In a stunning development that threatens to shake the very foundations of the real estate industry, a group of prominent Michigan brokers has filed an antitrust lawsuit against the National Association of Realtors (NAR) and several state and local realtor organizations. This legal challenge comes at a critical moment, just days before major changes stemming from NAR’s nationwide commission lawsuit settlement are set to take effect.
The Plaintiffs: Heavy Hitters in Michigan Real Estate
The lawsuit, filed in U.S. District Court for the Eastern District of Michigan, is spearheaded by three influential figures in the state’s real estate scene:
- Douglas Hardy: Owner of Snyder Kinney Bennet and Keating LLC (operating as Signature Sotheby’s International Realty)
- Glenn Champion: Primary broker for Sotheby’s firms in Southeastern Michigan
- Dylan Tent: Representative of all agents and associate brokers at Sotheby’s in the region
The Defendants: A Who’s Who of Real Estate Organizations
The lawsuit targets a broad swath of real estate organizations, including:
- National Association of Realtors (NAR)
- Michigan Association of Realtors (MAR)
- The Grosse Pointe Board of Realtors (GPBOR)
- Greater Metropolitan Association of Realtors (GMAR)
- North Oakland County Board of Realtors (NOCBOR)
- RealComp II (MLS software company)
The Core Allegation: Compulsory Membership as Antitrust Violation
At the heart of the lawsuit lies a explosive claim: the requirement that all Realtors and brokers in Michigan must be members of NAR, their state Realtor association, and a local board of Realtors constitutes an antitrust violation. The plaintiffs argue that this mandatory membership represents:
- Economic coercion
- Unfair restraint on trade
- Conspiracy
The Settlement Agreement: A Catalyst for Legal Action
The plaintiffs point to NAR’s recent nationwide commission lawsuit settlement as a key factor in their decision to file suit. They allege that the settlement’s ban on offers of buyer broker compensation from the MLS:
- “Essentially invites brokers and agents to participate in deceptive compensation practices”
- “Encourage[s] discrimination among sellers and sellers’ agents”
- Will “negatively affect consumers, agents and brokers”
The Claimed Impact: Lost Earnings and Business Detriment
The lawsuit asserts that the defendants’ actions have resulted in:
- Loss of earning potential for the plaintiffs
- Overall detriment to their business operations
- Violation of their ability to conduct business “in a fair and unencumbered manner”
A Historical Precedent: Shifting the Burden to State and Local Associations
The complaint references previous lawsuits in Florida, Georgia, Alabama, and California that found compulsory NAR membership for MLS access to be an unfair restraint of trade. The plaintiffs allege that in response, NAR transferred the mandatory membership requirement to state and local associations, effectively “perpetuat[ing] their same compulsory membership practices which has been found to be illegal.”
Seeking Class Action Status: A Broader Impact
The lawsuit aims to achieve class action status, potentially representing:
- All real estate agents and brokers required to be NAR members
- All agents and brokers required to be MAR members
- All agents and brokers required to be members of local boards (GPBOR, GMAR, NOCBOR)
- All agents and brokers who must use RealComp II for MLS access
The Demands: Damages, Injunctive Relief, and a Jury Trial
The plaintiffs are seeking:
- Monetary damages
- Injunctive relief to halt the alleged anticompetitive practices
- A jury trial to hear their case
Potential Industry-Wide Ramifications
This lawsuit has the potential to fundamentally reshape the structure of real estate associations and MLS access across the United States. If successful, it could:
- End mandatory membership in NAR and local associations
- Open up MLS access to non-member brokers and agents
- Force a restructuring of how real estate professional organizations operate
As this legal battle unfolds, all eyes will be on Michigan to see if this challenge to the long-standing membership requirements of NAR and its affiliates will gain traction. The outcome could have far-reaching consequences for real estate professionals and consumers alike, potentially ushering in a new era of competition and choice in the industry.
