The National Association of Realtors has filed a motion to dismiss the complaint filed by the Department of Justice against the organization in Civil Action No. 05 C 5140 with a memorandum of law in support.

Specifically the motion requests relief because the complaint addresses a virtual office website policy that is no longer in effect and seeks to force brokers to place their listings on competitors websites without the opportunity to opt-out of doing so if they wish. The net effect is that the DOJ appears to want MLSs to perform as public utilities. The NAR's position is that if a broker wishes to opt-out of sharing listings on a competitor's website that should be his/her choice as the decision to do so would be individual, and not part of a collective group decision to do so, which would violate anti-trust laws.

The NAR moves to dismiss the DOJ's claim that the "opt-out" provision in both the former 2003 VOW policy and its replacement policy, the Internet Listings Display Policy "do nothing more than permit individual entities to make independent decisions regarding whether to authorize display of their own listings on the Internet sites of other entities."

The motion to dismiss requests the court to dismiss plaintiff's claim challenging the "opt-out" provision in the 2005 ILD policy because the complaint fails to state a cause of action against that policy under Section 1 of the Sherman Act.

Attorney Ralph Holman, associate counsel for the NAR explains, "We filed the motion as it relates to three bases: there is no basis for the DOJ to challenge the 2003 VOW policy because it doesn't exist anymore. We don't want to defend a policy we have rescinded. The Court should dismiss the case as it relates to the "opt-out" challenges because all the opt-out rules do is allow a broker to opt-out and not allow his listing to be displayed on another broker's site. That is unilateral conduct rather than collective conduct which is what antitrust laws prohibit. Third, as it relates to 2005 ILD policy, the complaint doesn't allege any anticompetitive effect to that policy, and that is a fundamental requirement of an antitrust violation."

Holman says that the DOJ has 60 days to respond.

The DOJ filed suit against the NAR on September 8, 2005 in the U.S. District Court in Chicago alleging that the NAR "obstructs real estate brokers who use innovative Internet-based tools to offer better services and lower costs to consumers." The Department said "that NAR's policy prevents consumers from receiving the full benefits of competition and threatens to lock in outmoded business models and discourage discounting."

While the DOJ acknowledged that the NAR had revised its listings-sharing policy enacted in 2003, it said "the revised policy (ILD Policy, 2005) continues to discriminate against innovative brokers, and does not resolve the Department's concerns."

In its complaint, the DOJ alleges that "NAR's policy restrains competition by requiring NAR-affiliated MLSs to adopt rules that will allow brokers to withhold their clients' listings from other brokers' websites by means of an "opt out." In essence, NAR's policy enables traditional brokers to block their competitors' customers from having full on-line access to all of the MLS's listings. When exercised, the opt-out provision prevents web-based brokers from providing all MLS listings that respond to a customer's search, effectively inhibiting the new technology."

The NAR has responded with a white paper that suggests that competition is so stiff in the industry that commissions have dropped from a perceived industry standard of about 6 percent to considerably lower and wider range of 4.3 to 5.3 percent.

Did the DOJ just shoot from the hip in its complaint?

"I don't know," responds Holman. "There is no value in speculation as to why they wrote the complaint the way they did.

"We think it is on solid ground and whether the court is persuaded is something we will have to see," he says.

The Department of Justice was contacted for this story, but did not respond in time for publication.