Real estate agent sues Hilton Head MLS in federal court, seeks class-action status

July 16, 2009 

A Beaufort County real estate agent is suing the Multiple Listing Service of Hilton Head Island in federal court, accusing it of unlawfully restraining competition among brokers to the detriment of consumers.

Roger L. Abney of the Roger Abney Co. alleges in the suit that the MLS excluded brokers who would charge consumers lower fees.

The suit requests class-action status and a jury trial. It was filed last week in the Beaufort Division of the U.S. District Court and also lists several unnamed defendants as "John Does 1-8."

"Taken together, MLS rules limit competition among brokers, thus artificially inflating and stabilizing the price of real-estate brokerage service and deterring innovation and the emergence of new brokerage business models," the suit states.

Hilton Head MLS CEO Yvette Acuff released a statement in response to questions Thursday that read in part: "MLS intends to defend these civil claims and to ask the public jury to rule that MLS practices intended to benefit and protect local real estate purchasers and sellers did not harm them."

A multiple listing service combines the property listings of member brokers into a shared database. The public has limited access to the MLS to search properties for sale. The Hilton Head MLS is a nonprofit organization that has about 1,400 members in Beaufort, Jasper, Allendale, Bamberg, Barnwell, Colleton, Hampton and Orangeburg counties.

The suit lists several types of brokers it says "don't exist in the MLS Service Area" because of the MLS' actions. In other markets, some brokers use technology to avoid office expenses and pass savings onto customers, the suit states. Others work for flat fees or lower sales commissions than traditional brokers.

Consumers in the Hilton Head area "had fewer choices among types of brokers and paid higher fees for those services than customers in other areas of the country," the suit states.

Multiple listing services, including Hilton Head's, have come under similar scrutiny before.

The Hilton Head MLS agreed in 2007 to change its policies to let in a wider variety of members after the Antitrust Division of the U.S. Department of Justice started an investigation. At the time, local Realtors and MLS management said discount brokers were in the market, individual brokers' commissions were negotiable and there were enough Realtors in the market to foster competition.

Under the agreement, the Hilton Head MLS eliminated bylaws requiring members to have an office in the service area and that its trustees come from those areas. Also cut were provisions that could restrict Internet-only members and bylaws requiring all membership applicants to undergo a credit check and obtain character references from three current members.

The department settled similar complaints with the Columbia MLS and the National Association of Realtors.

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