NAR and Florida MLS groups dismissed from Zea lawsuit

The National Association of Realtors (NAR) has notched another favorable legal outcome.

On Monday, Florida-based U.S. District Court Judge William Dimitrouleas dismissed NAR, as well as 11 Florida associations/MLSs from the lawsuit on the recommendation of Magistrate Judge William Matthewman.

In early March, Judge Dimitrouleas adopted another report by the magistrate judge dismissing Connecticut Association of Realtors (CT Realtors) and Connecticut-based Smart MLS, as well as Arizona-based West and Southeast Realtors of the Valley (WeSERV) from the lawsuit. 

The parties have been dismissed from the suit without prejudice meaning that the plaintiff Jorge Zea could refile his lawsuit. This ruling comes after Zea failed to file any objections to Magistrate Judge Matthewman’s report, which was filed in late March. 

The associations dismissed from the lawsuit are: Beaches MLS; Broward, Palm Beaches & St. Lucie Realtors; Miami Realtors; Orlando Regional Realtor Association; Florida Gulf Coast MLS; Stellar MLS; Space Coast MLS and Space Coast Association of Realtors; RealMLS; Northeast Florida Association of Realtors and Central Panhandle Association of Realtors.

Lawsuit claims a coordinate scheme

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 nonexistent buyer’s agent commission. In his complaint, he argues that this steering is the result of the 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 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.

In his report, Magistrate Judge Matthewman called the complaint “deficiently pled” and recommended it be dismissed. Additionally, the judge highlighted several instances of the cases cited by Zea in his filings not existing and being the result of AI hallucinated law. Due to this, the magistrate judge recommended that the court admonish Zea for this. In his ruling Judge Dimitrouleas adopted this recommendation and admonished the plaintiff  “over his improper use of artificial intelligence and concomitant misrepresentations to the Court.” 

If Zea continues this behavior, the judge wrote that “severe sanctions may be imposed” against him.

In an emailed statement, an NAR spokesperson wrote that the trade organization is pleased with the court’s decision. 

“As we have previously stated, the National Association of Realtors fosters a fair, transparent, and competitive real estate marketplace,” the spokesperson wrote. “Steering is a prohibited practice under NAR policy and the Realtor Code of Ethics. The Code of Ethics is enforced by state and local Realtor associations, and the enforcement of MLS rules are handled by each MLS.”

This ruling comes just days after NAR announced that it has settled the homebuyer commission lawsuit claims by opting into the Tuccori lawsuit settlement.