Mega MLSs, But Not NAR, Settle Pocket Listing Suit

Key Takeaways:

– California Regional MLS (CRMLS), Bright MLS, and Midwest Real Estate Data (MRED) have reached a settlement-in-principle with ThePLS.com in a pocket listing lawsuit.
– The settlement means that the parties have agreed on key terms of a deal.
– The defendants have requested that the court stay all deadlines to allow them to finalize the settlement agreement.
– The lawsuit was filed by The PLS against the National Association of Realtors (NAR) and the MLSs over a policy designed to curb pocket listings.
– The policy requires listing brokers to submit a listing to their MLS within one business day of marketing a property to the public.
– Office exclusives, or listings marketed entirely within a brokerage without submitting them to an MLS, are exempt from the policy.
– The Clear Cooperation Policy went into effect on Jan. 1, 2020, and its implementation deadline was May 1, 2020.
– NAR is also facing a similar pocket listing case brought by Top Agent Network.

inman:

CRMLS, Bright MLS and MRED told the U.S. District Court of the Central District of California’s Western Division they had reached a deal “in principle” with ThePLS.com.

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Three of the nation’s largest multiple listing services have reached a settlement in a yearslong pocket listing lawsuit, though the National Association of Realtors remains a defendant in the case.

On Wednesday, Jan. 24, attorneys for defendants California Regional MLS (CRMLS), Bright MLS, and Midwest Real Estate Data (MRED) and plaintiff ThePLS.com informed the U.S. District Court of the Central District of California’s Western Division that they had reached a settlement-in-principle of all claims between them, meaning they have agreed on key terms of a deal.

The filing requested that the court stay all deadlines pertaining to the settling defendants “to allow the settling parties to finalize the draft settlement agreement, to obtain necessary signatures, and to conserve judicial and party resources.”

On Thursday, Jan. 25, Judge John W. Holcomb granted their request.

In May 2020, The PLS, formerly a private listing network for real estate agents, filed a federal antitrust lawsuit against NAR and the MLSs over a policy designed to curb pocket listings.

The suit alleged the defendants had violated the federal Sherman Antitrust Act and California’s Cartwright Act for adopting the Clear Cooperation Policy, which requires listing brokers to submit a listing to their MLS within one business day of marketing a property to the public.

Office exclusives, or listings marketed entirely within a brokerage without submitting them to an MLS, are exempt from the policy. Some real estate brokers have threatened mutiny over the office exclusives exception to the Clear Cooperation Policy, which they argue inadvertently benefits large, national brokerages at the expense of smaller, independent brokerages.

The controversial rule is meant to effectively end the growing practice of publicizing listings for days or weeks without making them universally available to other agents, in part to address fair housing concerns. The Clear Cooperation Policy went into effect on Jan. 1, 2020, and its implementation deadline was May 1, 2020. Some MLSs have instituted hefty fines to enforce it.

The PLS’s case was initially tossed in a lower court, but that decision was overruled on appeal and returned to the lower district court.

NAR is also fighting a similar pocket listing case brought by Top Agent Network, which is ongoing.

A spokesperson for Bright declined to comment but said they expected to be able to comment on Friday. CRMLS declined to comment. Inman has reached out to NAR for comment and will update this story if and when a response is received.

Editor’s note: This story has been updated to note that the court granted the MLS defendants’ request for a stay.

Email Andrea V. Brambila.

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Property Chomp's Take:

Three of the largest multiple listing services (MLS) in the United States, namely California Regional MLS (CRMLS), Bright MLS, and Midwest Real Estate Data (MRED), have reached a settlement in a pocket listing lawsuit with ThePLS.com. The National Association of Realtors (NAR) remains a defendant in the case. This settlement-in-principle signifies that the parties involved have agreed on the key terms of the deal.

The pocket listing lawsuit was filed in May 2020 by ThePLS.com, a former private listing network for real estate agents. The lawsuit alleged that NAR and the MLSs violated the federal Sherman Antitrust Act and California's Cartwright Act by implementing the Clear Cooperation Policy. This policy requires listing brokers to submit a property to their MLS within one business day of marketing it to the public. The policy aimed to curb pocket listings, which are listings marketed exclusively within a brokerage without being submitted to an MLS.

The Clear Cooperation Policy went into effect on January 1, 2020, with a deadline for implementation on May 1, 2020. Some MLSs have imposed significant fines to enforce the policy. However, the policy has faced criticism from real estate brokers who argue that the office exclusives exception, which allows listings to be marketed within a brokerage without MLS submission, benefits large national brokerages at the expense of smaller independent brokerages.

The PLS's case was initially dismissed in a lower court but was overruled on appeal and returned to the lower district court. NAR is also facing a similar pocket listing case brought by Top Agent Network, which is still ongoing.

The settlement-in-principle between CRMLS, Bright MLS, MRED, and ThePLS.com is a significant development in this pocket listing lawsuit. While the terms of the settlement have not been disclosed, the agreement indicates progress towards resolving the claims between the parties involved.

It is important to note that NAR remains a defendant in the case, and the settlement does not directly involve them. As the case continues, it will be interesting to see how the outcome of this lawsuit could potentially impact the real estate industry and the implementation of the Clear Cooperation Policy.

In conclusion, the settlement-in-principle reached by CRMLS, Bright MLS, and MRED with ThePLS.com in the pocket listing lawsuit marks a significant step towards resolving this long-standing legal dispute. As the case progresses, it will be worth monitoring the potential implications for the real estate industry and the future of the Clear Cooperation Policy.

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