitrust purposes.”

The panel, in fact, seemed a bit miffed at the lower court’s conclusion. “The legal basis for the district court’s conclusion is not clear,” Smith wrote.

This particular business in question, PLS.com, was formed by a quartet of agents at The Agency, a Beverly Hills-based real estate brokerage that often represents public figures and people of extraordinary wealth.

The agents, who include Agency founder Mauricio Umansky, gave PLS.com a type of snob appeal, arguing it was high-end listings not seen elsewhere, but also asserting that their service protected the privacy of clients in a way MLS’s cannot. Consumer-facing websites including Zillow, Realtor.com, and Redfin are almost entirely straight aggregators of MLS data.

PLS’s current make-up as a going business is unclear. PLS and Umansky declined to comment.