Northwest MLS took a hit on Wednesday when a federal judge denied the multiple listing service’s request to stop discovery in an antitrust lawsuit with Compass over who should control access to real estate listings.
An order signed by U.S. District Judge Jamal N. Whitehead on Wednesday denied NWMLS’s request to stay discovery while the court considers its motion to dismiss the case, according to documents filed in the U.S. District Court for the Western District of Washington in Seattle.
Now that discovery will be allowed to move forward, Compass will be able to sift through NWMLS’s internal documents and communications — a process that could be lengthy and costly.
Compass declined to comment on the latest legal filing for this story. The brokerage has alleged that NWMLS is in effect a “monopoly” with no meaningful competitors and that it’s “blocking consumer choice and broker competition, and forcing homesellers and their brokers to market their homes through NWMLS” in its decision to not allow office exclusives to be published in the MLS.
NWMLS declined to respond to Inman’s request for comment. The MLS has alleged in legal filings that the Compass lawsuit depends on the “false principle that NWMLS bears an obligation to deal with it on Compass’s preferred terms.”
Although NWMLS’s motion to dismiss the case is still being considered, the judge cited previous cases as precedent, in which discovery was allowed to continue even while a case was being considered for dismissal, so as not to delay litigation, among other considerations.
“While NWMLS’s motion to dismiss would be dispositive if successful, NWMLS has not argued that it is likely to succeed on the motion,” the order states. “And after taking a preliminary peek at the briefing and reviewing the complaint, the Court is not ‘convinced that the plaintiff[s] will be unable to state a claim for relief.'”
The order also notes that Compass’s discovery requests are “overly broad and unduly burdensome” and that it would consider something “more tailored.”
The lawsuit is one of two that Compass is currently engaged in related to the firm’s three-phase marketing strategy, which begins listings as Compass private exclusives before moving them to “coming soon” status, and ultimately marketing them publicly on the MLS.
The other legal battle the brokerage is engaged in is with portal giant Zillow in a squabble over the company’s new listing standards, which prohibit listings that have previously been privately marketed.
Update: This story was updated after publishing to reflect that NWMLS declined to comment for this story.
