UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF SOUTH CAROLINA
UNITED STATES OF AMERICA,
Plaintiff,
v.
MULTIPLE LISTING SERVICE OF
HILTON HEAD ISLAND, INC.,
Defendant.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Civil Action No. 9:07-CV-3435-SB
Filed: 05/28/2008
|
FINAL JUDGMENT
WHEREAS, Plaintiff, United States of America, filed its Complaint
on October 17, 2007, and Plaintiff and Defendant, Multiple Listing Service
of Hilton Head Island, Inc., by their respective attorneys, have consented
to the entry of this Final Judgment (the "Final Judgment") without trial
or adjudication of any issue of fact or law, and this Final Judgment
shall not be evidence against or an admission by any party regarding
any issue of fact or law;
AND WHEREAS, Defendant is a multiple listing service among competing
real estate brokerages, organized as a not-for-profit corporation under
the laws of South Carolina, and maintains its principal place of business
in Hilton Head Island, South Carolina;
AND WHEREAS, Defendant agrees to be bound by the provisions of this
Final Judgment pending its approval by the Court;
AND WHEREAS, Defendant agrees to take certain actions for the purpose
of remedying the loss of competition alleged in the Complaint;
AND WHEREAS, Defendant has represented to the United States that the
actions required below can and will be made and that Defendant will
later raise no claim of hardship or difficulty as grounds for asking
the Court to modify any of the provisions contained below;
NOW THEREFORE, before any testimony is taken, without trial or adjudication
of any issue of fact or law, and upon consent of the parties, it is
ORDERED, ADJUDGED, AND DECREED:
I. JURISDICTION
This Court has jurisdiction over the subject matter of and each of
the parties to this action. The Complaint states a claim upon which
relief may be granted against Defendant under Section 1 of the Sherman
Act, as amended, 15 U.S.C. § 1.
II. DEFINITIONS
As used in this Final Judgment:
- "Defendant" means the Multiple Listing Service of Hilton Head Island,
Inc., its successors and assigns, and its members, officers, managers,
committees, and employees.
- "Affiliate Member" means any member of the Defendant that is engaged
in banking, mortgage lending, mortgage brokering, and similarly related
fields.
- "Associate Member" means: (1) a member of the Defendant who is an
'associated licensee' as the term is defined in S.C. Code Ann. §
40-57-30 (2005) or any recodification thereof; and (2) a Licensee
who associates with a Full Member or a Broker-in-Charge of a Full
Member.
- "Applicant" means a person who applies for full, associate, or affiliate
membership in the Multiple Listing Service of Hilton Head Island.
- "Appraiser" means any person who is licensed under Title 40 Chapter
60 of the South Carolina Revised Statutes or any future recodification
thereof and legally can perform real estate appraisal.
- "Appraisal Firm" means a firm owned by or employing an Appraiser.
- "Broker-in-Charge" means: (1) a "broker-in-charge" as the term is
defined in S.C. Code Ann. § 40-57-30 (2005) or any recodification
thereof; or (2) any licensed broker who is designated as having responsibility
over the actions of all its associated licensees and is affiliated
with a Full Member.
- "Buyer's Representation Agreement" means the contract between a
Licensee and Client or any other person who is a prospective
home buyer.
- "Client" means a person with whom a Licensee has established an
agency relationship.
- "Compensation" means: (1) any commission or fee charged by, or rebate
offered by, a Licensee to a Client or any person who is a prospective
home buyer or seller; (2) any commission or payment offered to other
Licensees in exchange for cooperation on a property transaction; or
(3) any commission, salary, or fee exchanged between a Full Member
and its affiliated or employed Licensees.
- "Full Member" means any member of the MLS that is a real estate
brokerage firm having a Broker-in-Charge or an Appraisal firm.
- "Licensee" means: (1) any person who is licensed under Title 40
Chapter 57 of the South Carolina Code Annotated or any future recodification
thereof; (2) any person who legally can perform acts of real estate
brokerage; or (3) any person who legally can perform acts of real
estate brokerage while acting under the supervision of a licensed
broker.
- "Listing Agreement" means the contract between a Licensee and Client
or any other person who is a prospective home seller.
- "Member MLS Database Access" means the security measures, such as
a login-id and password or key token, needed to access the complete
MLS database provided by Defendant to Full, Associate or Affiliate
Members. Member MLS Database Access does not mean or encompass any
login-id or password that a Full or Associate Member establishes for,
or grants to, its customers or clients either to access the broker's
website or to access listings content provided on the broker's website.
- "Method of Service" means the time, place, or manner in which a
Licensee provides brokerage services to Clients or any other person
who is a prospective home buyer or seller, subject to state and federal
law (e.g., office hours, the method by which the Licensee
markets properties for sale, and the method by which the Licensee
provides listings information to Clients or any other person who is
a prospective home buyer or seller).
- "MLS" means any multiple listing service owned or operated by Multiple
Listing Service of Hilton Head Island, Inc.
- "MLS Listing" means any listing in which:
- the Client or any other person who is a prospective home seller
grants the Licensee the sole right to make an offer of compensation
to cooperating brokers; and
- the Licensee makes an offer of compensation to other cooperating
Full or Associate Members.
- "MLS Service Area" means the geographic area from which listings
are placed in the MLS by Full or Associate Members.
- "Office Exclusive" means a listing in which the owner refuses to
grant permission for distribution of the listing to the MLS.
- "Real Estate Brokerage Firm" means a firm owned by or employing
a Broker-in-Charge.
- "Scope of Service" means the set of specific brokerage services
a Licensee has agreed it will provide to a Client or such other person
who is a prospective home buyer or seller as well as the set of specific
services that a Licensee will allow a Client or any other person who
is prospective home buyer or seller to perform herself or himself
(whether or not the licensee offers to provide such services). The
Scope of Service may be set forth in a Listing Agreement, Buyers Representation
Agreement, or other agreement between a Licensee and a Client or any
other person who is a prospective home buyer or seller.
- "Trustees" means the Trustees elected by the Full Members of Defendant.
III. APPLICABILITY
This Final Judgment applies to the Defendant and all other persons
in active concert or participation with it who receive actual notice
of this Final Judgment by personal service or otherwise.
IV. PROHIBITED CONDUCT
- Subject to the provisions of paragraph VI, Defendant is enjoined
and restrained from adopting or enforcing any bylaw, rule, regulation,
policy, or practice that has the purpose or effect of excluding:
- from full membership any Real Estate Brokerage Firm that has
a broker-in-charge holding an active real estate broker license
issued by the appropriate State of South Carolina governmental
licensing authority or any Appraisal Firm owned by or employing
at least one person with an active appraiser license issued by
the appropriate State of South Carolina governmental licensing
authority; or
- from associate membership any Licensee who holds an active
real estate broker, agent, or salesman license issued by the appropriate
State of South Carolina governmental licensing authority.
- Subject to the provisions of paragraph VI, Defendant is enjoined
and restrained from adopting or enforcing any bylaw, rule, regulation,
policy, or practice that has the purpose or effect of:
- failing to make available or furnish on like terms to any Full
Member any and all services that Defendant now or hereafter makes
available or furnishes to any of its Full Members;
- failing to make available or furnish on like terms to any Associate
Member any and all services that Defendant now or hereafter makes
available or furnishes to any of its Associate Members;
- failing to make available or furnish on like terms to any member
who is an Appraiser any and all services that Defendant now or
hereafter makes available or furnishes to any of its members who
are Appraisers;
- discriminating against, disfavoring, disciplining, or expelling
any Full or Associate Member based on its office location, corporate
structure, level or type of Compensation, Scope of Service, or
Method of Service;
- requiring any Full or Associate Member to perform brokerage
services in excess of those required by South Carolina law;
- prescribing the terms of Listing Agreements, Buyer's Representation
Agreements, or any other agreement between a Full or Associate
Member and any Client or any other person who is a prospective
home buyer or
seller;
- refusing to accept or place in the MLS any MLS Listing submitted
by a Full or Associate Member;
- prescribing, recommending, setting standards, or guidelines
concerning Compensation;
- requiring an Applicant or a Full Member to inform Defendant
of the ownership interests that others have in such Applicant
or Full Member or charging a fee for a change in ownership;
- requiring any Full or Associate Member, Appraiser or Trustee
to reside or have an office in the MLS Service Area or any particular
area or location; or
- changing its three classes of membership (Full, Associate,
and Affiliate) without the prior approval of the Department of
Justice.
V. REQUIRED CONDUCT
- Defendant is required to accept all Applicants into the Applicant's
corresponding membership class (Full, Associate, or Affiliate) as
follows:
- any Real Estate Brokerage Firm that has a Broker-in-Charge
who holds an active real estate broker license issued by the appropriate
State of South Carolina governmental licensing authority shall
be granted Full Membership;
- any Licensee who holds an active real estate broker, agent,
or salesman license issued by the appropriate State of South Carolina
governmental licensing authority shall be granted Associate Membership;
and
- any Appraisal Firm with an owner or employee holding an active
appraiser license issued by the appropriate State of South Carolina
governmental licensing authority shall be granted Full Membership.
- Defendant is ordered to delete from its Bylaws and Rules and suspend
enforcement of:
- The language in Bylaw Article II, Section II stating:
"Any realty or appraisal firm whose Broker in Charge or Head
Appraiser applies for membership and which is owned as a subsidiary
or affiliate of a realty firm which has its headquarters a state
other than South Carolina must comply with the following additional
regulations: . . . (2) it must have an office located within the
Multiple Listing Service area (Beaufort, Jasper, Allendale, Bamberg,
Barnwell, Colleton, Hampton and Orangeburg counties); (3) the
broker in charge or head appraiser of such realty or appraisal
firm must be a resident of the Multiple Listing Service area (Beaufort,
Jasper, Allendale, Bamberg, Barnwell, Colleton, Hampton and Orangeburg
counties); and (4) all licensees of the realty firm or appraisal
firm must hold their South Carolina license as their primary license."
- The language in Bylaw Article V, Section I stating:
"The Board of Trustees of MLS shall consist of persons who are
residents of the counties served by MLS, including Beaufort, Jasper,
Allendale, Bamberg, Barnwell, Colleton, Hampton and Orangeburg,
South Carolina,"
- The language in Bylaw Article VII, Section II stating:
- "and shall consist of the brokers-in charge or Head appraiser
of realty and appraisal firms who qualify for membership based
upon the following criteria: (a) the firm has established and
maintained a specific place of business in any of the following
counties served by MLS: Beaufort, Jasper, Allendale, Bamberg,
Barnwell, Colleton, Hampton and Orangeburg, which office
is available to the public during reasonable business hours;"
and
- "Membership of internet only members are subject to restrictions
set by the Board of Trustees."
- The language in Bylaw Article VII, Section III stating:
"which: (a) have established and maintained a specific place
of business within the Multiple Listing Service Area (which includes
Beaufort, Jasper, Allendale, Bamberg, Barnwell, Colleton, Hampton
and Orangeburg counties) that is available to the public during
reasonable business hours;"
- The language in Bylaw Article VII, Section IV stating:
- "to obtain or make credit checks or"; and
- "and applications may require that the applicant supply various
information and recommendations, including but not limited to:
- Three (3) separate character references from three (3)
presently qualified Full Members; and
- In the case of Full Members, a history of business experience
and employment information concerning all persons, including
all partners and shareholders, who have any ownership interest
in the applicant ...Any such party acquiring an ownership
interest of any kind after acceptance of the realty firm
as a Full Member must submit all information required by
this Section within ten (10) days after acquisition of the
ownership interest and must be approved by the Board of
Trustees."
- The Bylaw Article VII, Section X stating:
"In the event of any change of ownership of a member firm as
determined by the Board of Trustees in accordance with the provisions
of the Rules and Regulations, the Board of Trustees, at its option,
may terminate the membership of such firm and require the firm
to reapply for membership and pay the then current initiations
fees in MLS as if said firm had never been a member of MLS."
- The language in Bylaw Article XI, Section I stating:
"The listing Full Member shall specify a commission split or
other compensation which would be reasonably expected to encourage
cooperation by other Full Members. It is to the advantage of the
listing Full Member, and, consequently the owner, to establish
compensation which will encourage other MLS Full Members to devote
time and energy to the sale of the owner's listing with the expectation
of reasonable compensation for the member's efforts. The Board
of Trustees may adopt compensation guidelines that it deems sufficient
to encourage such devotion of time and energy. Any Full Member
which the Board of Trustees, in its sole discretion, believes
is consistently establishing compensation which would discourage
the intended cooperation by other Full Members may have its membership
terminated by a majority vote of the Board of Trustees."
- The language in Rules and Regulations Section II, stating:
- "A.1.c. Establish and maintain a specific place of business
in Beaufort, Jasper, Allendale, Bamberg, Barnwell, Colleton,
Hampton, Orangeburg Counties, which is available to the public.";
- "A.2.c. Submit letters of recommendation from the Broker-In-Charge/Head
Appraiser of three (3) firms who are members in good standing
with the MLS of Hilton Head Island, Inc.";
- "A.2.g. Submit statement of Residence of Owners and Broker-In-Charge/Head
Appraiser";
- "A.2.h. . . . (2) address of the New Firm's office located
within the Multiple Listing Service area (Beaufort, Jasper,
Allendale, Bamberg, Barnwell, Colleton, Hampton, [and] Orangeburg
Counties); (3) the address of the Broker-In-Charge/Head Appraiser
to confirm that he/she is a resident of the Multiple Listing
Service area; and (4) confirmation that all licensees of the
New Firm hold their South Carolina licenses as their primary
license and are residences of the aforementioned area"; and
- "B. Board of Trustees must be notified of any ownership changes
within 10 days of said change and all changes of ownership fees
paid. Notification must be in writing and signed by the BIC/Head
Appraiser. A new Membership Agreement and Principals Audit must
be fully executed and signed by the BIC/Head Appraiser and submitted
to the MLS office along with notification. (Forms may be obtained
on the MLS website www.hiltonheadmls.com and selecting Members
Only.)"
- The language in Rules and Regulations Section II, Subsection
E referring to principals.
- The language in Rules and Regulations Section VI, Subsection
2 stating:
"Only MLS Exclusive Right to Sell Listing Agreements are accepted."
- Defendant is ordered to delete the term "Exclusive Agency" in Rules
and Regulations Section VI, Subsection 7 and replace it with "Office
Exclusive."
VI. PERMITTED CONDUCT
Notwithstanding the above, nothing shall prohibit Defendant from:
- Requiring Applicants or Full, Associate, or Affiliate Members to
pay:
- a fee equal to the reasonable set-up costs of preparing to make
Defendant's services available to the Applicant, Full, Associate,
or Affiliate Member;
- a reasonable security deposit, to secure against any unpaid claims
or charges that may be asserted by Defendant against the Applicant,
Full, Associate, or Affiliate Member; and
- fees for use of Defendant's services that are non-discriminatory
and reflect the reasonable expenses of Defendant's operations.
- Adopting or enforcing any bylaw, rule, regulation, policy practice,
or agreement that is required for the MLS not to violate South Carolina
law.
- Publishing or making available illustrative Listing Agreements,
Buyer's Representation Agreements, and any other written agreements,
or contracts that
Full or Associate Members may choose to use or modify, provided any
such agreements leave blank the Compensation terms.
- Adopting or enforcing any bylaw, rule, regulation, policy, practice,
or agreement that prohibits Full, Associate, or Affiliate Members
from enabling a third party to make use of its Member MLS Database
Access.
- Requiring a Full Member to notify the MLS of a change in or departure
of its Broker-in-Charge, or the departure of any Associate Member.
- Requiring a Full Member to provide the MLS with the name of a designated
contact person to whom the MLS may direct correspondence and inquiries.
VII. COMPLIANCE AND INSPECTION
- Within sixty (60) days after the date of entry of this Final Judgment,
Defendant shall: (1) provide each of its members, trustees, and employees
with notice of the amendments to its bylaws, rules, regulations and
policies to conform to the provisions of this Order; (2) provide each
of its members, trustees, and employees with a copy of this Order
via its member-only Internet page; (3) inform all persons who are
known to have inquired about membership in the last two years but
who are not members of the amendments to its bylaws, rules, regulations
and policies to conform to the provisions of this Order; (4) inform
all persons under subsection (3) that they may apply or reapply for
membership and that Defendant will grant membership if the applicant
meets the requirements of the bylaws, rules, regulations and policies
as revised by this Order; and (5) place on its home
page
of its publicly accessible web site (currently www.hiltonheadmls.com)
a notice of the Final Judgment with a link to the Final Judgment.
- For the purposes of determining or securing compliance with this
Final Judgment, or of determining whether the Final Judgment should
be modified or vacated, and subject to any legally recognized privilege,
from time to time duly authorized representatives of the United States
Department of Justice, including consultants and other persons retained
by the United States, shall, upon written request of a duly authorized
representative of the Assistant Attorney General in charge of the
Antitrust Division, and on reasonable notice to Defendant, be permitted:
- access during Defendant's office hours to inspect and copy,
or at Plaintiff's option, to require Defendant to provide copies
of, all books, ledgers, accounts, records and documents in the
Defendant's possession, custody, or control, relating to any matters
contained in this Final Judgment; and
- to interview, either informally or on the record, Defendant's
trustees, officers, employees, or agents, who may have their individual
counsel present, regarding such matters. The interviews shall
be subject to the reasonable convenience of the interviewee and
without restraint or interference by Defendant.
- Upon the written request of a duly authorized representative of
the Assistant Attorney General in charge of the Antitrust Division,
for the purposes of determining or securing compliance with this Final
Judgment, or of determining whether the Final Judgment should be modified
or vacated, and subject to any legally recognized privilege, Defendant
shall submit written reports or interrogatory responses, under oath
if requested, relating to any of the matters contained in this Final
Judgment as may be requested.
- No information or documents obtained by the means provided in this
section shall be divulged by the United States to any person other
than an authorized representative of the executive branch of the United
States, except in the course of legal proceedings to which the United
States is a party (including grand jury proceedings), or for the purpose
of securing compliance with this Final Judgment, or as otherwise required
by law.
VIII. RETENTION OF JURISDICTION
This Court retains jurisdiction to enable any party to this Final
Judgment to apply to this Court at any time for further orders and directions
as may be necessary or appropriate to carry out or construe this Final
Judgment, to modify any of its provisions, to extend the duration of
the Final Judgment, to enforce compliance, and to punish violations
of its provisions.
IX. EXPIRATION OF FINAL JUDGMENT
This Final Judgment will expire ten (10) years from the date of its
entry.
X. NOTICE
For purposes of this Final Judgment, any notice or other communication
shall be given to the person at the address set forth below (or such
other addresses as the recipient may specify in writing):
John R. Read, Chief
Litigation III Section
U.S. Department of Justice
Antitrust Division
325 Seventh Street, N.W., Suite 300
Washington, D.C. 20530
XI. PUBLIC INTEREST DETERMINATION
Entry of this Final Judgment is in the public interest.
Date: May 28, 2008 |
Court approval subject to procedures
of Antitrust Procedures and Penalties
Act, 15 U.S.C. § 16 |
|
_______________/s/________________
UNITED STATES DISTRICT JUDGE |
|