NAR asks court to dismiss Michigan mandatory membership case 

Asserting that the necessary elements of an antitrust claim are largely absent, attorneys for the defendants in the Michigan mandatory membership lawsuit filed a motion to dismiss the case.

Known as the Hardy case, three real estate professionals are suing the National Association of Realtors, their state and local real estate associations, and Realcomp II, which operates a multiple listing service in the area. The suit was filed in August and amended in November.

The plaintiffs allege that requiring brokers to be dues-paying members of three organizations in order to access the MLS is essentially a violation of antitrust laws and is "economic coercion," depriving members of free choice.

Competition isn't an issue, defendants say: The associations and MLS aren't competing against anyone, nor do they hold power over the real estate market, the defendants' attorneys argue, making moot any anticompetitive claims. They also assert that much of the data in the MLS is publicly available, refuting the plaintiffs' statement in the amended filing that "brokers and agents have no alternate source to the information contained on the MLS."

"Even taking as true the Plaintiffs' implausible allegation that Realcomp is the only source of information available… Plaintiffs have not plausibly pleaded that the Defendants' alleged conduct has impacted competition," the Jan. 15 filing states.

Contradictory statements? Through their filings, the plaintiffs have argued that the removal of offers of compensation from the MLS "truly eliminated the sole purpose of the NAR and MAR sponsored MLS systems by eliminating the guarantee of compensation between brokers." At the same time, they state that MLS access "is essential to a Broker or agent transacting business."

The defendants, in their motion for dismissal, suggest that these claims are contradictory: If the MLS has been stripped of its sole purpose, it cannot also be essential, they argue. "Plaintiffs can't have it both ways," the attorneys stated.

Notably, the plaintiffs never deny the value of MLS data, calling out the need to access information about past sales, tax history, assessments, valuation, size and "other important statistics" to do their jobs effectively. 

And they don't expect to get this data for free — they simply don't want to pay for membership in three organizations as a prerequisite for MLS access. Such alternatives exist, including Phoenix Realtors' MLS Choice program, which does not require association membership. NAR, however, is trying to quash the program.

Other active challenges: Following the lead of the Hardy plaintiffs, several other agents and brokers across the U.S. have filed lawsuits related to mandatory membership and MLS access. Currently, cases in Texas, Pennsylvania and Louisiana are working their way through the federal court system. 

The outcomes could ultimately impact NAR's three-way agreement, which requires agents who join their local Realtor association to also join the state and national associations. The policy has received pushback in recent months, with some associations and industry observers arguing that NAR membership should be optional.