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The judgment is good news for NAR, which is facing legal challenges in various states across the country over similar allegations that take issue with the three-way agreement.
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A lawsuit filed last November by a real estate broker in Northern Texas alleging that the National Association of Realtors, local real estate associations and the local multiple listing service engaged in antitrust practices has been thrown out by a federal judge.
The suit, which was filed by Wichita Falls-area broker Luz de Amor Eytalis (who also goes by “Lou”), revolves around what is known as the “three-way agreement,” an NAR rule that requires agents and brokers to join a local, state and national Realtor association in order to qualify for membership in any of those NAR affiliates. In many states, agents are also required by Realtor-affiliated MLSs to be association members in order to access the MLS.
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In her complaint, Eytalis alleged that NAR, the Texas Association of Realtors, the Wichita Falls Association of Realtors and Wichita Falls Association of Realtors MLS engaged in monopolistic practices by requiring agents to join these associations in order to access the MLS. She claimed that the situation imposed “a financial burden without proportional benefit and penalizing agencies if members opt to not join the membership impeding their ability to do business.”
Eytalis also alleged that she was “forced” to pay dues for inactive agents that were affiliated with her brokerage, Strategic Realty, in order to maintain access to the MLS. As part of the “three-way agreement,” brokers are also required to pay membership dues for all licensed agents affiliated with their firms.
U.S. District Court Judge Reed O’Connor, who oversaw the case, did not provide any commentary in the judgment filed on Tuesday, but simply stated that claims under the antitrust Sherman and Clayton acts were dismissed. The judge also dismissed Eytalis’ state law claims, though they were dismissed without prejudice — meaning they can be refiled.
The move is a good sign for NAR, since the association has been sued in several other states over similar allegations, including California, Georgia, Michigan, Pennsylvania and Louisiana.
“We are pleased the court has dismissed the case,” a spokesperson said in an email sent to Inman. “MLSs are operated at the local level and each MLS determines individual participation requirements. Similar to other national membership organizations, NAR’s integrated structure is fundamental to the value we deliver to members. It provides members with a unified voice on policy issues, a uniform Code of Ethics, and valuable tools and professional development opportunities that help members get to, and execute, their next transaction more efficiently.”
Inman has reached out to Eytalis and will update this story if she responds.
In previous filings, a magistrate judge said that Eytalis did not provide ample evidence that federal and state laws were being violated through the Realtor organizations’ membership policies.
