Only Members May Access MLS

U.S. District Court, Western Wisconsin: Reifert v. S. Central Wisconsin MLS Corp., 2005

January 1, 2006

A federal court has upheld an MLS’s requirement that only members of a REALTOR® association can participate in the MLS.

In the case, Jay Reifert, a member of the REALTORS® Association of South Central Wisconsin, sued the MLS, alleging the association had violated antitrust law by tying membership to MLS participation. Reifert had tried to purchase MLS services without becoming an association member, but the MLS denied his request. He then became a member for four years but claimed he didn’t want the other services, such as publications, provided by the association.

The district court rejected the allegation that the tying of the membership and MLS violated antitrust law. To show such a violation, a plaintiff must demonstrate that the tying restrains competition in the relevant market and has a substantial effect on interstate commerce. The party must also show that the tying company has an economic interest in the sales of the tied product.

The court determined that Reifert had failed to produce evidence showing that competition for real estate services like those offered by the association had been stifled in the market because of the tying.

Reifert produced expert testimony stating that approximately 20 percent of association members would not have joined the association except for the tying of services. The expert based this statement on figures from Alaska and Massachusetts, where the expert asserted, in some cases, association membership isn’t required for MLS access. But the court found that the fact that some members might have had to purchase unwanted services wasn’t a sufficient reason to demonstrate that the requirement impacted interstate commerce.

The court also rejected the allegation that the tying restrained interstate commerce because it prevented members of the association from joining a variety of other real estate organizations, including the Asian Real Estate Agent Association, the National Association of Exclusive Buyer Agents, and the National Association of Independent Fee Appraisers. Even though no South Central Wisconsin association members belonged to these other groups, the court found no evidence that that was because of the need to join the REALTOR® association. All of these groups offer different services than the REALTOR® association.

The court also noted that because no other competing association offered comparable services in the Wisconsin area, the plaintiff’s contention that the Reifert case was similar to Thompson v. Metropolitan Multi-List Inc. (11th cir. 1991) was incorrect. In that case, the court had ruled a tying arrangement between an association and an MLS was unlawful. It based its decision on the fact that a competing and very similar association in the area showed that it would have attracted hundreds of members except for the fact that MLS access was tied to the membership in the REALTOR® association.

Earlier, the court had also ruled against Reifert’s contention that linking association membership with access to the MLS constituted a group boycott. A summary of that decision appears in “Antitrust suit not a class action ” (September 2005, page 37).

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