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Young v. Whidbey Island BOR: Membership-based MLS Access Violates Washington State Statute

In Young v. Whidbey Island Board of REALTORS®, the Supreme Court of Washington affirmed a superior court holding that limitations on MLS access based on membership in a local Board of REALTORS® violated the Unfair Business Practices-Consumer Protection Act (UBP-CPA). The supreme court also affirmed that the doctrine of avoidable consequences (i.e., mitigation of damages) was applicable to claims brought under the Act.

Young was a licensed real estate salesman who worked for a broker, Johnson, in Island County, Wash. The Whidbey Island Board of REALTORS® (Board) operated the only MLS in Island County, wherein most sales were achieved through MLS listings. Participation in the MLS required that users be members of the Board. However, non-member salesmen who worked for member brokers were given access provided additional dues were paid for each such salesman.

In 1978, the Board terminated Young's Board membership and suspended him from the MLS. At that time, Young was still able to access the MLS through Johnson, who was a member broker. However, after a failure to pay dues, Johnson received a letter from the Board demanding that he, or indirectly, Young, pay non-member dues. The Board threatened to revoke Johnson's Board membership and MLS access if he continued to allow Young to work for him without paying non-member dues. As a result, Johnson returned Young's real estate license to the real estate commission, and Young was unable to find work in Island County. Young sued the Board claiming that violations of the UBP-CPA impaired his ability to participate in his profession. He specifically alleged a conspiracy by the Board and its members in restraint of trade, unfair competition and practices, and a group boycott.

The superior court concluded that Young had been injured by the Board's violations of RCW 19.86.020 (unfair method of competition and unfair acts and practices) and RCW 19.86.030 (unreasonable restraint of trade and commerce), and permanently enjoined the Board from restricting Young's access to the MLS, provided that Young comply with all other membership requirements other than membership in the Board. The defendant Board did not appeal those findings or the injunction. The Supreme Court of Washington noted that the superior court's ruling in that regard was based on the Board's failure to have the MLS entrance requirements approved by the Real Estate commission, as required by statute, and on the Palsson case from California. The supreme court nevertheless went on to comment that neither the membership requirement nor the requirement that the salesman take an MLS orientation course was "an unreasonable requirement on its face," and that the statute itself "can reasonably be interpreted as permitting a requirement that brokers desiring to use the (ML) service join the association."

Young appealed the amount of damages. With regard to damages, the superior court did not allow a penalty under the Consumer Protection Act (CPA). The court stated that although the Board's actions were intentional, they did not constitute an intentional violation of the CPA, as the Board was acting under a mistaken impression that their actions were proper. The court also applied the doctrine of avoidance of consequences to limit the damages award. The court found that Young did not seek employment of a similar nature within or without the area, nor did he seek employment of a different type. The court also found that employment was available to him within a reasonable distance. The court held that he had a reasonable opportunity to avoid the consequences of the Board's actions, but that he failed to do so. Thus, his damage award was reduced from $13,500 to $7,500.

The Supreme Court of Washington affirmed the holdings of the superior court regarding avoidable consequences, the denial of treble damages, and the amount of damages awarded.

Young v. Whidbey Island Board of REALTORS®, 96 Wash. 2d 729, 638 P.2d 1235 (1982).