DOJ Details Plans in Lawsuit Against Realtors

by admin

If the antitrust lawsuit filed by the U.S. Justice Department against the National Association of Realtors (NAR) proceeds to trial, the United States plans to call the Realtor association’s general counsel, ZipRealty’s CFO, the former president and CEO for eRealty, and the CEO for Home Buyers Marketing II among its witnesses, according to court documents.

The federal government has also identified 20 MLS areas from which it has requested or obtained detailed data and 16 additional MLS areas from which it has collected evidence or will draw evidence.

Lawyers representing the government and Realtor group met recently with a court mag- istrate for a routine conference in the antitrust lawsuit, which was filed in September 2005. The lawsuit, filed in U.S. District Court in Chicago, charges that the Realtor group approved overly restrictive policies for the online display and sharing of property infor- mation among real estate professionals, while the Realtor group has maintained that its policies are not illegal.

Laurie Janik, general counsel for the National Association of Realtors, said lawyers for the association expressed a worry about the possible number of depositions that the government may take to assist in building a case against the Realtor association. Depositions, which are recorded statements given under oath for use in court, can be time consuming and costly, said Janik, noting the government had announced plans for 10 depositions in one small market area. That
number has since been trimmed to three for that market area, she said. Janik suggested that there are numerous less costly methods for parties to gather information.

“They’re very expensive,” she said. “We’ve got to send an attorney there [and there is] travel time and attorney time during the deposition. If they were to do 10 depositions, I’d probably have an attorney out there for a week, which is unreasonable if we’re going to duplicate that in 36 market areas.”

Prior to announcing the lawsuit, the govern- ment took about 10 depositions, Janik said, “including mine and several members of our work group.” Lawyers for the NAR, meanwhile, took a deposition from a broker in Kansas prior to the government’s announced plan for more depositions in that state, Janik said. In a court filing, a U.S. Justice Department attorney stated that the government planned to call Janik as a witness if the case proceeds to trial.

Other witnesses that the government expects to call upon include: Gary Beasley, president and CFO of ZipRealty Inc.; Russell Capper, former president and CEO of eRealty, a com- pany that was acquired by Prudential Real Estate Services; and Steve Polston, CEO for Home Buyers Marketing II. Janik said the magistrate did provide some assurance that there would not be hundreds of depositions allowed for the case, though no specific limit was set.

Michael Erdman, a Chicago lawyer who has been monitoring the lawsuit, said in a posting at his Web site that the government has said it expects to conduct 45 to 50 depo- sitions, excluding experts. Also, Erdman stated that the government announced it “is aware of at least 48 brokers nationwide who have opted out” under a listings policy adopted by the Realtor group, and has plans to take depositions from a “significant number” of them.

According to the court documents filed by the Justice Department, Beasley of ZipRealty “is likely to testify about the services that ZipRealty offers, the market benefits that competition from ZipRealty offers, and the effects of NAR policies relating to VOWs.” It was the Realtor group’s approved Virtual Office Web site policy, or VOW policy, that triggered a two-year investigation preceding the lawsuit.

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