Board of Realtors sued over listing service

Three Spokane real estate agents have filed a lawsuit against the Spokane Board of Realtors, claiming they’ve been wrongly forced to join that group to use a countywide listing service.

The suit names the Spokane Board of Realtors and its 12 directors. The board and its affiliate, the Spokane Association of Realtors, represent about 1,400 current real estate agents, including the three who filed the suit Friday in U.S. District Court in Spokane.

The three, Mathew Prencipe, William Koshman and Robert Cooke, say the association charges them $335 a year in fees, plus $45 a month, to access the multiple listing service, or MLS, which collects information on homes for sale areawide.

“I’m forced to join a group that’s very political and does other things I don’t agree with, just to use that service,” said Koshman after the suit was filed.

The suit said other Realtor associations elsewhere don’t require membership to use the MLS service. For instance, in Tacoma and Seattle local companies own and manage the MLS databases for those areas and charge for the service, but don’t tie use to membership in a Realtors’ group.

Koshman, who became a Realtor more than 15 years ago, said he’s still paying the yearly membership dues of $335.

“It’s an unfair monopoly. We find this very similar to being forced to join a union to hold a job,” he said.

More than 90 percent of all homes sold in the Spokane area are listed in the local MLS operated by the Spokane Realtors Association, said David Barry, a San Francisco antitrust lawyer who prepared the suit and filed it Friday and has filed similar actions elsewhere.

Tying the use of that sales tool to membership has been struck down by courts in Colorado, California and New Jersey, he said. Those cases have become widely known, he said. But groups like the Spokane Realtors’ Association haven’t changed their practices because they felt no legal threat to do so, Barry contends.

For that reason, Barry has filed the suit as a potential class action, seeking damages for up to 8,000 real estate agents who have joined the Spokane real estate association in the past four years. Four years is the federal statute of limitations for this kind of claim, he noted.

If approved as a class action, Barry said he’s prepared to seek more than $8 million in damages from the Realtors group here. That figure is based on each plaintiff recovering past fees, then tripling that amount based on federal laws regarding antitrust violations.

Vic Plese, one of the 12 Spokane Board of Realtors directors named in the suit, said Spokane’s association has followed its current practice of requiring membership as a condition of using the MLS since the late 1960s.

In addition to using the MLS, the annual membership fee allows members to attend training sessions and learn about sales strategies. It also pays for lobbying efforts by the organization on behalf of its members. The $335 fee includes memberships not just to the local group, but also to the state and national Realtors associations.

Plese said the local membership requirement is legal and provides consumer protections against unscrupulous real estate agents who could gain access to the listing database.

Even though the state has regulations covering Realtors, Plese said the Spokane association applies more stringent standards than Washington’s law provides. “To enter the Spokane MLS, our members must subscribe to our very specific code of ethics. This is a way for us to protect the consumer,” Plese said.

Plese also said more Realtors groups use the approach his group takes than the model followed in Tacoma and Seattle. In those two areas, real estate agents simply pay about $37 per month to use the local MLS. In both instances, real estate agents can use the Pierce or King County MLS services without first joining a Realtors’ group, said Jeff Coop, legal affairs manger for Northwest MLS, the largest multiple listing service provider in the state, which covers most of the Puget Sound area. Northwest MLS provides the database to about 19,000 subscribing real estate agents, said Coop. All that’s needed, he added, is proof that agents hold a valid state Realtor’s license.

Coop said the model followed in King County has nothing to do with federal law. “We’ve been doing it that way for a long time,” he said, adding that in most large cities, real estate agents created MLS listings well before forming Realtor’s associations.

Patrick Cerutti, an attorney representing the Spokane Board of Realtors, declined comment on the suit except to say that he plans to take vigorous steps to counter the suit’s tactic of naming individual board members for liability.

Barry, the plaintiff’s attorney, said that approach is a key part of the lawsuit. He said the goal is also to seek eventual liability against any Spokane law firm that provided legal advice to the board. “Every (Spokane) law firm they used for the past 30 years is on the hook for this really lousy legal advice they gave the board,” Barry said.