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Brawl Over Access to San Diego MLS Listings

SAN DIEGO (CN) - Two members of a San Diego regional multiple listing service are preventing the third member from access to real estate listings, the Greater San Diego County Association of Realtors claims in a federal antitrust complaint.

Defendants Pacific Southwest Association of Realtors and North San Diego County Association of Realtors control the six-member board to the multiple listing service, the plaintiff (Greater Association) claims in the Jan. 13 complaint.

The three parties are the sole shareholders of lead defendant Sandicor, the Greater Association says. It claims it is the "supermajority" owner of Sandicor, with more than two-thirds of the shares, but the Pacific Southwest and North San Diego associations control the board, though they own, respectively, only 10 percent and 22 percent of the shares.

The Greater Association claims the defendants have cut off access "in its entirety" to San Diego's MLS, interfering with its ability to compete in the real estate market.

Multi-listing services are key tools for real estate companies.

"They have used this position of power to wield Sandicor as an anticompetitive weapon, milked its resources for their own enrichment, and frustrated its purpose, all while actively preventing plaintiff from participating in corporate decisions," the complaint states.

When the Greater Association contracted with a third-party company called Point 2 to gain access to a syndicated MLS data feed, Sandicor CEO Ray Ewing wrote to the company and told it to block access, the Greater Association says.

"Please understand that from our view, SDAR [San Diego County Association of Realtors] is not entitled to data from us ... unless our BoD [board of directors] authorizes it," Ewing wrote in a Feb. 13, 2015 communication to Point 2, according to the lawsuit.

The Greater Association says there are "no reasonable alternative sources of the data" other than MLS - a "fundamental prerequisite to effective competition in real-estate markets in the digital era."

"Indeed, the only alternative sources of the San Diego County current and historical listing data are third party syndicators," the complaint states.

The Greater Association says it would like to challenge Ewing's appointment as CEO but that his employment contract is renewed automatically "absent a vote and notification of the Sandicor board of directors before the end of each one year term."

The Greater Association "acting as the supermajority shareholder, has opposed renewal of Ray Ewing's contract, but has been unable to be heard by the current board," the complaint states.

Ewing is not a party to the lawsuit.

The Greater Association says the board's actions have "significantly devalued Sandicor's assets and given rise to other waste," and the board has breached "its contractual duties to plaintiff by unjusti?ably refusing to provide plaintiff access to its own data."

Ewing said in a telephone interview Friday that he had not seen the complaint.

Asked about the Greater Association's opposition to his position as CEO, he said the board of directors handles the day-to-day operations of Sandicor, not shareholders.

"I don't know what it is they've objected to," Ewing said.

Ewing said the Greater Association has given up its rights to use MLS.

"They're one of our owners. When we formed Sandicor they used to be in MLS. They gave up their rights to be in MLS. Our basic core value is that the listings belong to the brokers. So we facilitate where it goes but we don't make that choice for the broker," Ewing said.

He said each association typically has up to two board members with a cap of four members based on the number of members in each association.

The Pacific Southwest Association is represented on the board by Chairman Aaron Kerper and director Shun Wakita. Directors Ron Brownell and Ron Romanowich are directors for North San Diego. Board members Saul Klein and Glen Brush represent the plaintiff on the board.

The Greater Association seeks an injunction and at least $1.5 in damages for antitrust violations, breach of fiduciary duty, waste of corporate assets, unfair competition, breach of contract and other charges.

It is represented by Alexis Gutierrez with Higgs Fletcher & Mack.

The size of the lucrative San Diego County real estate market is difficult to estimate.

In San Diego itself, the median home or condo value was $444,200 in 2013, according to City-data.com.

Zillow reported on Tuesday morning that there were 49,112 "recent" real estate closings in San Diego.

Multiplying the two figures gives a total of $21.8 billion.

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