Listings lawsuit OK'd

November 29, 2006|By Bloomberg News

The National Association of Realtors lost a bid to dismiss a U.S. government antitrust lawsuit challenging its limits on access to multiple listings by consumers who use lower-cost Internet brokers.

The ruling by a federal judge in Chicago lets the Justice Department proceed to pretrial fact-finding to try to prove that the Realtors and member brokers engaged in an "ongoing contract, combination or conspiracy" to restrain competition.

U.S. District Judge Mark R. Filip rejected the Realtors' argument that the government had no case after the trade association in May 2005 changed the policy that limited online access to listings by customers of brokers who operate "virtual office Web sites."

The Realtors' "contention that the United States has failed even to plead a claim is unpersuasive," Filip wrote.

The trade association "and its members have entered into a collective action that purports to regulate how they will compete in the marketplace," the judge said.

The government's complaint, filed in September 2005, said the Realtors' rules limited competition by preventing customers of online brokers from receiving full access to multiple listings. The Realtors' policy lets traditional brokers block competitors from having full online access to multiple listings.

The Chicago-based Realtors' group changed its policy after the Justice Department said it planned to sue to challenge the rules as anticompetitive, according to Filip's opinion. The modified policy still contains features that the government claims are anticompetitive, the judge wrote.

The government has argued that the original policy had "enduring effects" in some markets and that the modified rules have "not eliminated all effects," Filip wrote.

"We are pleased that the court has allowed the lawsuit to proceed and we look forward to presenting our case at trial," J. Bruce McDonald, a deputy attorney general for antitrust, said in a statement released by the Justice Department.

Steve Cook, a Washington-based spokesman for the trade association, said the ruling "was very much expected and we are confident we can win on the merits of the case."

Filip, who was appointed to the federal bench in 2004 by President Bush, announced his ruling from the bench in September and released the opinion outlining his reasons late yesterday, Cook said.

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