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NAR asks court to toss listing agent omission lawsuit

Arizona broker alleges antitrust violations in lawsuit over rules regarding listing agent attribution

The National Association of Realtors (NAR) last week asked a federal court to dismiss a lawsuit filed by broker Grady Hillis of Grady Hillis Realty in Lakeside, Arizona.

In the motion to dismiss, NAR states that the lawsuit does not satisfy minimum pleading requirements and does not state a valid claim. The trade group said the lawsuit was chock full of “repetitive and confusing allegations.”

Hillis first filed the lawsuit, in which NAR, Arizona Association of Realtors and the White Mountain Association of Realtors (WMAR) are named as defendants, in September, alleging that the organizations have been redacting information about the listing agent from his sales listings when a copy was emailed to a potential buyer. Hillis’s claims include breach of contract, negligence, tortious (wrongful) interference with a contractual relationship, aiding and abetting tortious conduct, and violations of the First Amendment and antitrust laws. In addition, Hillis is seeking $1.18 billion in punitive damages, a number he reached by multiplying the cost of the dues he pays the Realtor associations in one year ($843) by 1.4 million Realtors.

On January 25, Hillis filed a 1,295 page amendment to his initial complaint, notable for its unusual length. The amendment includes 1,013 separate allegations against the Realtor associations, however, it appears to repeat the same allegation for each listing in which Hillis’s contact information was removed from the listing description in the WMAR multiple listing service.

“From the face of the Amended Complaint, NAR cannot understand the nature of the claims Plaintiffs are asserting against NAR, discern Plaintiffs’ legal theories, or meaningfully admit or deny Plaintiffs’ repetitive and confusing allegations,” NAR’s attorneys wrote in the motion to dismiss. “The Amended Complaint therefore fails to provide the ‘short and plain’ statement of Plaintiffs’ claims that is required …”

In the filing, NAR attorneys also highlight what they call “substantive defect” in the complaint that they believe are “fatal” to Hillis’s claims, stating that Hillis never identified a contract between himself and the NAR that could have been breached, and that Hillis lacked factual allegations regarding the antitrust claims he makes. NAR’s attorneys also state that “Plaintiffs assert First Amendment claims against NAR, but NAR is not a government actor. Plaintiffs assert negligence claims, but they identify no duty owed to them by NAR.”

MLSs across the country have rules in place prohibiting listing agent contact information from appearing in listing descriptions. In 2021, however, California Regional MLS (CRMLS) and NAR adopted new policies that sought to clarify who the listing agent or broker is on online listings.

Hillis’s complaint also said that the Realtor associations require that Supra lockboxes be used on listed homes and that only member of WMAR can use the lockboxes, which he alleged was anti-competitive. Similar allegations have been made by the U.S. Department of Justice and discount brokerage REX Real Estate. Hillis has since voluntarily dismissed Supra and MLS vendor FBS as defendants.