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A Georgia federal judge has considered whether to dismiss a member’s antitrust challenge to a REALTOR® association’s multiple listing service (“MLS”) rules.
Jefferson W. Keller III (“Member”) is the owner of Century 21 Jeff Keller Realty (“Brokerage”) and a member of the Greater August Association of REALTORS® (“Association”). In February 2009, the Association fined the Member for listing his name, website address, and/or phone number in the “Public Remarks” or “Property Description” sections of certain listings that he submitted to the Association’s MLS. The Association’s MLS rules prohibited advertisements in the “sections viewable to the public through the Association’s MLS website, including but not limited to: photos, public remarks, directions, etc.”
The Member filed a lawsuit against the Association, claiming that the Association’s rules violated the settlement between NAR and the U.S. Department of Justice over NAR’s virtual office website rules (“Settlement”) by discriminating against brokerages operating over the Internet. The Member also claimed that the Association’s rules constituted an unlawful restraint of trade, and brought allegations for alleged harm under state law. The Association filed a motion to dismiss the Member’s lawsuit.
The United States District Court for the Southern District of Georgia dismissed the Member’s federal antitrust allegations with prejudice. The court stated that in order to survive a motion to dismiss, a party must allege factual content that would allow the court to conclude that the defendant could be liable for the alleged misconduct if the facts, as alleged, are true.
The court found that the Member had failed to allege any facts that supported his federal antitrust claims. The Member claimed that the rules impacted the ability of brokerages to communicate with customers over the Internet and instead favored more traditional, office-based brokerages. However, the Member failed to set forth any facts showing how the rule favored one business model over another. Instead, the Member’s lawsuit contained legal conclusions such as allegations that the Association’s conduct caused higher prices, but without providing any facts to support the allegations. The court also ruled that the NAR settlement with the DOJ had no relevance to the Member’s allegations. Thus, the court ruled that the Member’s antitrust allegations failed.
The court also found that the Member had failed to properly allege damages caused by the alleged antitrust violations. The federal antitrust laws exist to protect competition, not competitors. The Member claimed damages for alleged harm to his brokerage, not harm to competition in the market. Because the Member only alleged harm was to an individual competitor, he had failed to state an antitrust claim for damages. Thus, the court dismissed the antitrust allegations with prejudice, meaning the Member could not replead his antitrust claims in a new complaint.
Since the court dismissed the Member’s federal antitrust claims, only his state law claims remained. The court declined to exercise jurisdiction over these claims and so dismissed these claims without prejudice, allowing the Member to refile those claims in state court if he chooses to do so. Therefore, the court dismissed the Member’s entire lawsuit.
Keller v. Greater Augusta Ass'n of Realtors®, Inc., 760 F.Supp.2d 1373, (S.D. Ga. 2011)