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Update on the lawsuit filed by SDAR

posted Mar 7, 2016, 7:18 AM by Richard D'Ascoli   [ updated Mar 21, 2016, 10:12 AM ]

The following is an update on the lawsuit filed by SDAR (3/7/16)

For more background click here
Background
On January 14th, the San Diego Association of REALTORS® (“SDAR”) filed a lawsuit against the local MLS, SANDICOR, Inc., and the two other Associations in San Diego County, Pacific Southwest Association of REALTORS® (“PSAR”) and North San Diego County Association of REALTORS® (“NSDCAR”). 

PSAR and NSDCAR contend this lawsuit is frivolous and is an effort by SDAR to try to dominate and intimidate the other Associations so that SDAR can take over and/or subvert SANDICOR for SDAR’s financial benefit. 

PSAR and NSDCAR are united in their position that the brokers and not any one Association own their listing data, and have signed a joint defense agreement in order to use Association resources responsibly and defend against what they believe is a frivolous lawsuit by SDAR.  For additional background information and links to public information click here: http://www.psar.org/lawsuit

Update

On March 4th, PSAR and NSDCAR submitted a motion to dismiss with the United States District Court for the Southern District. A motion to dismiss is a preliminary legal attack against a complaint when that complaint fails to properly allege an injury was suffered, or fails to state a claim for relief, or includes other mistakes and deficiencies. While the motion to dismiss does not include all of the defenses and counter-claims that PSAR and NSDCAR will assert, it does point out SDAR’s deficiencies and asks for a dismissal of certain claims at the initial pleading stage. SANDICOR also filed a motion to dismiss.

Here are some key points in the PSAR/NSDCAR motion to dismiss:

1. SDAR sued on behalf of an entity that it does not own! SDAR has sued as the “Greater San Diego County Association of REALTORS®” which is an entity that is not even owned by them. In fact, “Greater San Diego County Association of REALTORS®” is a corporation wholly owned by NSDCAR, and NSDCAR has not given SDAR permission to sue. 

2. The fundamental issue of this lawsuit is whether SDAR can contort anti-trust laws to compel NSDCAR and PSAR’s members to put their individual property listings on SDAR’s for-profit Internet platform for the exclusive financial benefit of SDAR. Currently real estate professionals input listings into the local MLS (SANDICOR).  SANDICOR is owned by the three Associations.  SDAR wants the Court to force NSDCAR and PSAR’s agents and brokers to have that listing also appear on SDAR’s exclusive member website, Just Knock, for SDAR’s financial gain and not for the benefit of the brokers who own the listings and without their consent. The MLS was not intended for Associations to monetize broker listings. The Complaint alleges, and PSAR and NSDCAR deny, that NSDCAR and PSAR have improperly conspired to deny SDAR such purported “MLS data” for its exclusive website and that such actions have resulted in lost membership for SDAR.  The allegation that SDAR has suffered an antitrust injury, which allegation is denied, because it does not have current listings of NSDCAR and PSAR’s members is speculative and insufficient, especially where SDAR members themselves already have access and use of such listings for their real estate business through SANDICOR.  Even if SDAR could adequately allege (as opposed to “prove”, which we do not believe it will be able to do) that it was injured, that would not be enough.  Injury to SDAR alone does not create an antitrust injury because it does not affect competition as a whole – it only affects SDAR.

3. SDAR’s allegations are contradictory and fail to establish how SDAR suffered an Antitrust Injury. 

4. SDAR’s breach of contract allegations are deficient. Each Association has a Service Center Agreement with SANDICOR that permits it to provide MLS services to its members. These Agreements are bilateral with SANDICOR only and not the other Associations. SDAR has a Service Center Agreement with SANDICOR and PSAR and NSDCAR are not parties to that agreement. Therefore, SDAR’s allegation that PSAR and NSDCAR breached an agreement to which they are not a party is, by definition, deficient.

5. SDAR’s Complaint attacks and denigrates SANDICOR’s efforts to increase the Associations’ members’ access to MLS data by investigating a merger with the California Regional Multiple Listing Service (“CRMLS”). A potential merger with CRMLS would have provided access to statewide listings, likely created economies of scale for MLS fees, services, and technology, and would obviously have served to increase competition state-wide.  As the Complaint alleges, SDAR, as supermajority shareholder, has thwarted even investigating a potential merger. PSAR and NSDCAR support investigating a potential merger of SANDICOR with CRMLS to provide more data for members and believe that stance is pro-competitive, not anti-competitive. PSAR and NSDCAR are requesting that they be entitled to recovery of their attorney’s fees for having to point out SDAR’s deficiencies.

Motions to Dismiss


For more background and updates click here


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Richard D'Ascoli,
Mar 7, 2016, 2:28 PM
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Richard D'Ascoli,
Mar 7, 2016, 2:28 PM