Court advised to reject legal bid to compel NAR rule enforcement

A magistrate judge in the U.S. District Court for the Southern District of Florida’s West Palm Beach Division has recommended that the court deny plaintiff Jorge Zea’s preliminary injunction motion that seeks to compel the National Association of Realtors (NAR) along with 16 local Realtor associations and MLSs to follow their own rules. 

Filed in August, the lawsuit claims that the defendants engaged in a “coordinated scheme” to restrict consumer choice and maintain elevated prices, harming his brokerage model.

Zea runs www.snapflatfee.com, a brokerage that charges sellers a listing fee in exchange for limited services. Zea’s firm syndicates listings data to the MLS data feeds and forwards all buyer leads “regardless of their origin” directly to the seller. According to Zea, buyer’s agents associated with the defendants steer clients away from properties that offer a reduced or non-existent buyer’s agent commission. In his complaint he argues that this steering is the result of NAR and the other defendants not enforcing their own rules. 

The rules in question relate to the mandatory display of a listing broker’s contact information on the listing page in an IDX display, the commission lawsuit mandate for buyer agency agreements and the prohibition of MLS platforms from allowing users to search or filter search results by the name of the listing broker or agent, or by the amount of compensation offered. By allegedly refusing to enforce these rules, Zea claims that the defendants have competitively disadvantaged his discount-brokerage business. Due to this, he is asking the court to force the defendants to enforce their own rules. 

Last ditch attempt

In filings, Zea claimed that he filed the lawsuit as a last ditch attempt to get the defendants to enforce their own policies after roughly a year spent filing ethics complaints, submitting compliance requests and communicating with the defendants. 

In his recommendation, Matthewman notes that the evidence presented by Zea shows that he waited almost a full year between drafting his first email to the defendants and filing his motion for preliminary injunction. 

“This delay significantly undermines his assertion of irreparable harm,” Matthewman wrote. “Here, the Motion should be denied first on the basis that Plaintiff waited almost a year to file it after he started communicating with Defendants regarding their perceived rule violations.” 

Despite this assertion, Matthewman continues on to examine Zea’s argument that he will suffer harm in the future in the form of lost referrals and potential customers if the defendants continue to flout their own rules. However, the magistrate judge says that this argument is not strong enough, writing that the plaintiff “has failed to present any evidence whatsoever to support his contention that he will suffer future loss of customers and good will.”

“Thus, even if he had timely filed his Motion, he has not established irreparable harm,” Matthewman added.

Due to this, Matthewman recommends that the court deny Zea’s motion for preliminary injunction. 

Zea now has 14 days to file a written objection to the magistrate judge’s recommendations.

NAR did not immediately return HousingWire’s request for comment on the magistrate judge’s recommendations.