San Diego Business Journal

Judge Rejects Realtor Groups' Motion to Dismiss Part of Lawsuit

By Sarah de Crescenzo Friday, December 23, 2016
   

A federal judge has denied a motion by two San Diego-based real estate trade associations to dismiss a portion of an antitrust lawsuit filed against them by a third local real estate group.

Nearly a year ago, the Greater San Diego Association of Realtors sued the North San Diego County Association of Realtors and the Pacific Southwest Association of Realtors, alleging the groups were conspiring to limit its competitive advantage by restricting access to Sandicor Inc., the multiple listing service the groups jointly own.

The two groups being sued filed a motion to dismiss part of the lawsuit, but that request was denied this month by U.S. Southern District of California Judge Michael Anello.

"We are glad to see the court recognizes the merits of all of our claims," said Cory Shepard, president of the Greater San Diego association, or SDAR.

Anthony Andaya, president of the Pacific Southwest association, said the continuation of the lawsuit will “only devalue the Realtor brand and what we do in the eye of clients we serve.”

He called the infighting between Realtor groups “disheartening.”

SDAR, which has more than 13,000 members, seeks changes in Sandicor's governance structure and at least $1.5 million in compensatory damages.

Together, the North San Diego County and Pacific Southwest associations have nearly 7,000 members. According to the lawsuit, the groups attempted to merge in 2011 but the North San Diego County group’s membership didn’t approve, so the proposal fell through.

The Greater San Diego association alleges the groups have worked together since then to poach its members and otherwise collude against it.

In September, the North San Diego County and Pacific Southwest associations announced an agreement to give their members access to services, resources and discounts offered by either association.

Weeks later, the associations announced they had agreed to share a CEO, and Richard D’Ascoli, CEO of the Pacific Southwest association, took over for Dianne McMillan, the retiring head of the North San Diego County association. The organizations said the associations would continue to operate as two distinct organizations under the oversight of separate boards of directors.

In October, the two groups being sued filed a complaint in San Diego Superior Court asking for the dissolution of Sandicor. At the time, Andaya said the associations would instead provide their members with access to California Regional Multiple Listing Service Inc., with which Sandicor had discussed merging in late 2014 over SDAR’s objections.

Art Carter, CEO of the California Regional MLS, recently wrote an open letter to Realtors in San Diego urging them to support the acquisition of the San Diego-based MLS by his statewide group, saying local brokers would benefit by belonging to a more experienced organization.

SDAR’s Shepard, however, said he hoped the judge’s decision to allow the January petition to proceed would prompt the North San Diego and Pacific Southwest associations to reconsider their request for Sandicor’s dissolution, which they have said was filed in response to SDAR’s initial lawsuit.