The opinion
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA
TOP AGENT NETWORK, INC., Case No. 20-cv-03198-VC
Plaintiff,
ORDER GRANTING MOTION FOR
v. RECONSIDERATION
NATIONAL ASSOCIATION OF Re: Dkt. No. 113
REALTORS, et al.,
Defendants.
Top Agent Network’s motion for reconsideration is granted. This order assumes the
reader’s familiarity with the facts and procedural history, the applicable legal standards, and the
arguments made by the parties.
Two points from The PLS.com, LLC v. National Association of Realtors compel
reconsideration. First, PLS.com emphasized that “whether the alleged procompetitive benefits of
the Clear Cooperation Policy outweigh its alleged anticompetitive effects is a factual question
that the district court cannot resolve on the pleadings.” 32 F.4th 824, 839 (9th Cir. 2022).
Second, and more importantly, PLS.com held that the relevant market is not the market for real
estate, in which people buy and sell homes, but the market for real estate listing services, in
which real estate agents subscribe to listing platforms and post listings to those platforms. That’s
the market in which the National Association of Realtors and its affiliate associations and MLSs
compete with other listing service providers like Top Agent Network. Id. at 832–33, 839.
Top Agent Network has adequately alleged that the Policy constitutes a per se group
boycott in violation of the Sherman Act. In considering whether the plaintiff in PLS.com had
done so, the Ninth Circuit noted that “PLS's competitors coerced its suppliers (sellers’ agents)
not to supply PLS with listings (or to do so only on highly unfavorable terms), and they did so
for the express purpose of preventing PLS, a new entrant to the market after decades of little to
no competition, from competing with the MLSs. . . . PLS also alleges that the effort succeeded.”
Id. at 834-35. Substituting “Top Agent Network” for “PLS,” the same is true here.
Top Agent Network has also adequately alleged antitrust injury. Its asserted injury stems
from the Policy’s allegedly anticompetitive effects on the market for real estate listing services:
by forcing Top Agent Network and other listing services to compete with the MLSs for listings
on unfavorable terms, the Policy prevents Top Agent Network from “gaining a foothold in the
market and makes it virtually impossible for new competitors to enter, leaving agents with fewer
choices, supra-competitive prices, and lower quality products.” Id. at 840.
The dismissal order held otherwise based on the view that the Policy, as applied to Top
Agent Network’s exclusive listing service, actually increased competition. But that was looking
to effects on the ultimate real estate market, not on the upstream market for real estate listing
services. Looking to that upstream market, the complaint adequately alleges that Top Agent
Network’s injury flows from the Policy’s anticompetitive effects: The Policy harms competition
by impeding agents’ ability to choose to post listings to Top Agent Network’s listing service, and
this in turn harms Top Agent Network by restricting its supply of listings. And the Policy does
not have countervailing procompetitive effects on this market: while many—indeed most—
agents cannot join Top Agent Network, the Policy does not increase those agents’ choice of
listing services. Moreover, as PLS.com noted, it would be inappropriate at this stage in the case
to compare the Policy’s anticompetitive and procompetitive effects. See id. at 839.
Nor can the dismissal order be sustained on the basis that Top Agent Network’s own
potentially anticompetitive conduct prevents it from establishing antitrust standing. A “plaintiff’s
illegal conduct cannot be raised as a complete bar to his antitrust action.” First Beverages, Inc. of
Las Vegas v. Royal Crown Cola Co., 612 F.2d 1164, 1174 (9th Cir. 1980).
As counsel for Top Agent Network agreed at the hearing and in the motion, this is not to
say that the plausibly anticompetitive nature of Top Agent Network’s business model will
necessarily be irrelevant at later stages in the case. Although Top Agent Network has adequately
alleged a per se group boycott in its complaint, it remains to be seen whether a per se or rule of
reason analysis should apply at later stages of this litigation. See PLS.com, 32 F.4th at 837. It
may be that the National Association of Realtors can eventually justify the Policy (at least as
applied to exclusive listing services) with “plausible arguments that [it was] intended to enhance
overall efficiency and make markets more competitive,” in which case the rule of reason could
apply. Id. at 835. And if that happens, then under the rule of reason—which “requires courts to
conduct a fact-specific assessment of market power and market structure” to “assess the
restraint’s actual effect on competition”—it may be that the Policy’s net effect 1s procompetitive,
not anticompetitive. /d. at 834 (quoting Ohio v. American Express Co., 585 U.S. 529, 541
(2018)).
Because Top Agent Network has adequately alleged that the Policy is a group boycott in
violation of the Sherman Act—and that it has been injured by that injury to competition—the
motion for reconsideration is granted and Top Agent Network’s Sherman Act claim can proceed.
Because plaintiffs bringing claims under the Cartwright Act must meet the same antitrust injury
requirement as under the Sherman Act, Top Agent Network’s Cartwright Act claim can also
proceed. And because Top Agent Network has stated claims for violation of the Sherman Act
and Cartwright Act, its UCL claim can also proceed. The dismissal of Top Agent Network’s
intentional interference with contractual relations claim, however, is unaffected by this order’s
analysis.
Discovery may proceed immediately. A case management conference is scheduled for
August 30, 2024 at 10:00 a.m., with a joint case management statement due August 23.
IT IS SO ORDERED.
Dated: July 22, 2024 Koo.
VINCE CHHABRIA
United States District Judge