Key Takeaways
- • The Council of MLSs (CMLS), representing 236 MLS members with more than 1.7 million subscribers, is finalizing contributions totaling more than $1 million for a legal action fund, according to CMLS CEO Jessica Edgerton as reported by The Real Deal.
- • The fund is a direct response to antitrust litigation threats from brokerage Compass, whose CEO Robert Reffkin warned at a Florida conference on Sept. 30 that Compass would sue MLSs that continue to fine or punish subscribers for publicly marketing office exclusives.
- • The fund is designed to support legal matters of significance to the broader MLS industry, with written eligibility criteria, conflict-of-interest procedures and independent antitrust review; grant applications are not yet open.
- • The dispute is escalating in court: California Regional MLS (CRMLS) sued Compass in early October, Compass countersued CRMLS, and six additional MLSs filed a joint suit against Compass this week.
Summary
The Council of MLSs (CMLS) is finalizing contributions of more than $1 million to a legal action fund intended to finance litigation of significance to the multiple listing service industry, CMLS CEO Jessica Edgerton told The Real Deal, which first reported the story. CMLS, which counts 236 MLS members representing more than 1.7 million subscribers, said on its website that the fund "will provide financial assistance for legal matters of significance to the broader MLS industry, extending beyond any single organization." The organization said the fund will operate under clear written eligibility criteria, conflict-of-interest procedures and independent antitrust review, and that contributors "will not influence case selection or receive preferential access to funding." Grant applications are not yet open.
The fund follows escalating threats from brokerage Compass. According to reporting by Inman, Compass CEO Robert Reffkin told the trade group's conference in Florida on Sept. 30 that unless MLSs stopped fining or punishing subscribers for publicly marketing office exclusives, Compass would sue them for antitrust violations. The same day, California Regional MLS (CRMLS) said it would not comply with Compass' demands and was establishing its own legal defense fund. Two additional MLSs have since publicly refused to comply.
Litigation has already begun. In early October, CRMLS sued Compass proactively, asking the court to declare that its cooperation rules do not violate state or federal antitrust laws and to bar Compass from filing an antitrust suit against the MLS. Compass has since filed its own complaint against CRMLS and has said it intends to sue Austin-based Unlock MLS. This week, six more MLSs filed a joint lawsuit against Compass seeking an injunction similar to the one CRMLS requested.
In a LinkedIn post, Edgerton, a former litigator and former chief legal officer of Leading Real Estate Companies of the World, argued that MLSs provide transparency for buyers, give small brokerages reach comparable to global firms, and supply lenders with the data integrity needed for mortgage underwriting. She said courts exist "to resolve disputes on their merits" and warned that "when a company can win by threatening to outspend its opponent, the size of its legal budget replaces the strength of its argument." CMLS said it "stands ready" to support the MLS industry in its defense.
The fund follows escalating threats from brokerage Compass. According to reporting by Inman, Compass CEO Robert Reffkin told the trade group's conference in Florida on Sept. 30 that unless MLSs stopped fining or punishing subscribers for publicly marketing office exclusives, Compass would sue them for antitrust violations. The same day, California Regional MLS (CRMLS) said it would not comply with Compass' demands and was establishing its own legal defense fund. Two additional MLSs have since publicly refused to comply.
Litigation has already begun. In early October, CRMLS sued Compass proactively, asking the court to declare that its cooperation rules do not violate state or federal antitrust laws and to bar Compass from filing an antitrust suit against the MLS. Compass has since filed its own complaint against CRMLS and has said it intends to sue Austin-based Unlock MLS. This week, six more MLSs filed a joint lawsuit against Compass seeking an injunction similar to the one CRMLS requested.
In a LinkedIn post, Edgerton, a former litigator and former chief legal officer of Leading Real Estate Companies of the World, argued that MLSs provide transparency for buyers, give small brokerages reach comparable to global firms, and supply lenders with the data integrity needed for mortgage underwriting. She said courts exist "to resolve disputes on their merits" and warned that "when a company can win by threatening to outspend its opponent, the size of its legal budget replaces the strength of its argument." CMLS said it "stands ready" to support the MLS industry in its defense.
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