Pocket Listing Lawsuit Renews Attack on ‘Clear Cooperation,’ Ineffective Agents

A pocket listing startup suing the National Association of REALTORS® (NAR) is seeking to push forward with its claims that the Clear Cooperation policy violates antitrust laws, asserting that its business model addresses a “superfluity of ineffective agents” in a case with potential impacts beyond the NAR settlement.

In a 17-page filing in a California federal court, lawyers for Top Agent Network (TAN)—a San Francisco-based pocket listing startup that first sued NAR (along with the San Francisco Association of REALTORS®) back in 2021—urged a judge to allow their case to move forward mostly based on a ruling in a parallel case, in which another alternative listing service (know as PLS.com) eventually settled claims with NAR-affiliated MLSs.

“Both TAN and The PLS.com allege that there is no plausible procompetitive justification for the (Clear Cooperation) Policy…both allege that the Policy has injured competition in the market for property listing services sold to real estate professionals, and that this injury has harmed TAN/PLS.com by restricting their supply of property listings and available customers” the filing reads.

While many of the ongoing class-action commission lawsuits have referenced Clear Cooperation as ancillary evidence of NAR’s alleged anti-competitive behavior, the pocket-listing suits represent a different threat in that they target that policy directly. Clear Cooperation, adopted by NAR in late 2019, requires that agents market listings on an NAR-affiliated MLS within one day of marketing them anywhere else.

TAN is seeking damages, as well as a court order banning the Clear Cooperation policy. None of the commission-case settlements so far have resulted in any changes to this policy—though Clear Cooperation is one of several rules targeted by the Department of Justice (DOJ) in its scrutiny of NAR and the real estate industry.

TAN and PLS.com argued that while NAR claimed Clear Cooperation was meant to protect consumers, preserve accurate listings and boost transparency, the intention was actually to stymie competitors in the listing service sector, who were seen as a threat to the mostly NAR-controlled MLS industry.

The exception of “office exclusives,” which allows brokers and agents to market properties within their own company without putting it on the MLS, is evidence that the policy was not actually to foster transparency in property listings, TAN claims.

Both pocket listing cases appeared to flounder at one point, as the TAN and PLS.com lawsuits were dismissed by federal judges in 2021. But last summer the Ninth Circuit Court of Appeals reversed those decisions—though notably, it did not delve into specifics in the TAN case, only saying that it was “sufficiently analogous” to PLS.com to merit reconsideration by the district court.

PLS.com ended up settling with the MLSs earlier this year, under terms that were not disclosed, although NAR—not part of that settlement agreement—was dropped from the suit without making any payment or rule changes.

TAN at one point also seemed on track for a settlement as well, but last month, the company cited the NAR agreement in the class-action commission cases, as well as a revived investigation into NAR by the DOJ as reasons to push forward toward a trial in late 2025.

Judge Vince Chhabria, who is overseeing the TAN case, wrote in his earlier order dismissing the claim that TAN’s business model is actually anti-competitive on its own merits and through its own arguments, adding that Clear Cooperation could be seen as a pro-competitive intervention, as NAR contends.

TAN restricts membership to agents who meet certain sales criteria, marketing the platform to consumers as a way to ensure they are working with productive, experienced agents.

TAN, in its latest filing, said that the judge’s dismissal  is “incompatible” with the Ninth Circuit ruling in the PLS.com case, and that it was inappropriate for him to dismiss TAN’s lawsuit before more evidence was gathered through discovery. The company also alleged it was not given any indication that its own membership requirements could disallow the company from suing NAR, and was therefore unprepared to argue that point before the initial dismissal.

Additionally, TAN disputed the assertion that its membership criteria had any inherent anticompetitive effects, attempting to flip that argument around and blame the traditional real estate industry for not establishing better qualifications for working as an agent.

“TAN imposes membership criteria because holding a real estate license is not an effective proxy for whether an individual meaningfully practices as a consumer-facing residential agent, and restricting membership to such agents improves the quality of the service TAN is able to market to paid members,” the company wrote.

NAR has acknowledged the problems caused by a “superfluity” of inexperienced or ineffective agents, according to TAN, even as it relies on them for membership dues. For its part, NAR has continued to contend that the MLS system is broadly pro-competitive, and that TAN has offered no proof that Clear Cooperation has anti-competitive effects.

The next hearing in the case is currently scheduled for July 18.

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