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2007-02-23 13:22:00

NAR Legal Update: New and Pending Court Cases

I had the privilege of attending Laurie Janik's Legal Update presentation to a packed audience of Association Executives at Wednesday's final session of the 2007 AE Institute of the National Assn. of REALTORS held in San Diego. (Shown in photo are Laurie Janik and John Reilly.)

Laurie is NAR's well-respected General Counsel -- in fact, this May she celebrates her 20th year as General Counsel and 30th year with NAR.

Laurie updated the Institute attendees on the latest legal cases facing REALTOR associations, as well as other legal issues that could have an impact on REALTORS and associations. Laurie highlighted the issues in the 18 new lawsuits filed in 2006, substantially less than the number filed in most years. The cases ranged from arbitration matters, MLS suspensions, fair housing issues, anti-trust, to the use of the term MLS or MLS service in a web domain name. One case that was dismissed involved a discount broker who alleged boycott against a REALTOR association for not doing enough to prevent the alleged boycott by local brokers. Another suit NAR is watching closely is a patent infringement case involving the display of property listings using common mapping and zoom features.

One suit was brought by a group of brokers against their association after the Board voted to shut down a public web site that had carried the MLS listings for a number of years. The court agreed with the Board that the public site was not a core member service. Laurie pointed out that this court reviewed the MLS structure and held that the MLS is a Broker to Broker service to the members and not to the public.

The remaining portion of the update focused on recent developments with the Department of Justice (DOJ) and Federal Trade Commission (FTC) investigations of NAR and associations. Laurie reviewed the revised NAR policy on Exclusive Agency Listings. Here it is: 

"MLSs are not required to transmit Participants' listings to third-party aggregators or to operate a public web site displaying listing information.  If an MLS transmits Participants' listings to third-party aggregators and/or operates a public webs ite displaying listing information, all exclusive listings, regardless of type, will be included in the data feed (unless a Participant withholds consent for such transmission), except that MLSs may exclude from such data feed any listing where both of the following conditions are present: (a) the listed property's street address or a graphic display of the property's specific location will be displayed to the public; AND (b) the seller displays a "For Sale By Owner" or other sign or notice on the property indicating that the seller is soliciting direct contact from buyers."

As for the DOJ suit, NAR has argued to the DOJ that it is proper for Broker participants to have the right to opt-out and make the business decision to restrict the exposure of their property listings in certain cases. Laurie illustrated her point with

1) screen shots of an IDX display of another broker's listing that was "augmented" with a valuation estimate that differed greatly from the listing price, and

2) a display of another broker's listing in which the public can come in and make comments about the property and/or the seller. The DOJ suit was filed in September 2005 in Northern Illinois federal court. It will be decided by a Judge not a jury. Right now there is massive discovery taking place in 36 market areas, with an expected early 2008 trial date.

Most of the other sessions at the five-day Conference were recorded, including a risk reduction primer by Laurie and sessions by Saul Klein and Adorna Carroll.  A library of recorded sessions is available at

The AE Institute is one of the premier educational events of the year. As is typical of this event, this year's was well-organized, high energy, and packed with great programs. And, so nice it was only a 20-minute drive from my home!

(John Reilly is Vice President of Publishing of Real Estate Electronic Publishing Company, home of RealTown.)

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