I just attended my first meeting at the NAR Mid-Year. It was the MLS Association Executives Committee Meeting. There were three presenters to the group and I will provide some highlights of their presentations.
Laurie Janik, NAR General Counsel
Laurie indicated that claims against MLS under the NAR EO Insurance Policy have for the first time surpassed the number of general association claims. Out of 32 claims made this year, 18 involve MLS issues. Of the 18, 8 involve the FTC, 7 the DOJ and one involves a state attorney general. Most of the claims revolve around whether an MLS can exclude Exclusive Agency listings from data feeds to third party websites (e.g. Realtor.com). Since Exclusive Agency listing allow the seller to sell the house themselves, MLSs argue that allowing these listings to be displayed on the Internet basically enables the seller to have free advertising to attract a buyer without paying the listing side of the commission.
Laurie also discussed the DOJ lawsuit. NAR filed a motion to dismiss which raised three arguments:
First, that the DOJ is seeking injunctive relief for the VOW policy that has been rescinded and never implemented and as a result, there is no relief that can be granted under this claim.
Second, that the VOW Opt Out provision is neutral on its face, there is a presumption of cooperation and that decisions to Opt-Out are based on independent action of each broker.
Third, that the DOJ’s claim against the current Internet Listings Display Policy does not allege any anti-competitive effect.
Laurie cautioned that Motions to Dismiss are rarely granted in the 7th Circuit (where the suit is pending). She also said that 14 MLSs have been involved in DOJ subpoenas and that the NAR insurance coverage for this claim is gone so the MLSs that are involved are now spending their own money to respond to the subpoenas.
Lastly, she indicated that there was a productive settlement conference. She believes a key issue in the case will revolve around the MLS definition of “Participant