04/10/2008

Antitrust Lawsuit Against REALTOR® Association Dismissed

In a decision that reaffirms the integrity of the country's REALTOR®-owned and operated multiple listing services, the U.S. District Court for the Eastern District of Kentucky dismissed an antitrust lawsuit brought by a real estate broker in northern Kentucky against the Northern Kentucky Association of REALTORS® and its subsidiary, the Northern Kentucky Multiple Listing Service.

The broker, Sherry Edwards of Buyer's Corner, claimed NKAR's rule requiring membership in a local REALTOR® association to access services of the MLS constitutes an unlawful tying arrangement and a group boycott in violation of the federal Sherman Antitrust Act.

In his ruling, Judge William O. Bertelsman said Edwards lacks standing to bring an antitrust tying claim against the association because the harm the brokerage received--forced to purchase membership in the REALTOR® association to gain access to the local MLS--doesn't rise to the level of antitrust injury. "Plaintiffs fail to explain how they have been harmed by any restrained competition in the tied product market, " the judge said.

The plaintiffs also failed to show foreclosure in the market for the tied product, because she failed to show that other associations compete in the same product market as the REALTOR® association. Plaintiffs also failed to show the membership rule constituted an unlawful group boycott, because belonging to a REALTOR® association does not have an anticompetitive effect in the market for real estate association services, the judge said.

The complete decision is available online at http://www.realtor.org/realtororg.nsf/files/Kentucky_Antitrust.pdf/$FILE/Kentucky_Antitrust.pdf. A summary of a similar case, which also ruled in favor of the REALTOR® association, is also available online at REALTOR.org at http://www.realtors.org/PublicAffairsWeb.nsf/Pages/MLSRuling05.

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