Top Agent Network, Inc. v. National Association of Realtors

Background

Top Agent Network, Inc. (TAN) challenged a policy adopted by the National Association of Realtors (NAR) and its local affiliate, SFAR. TAN alleged that the policy violated antitrust laws by limiting its ability to obtain real estate listings. The opinion states that TAN’s theory was that the policy prevented NAR members from placing listings exclusively on TAN, and that the policy could reduce consumer choice.

Court’s analysis

The court assumed, for purposes of the motion, that TAN had correctly defined the relevant market. It nevertheless found that TAN had not adequately alleged an antitrust violation.

First, the court said TAN treated NAR as though it were a single corporation focused on profiting from a product. The court explained that NAR and SFAR are associations made up of many individual members and may have room to impose reasonable rules that prevent a minority of members from benefiting at the expense of the broader membership. The complaint did not account for that circumstance.

Second, TAN did not adequately respond to NAR’s plausible assertion that the policy had procompetitive effects—meaning effects that could improve competition or market availability—by making more listings available to more agents and prospective buyers. TAN speculated that some listings would shift to exclusive listings within brokerages, but did not allege with enough specificity and plausibility that this would be the policy’s sole or primary effect.

Third, the complaint assumed that the policy would prevent competing listing services such as TAN and The PLS.com from operating, but did not adequately explain why. The court found that TAN had not sufficiently described the defendants’ market power or explained why certain agents could not succeed by using networks with exclusive listings instead of the multiple listing service.

Fourth, the court stated that harm to TAN would not necessarily be harm to the listing-services market or the market for homes. TAN alleged that it was being cut off from real estate listings, but the policy only prevented NAR members from placing listings exclusively on TAN. TAN did not plausibly allege that having multiple smaller listing services, each with separate exclusive listings and subscription fees, would benefit home buyers or sellers.

Finally, TAN did not allege that anyone would pay more because of the policy. The court noted that TAN did not claim that agents would pay more for listing-service subscriptions or that people would pay more for real estate. The court found that TAN’s antitrust-harm theory rested on speculative restrictions on consumer choice and did not adequately show meaningful harm to consumers.

Disposition

The court granted the motion to dismiss. It stated that TAN had failed to allege an antitrust violation but had not yet reached a definitive conclusion that amendment would be futile. The order therefore gave TAN one final opportunity to amend its complaint, with the amended complaint due within 21 days and the defendants’ response due 14 days later. Judge Vince Chhabria signed the order on April 27, 2021.