Pomanowski v. Monmouth County Bd. of Realtors

• Decision Date: 19 July 1977
• Parties: , 1977-2 Trade Cases P 61,609 Wayne C. POMANOWSKI, Plaintiff, v. MONMOUTH COUNTY BOARD OF REALTORS, a New Jersey Corporation, Monmouth CountyMultiple Listing Service, New Jersey Association of Realtors, NationalAssociation of Realtors, William G. Kircher and Charles Darrah, Defendants.
• Court: New Jersey Superior Court

Page 100

152 N.J.Super. 100

377 A.2d 791, 1977-2 Trade Cases P 61,609

Wayne C. POMANOWSKI, Plaintiff, v. MONMOUTH COUNTY BOARD OF REALTORS, a New Jersey Corporation,

Monmouth CountyMultiple Listing Service, New Jersey

Association of Realtors, NationalAssociation of Realtors,

William G. Kircher and Charles Darrah, Defendants.

Superior Court of New Jersey, Chancery Division.

July 19, 1977.

Paul V. Strawinski, Montvale, for plaintiff (Organ & Strawinski, Montvale, attorneys).

Arthur M. Greenbaum, Woodbridge, for defendants N. J. Ass'n of Realtors and Nat. Ass'n of Realtors (Greenbaum, Greenbaum, Rowe & Smith, Woodbridge, attorneys).

C. Keith Henderson, Asbury Park, for defendants Monmouth County Bd. of Realtors, Monmouth County Multiple Listing Service, William G. Kircher and Charles Darrah (Lautman, Rapson & Henderson, Asbury Park, attorneys).

YACCARINO, J. S. C.

The issue presented to the court by the facts of this case is one which has not been the subject of a reported decision in this jurisdiction but one which has far-reaching effects upon the real estate industry in this State as well as nationally. Simply stated, the issue before the court is whether membership in a county board of realtors even where open to all licensed real estate brokers and salesmen may be deemed a condition precedent to participation in the board's multiple listing service without offending the New Jersey Antitrust Act, N.J.S.A. 56:9-1 et seq. As all of the named defendants ¹ have moved for summary judgment and the court finds that no genuine issue of material fact exists, the action is one which may be tried on the pleadings and affidavits submitted and final judgment rendered thereon pursuant to R. 4:67-5.

The facts of the case may be stated as follows. In contrast to the usual factual context where a plaintiff has been excluded from membership in the county board of realtors, plaintiff Wayne C. Pomanowski, a real estate broker licensed by the State of New Jersey, trading as the Thompson Agency, was a member of defendant Monmouth County Board of Realtors from about July 1972 until March 31, 1977. Plaintiff's termination of membership was voluntary and he has stated by way of affidavit that such decision was motivated by his disagreement with the philosophy and conduct of the county, state and national organizations. This divergence of viewpoints obviously did not extend to the county board's multiple listing service.

But for the payment of dues and licensing by the State, there are no criteria for membership in the Monmouth County Board of Realtors. For the year 1977 the Thompson Agency was required to pay dues in the sum of $250: $170 for an active member (plaintiff) and $80 for two realtor-associates. Interestingly, the dues assessment is comprised of a membership fee for the county board and the state and national associations. No one may choose to restrict membership to only the local organization.

To become a member of the Monmouth County Multiple Listing Service one need only be an active member in good standing of the Monmouth County Board of Realtors, comply with the rules and regulation of the multiple listing service which provides, among other things, for the division of commissions and specific service charges, and pay an initiation fee in the sum of $500. As in plaintiff's case, failure to pay dues to the county board (and, of course, to the state and national associations) automatically terminates eligibility to participate in the multiple listing service. It is important to note, however, that the rules and regulations of the multiple listing service provide that the initiation fee "shall approximate the actual costs of bringing the service to the participant." Also noteworthy is the fact that not all multiple listing services require membership in the county or other realtor organization. Plaintiff has submitted to the court a survey, the accuracy of which was conceded at oral argument, of 35 multiple listing services in this State. Eight services are open to realtor members and nonmembers alike.

In sum, the plaintiff in this case is not one who has been excluded from membership in the organization which furnishes the multiple listing service. Plaintiff's allegation that the nexus between the county board of realtors and the multiple listing service, that is, the essentially nondiscriminatory exclusion of nonmembers from participation in the service, constitutes an unlawful restraint of trade rests solely upon plaintiff's decision to discontinue funding of the realtor organizations.

None of the defendants in this case has challenged the applicability of the antitrust laws to the multiple listing service on the grounds of lack of economic necessity to plaintiff or its insubstantial effect on the relevant real estate market. Both issues find ready answer. As to the former, the advantages of participation in a multiple listing service are common knowledge and have been clearly delineated by case law. E. g., Oates v. Eastern Bergen Cty. Multiple Listing Service, 113 N.J.Super. 371, 381-82, 273 A.2d 795 (Ch.Div.1971); Grillo v. Board of Realtors of Plainfield Area, 91 N.J.Super. 202, 218-19, 219 A.2d 635 (Ch.Div.1966). As to the latter, it suffices to note that the Monmouth County Board of Realtors has been described as "one of the largest and most active Boards in the State of New Jersey with more than 260 Realtor members and more than 1,400 Realtor Associates." 19 N.J. Realtor 7 (April 1977). To be sure, the ability to restrain trade is apparent. Marin Cty. Bd. of Realtors, Inc. v. Palsson, 130 Cal.Rptr. 1, 549 P.2d 833, 842 (Sup.Ct.1976).

Cases involving exclusion from organizations providing multiple listing services both in this State and in other jurisdictions have taken a variety of approaches and have reached divergent results. Oates v. Eastern Bergen Cty. Multiple Listing Service, supra (severe restrictions on membership in organization providing multiple listing service held per se violation); Grillo v. Board of Realtors of Plainfield Area, supra (exclusion of nonmembers of county board from its multiple listing service contravention of rule of reason); Marin Cty. Board of Realtors, Inc. v. Palsson, supra (qualifications beyond state licensing by board offering multiple listing service held invalid under rule of reason; application of per se rule specifically rejected; Collins v. Main Line Bd. of Realtors, 452 Pa. 342, 304 A.2d 493 (Sup.Ct.1973) (restrictions on membership beyond state-imposed requirements held illegal per se ); Barrows v. Grand Rapids Real Estate Bd., 51 Mich.App. 75, 214 N.W.2d 532 (App.Ct.1974) (membership restrictions not invalid under rule of reason; no evidence of substantial control of market by board); Grempler v. Multiple Listing Bureau, Inc., 258 Md. 419, 266 A.2d 1 (Ct.App.1970) (requirement that applicant maintain main office in county upheld; rule of reason and right to admission into voluntary association analysis employed).

While both of the cases in this jurisdiction have found restrictions upon membership in organizations providing multiple listing services to be unlawful restraints of trade, the cases have employed divergent analyses. Grillo, supra, which was decided prior to the adoption of our state antitrust law, applied the rule of reason test although it is abundantly clear from that opinion that the court leaned heavily toward application of the per se doctrine. Oates, supra, decided under the state antitrust act, followed the per se approach. Neither case was the subject of appellate review, leaving this court of coequal jurisdiction in a relatively uncharted sea. The threshold issue of which test is to be applied is squarely raised by the parties.

Having duly considered the matter, this court is of the opinion despite the holding in Oates and the court's apparent predisposition in Grillo that a per se analysis cannot be employed for an alleged concerted refusal to deal of this nature. Both Oates and Grillo relied upon cases such as Fashion Originators' Guild of America, Inc. v. FTC, 312 U.S. 457, 61 S.Ct. 703, 85 L.Ed. 949 (1941), Associated Press v. United States, 326 U.S. 1, 65 S.Ct. 1416, 89 L.Ed. 2013 (1944), Klor's Inc. v. Broadway-Hale Stores Inc., 359 U.S. 207, 79 S.Ct. 705, 3 L.Ed.2d 741 (1959), and Silver v. New York Stock Exchange, 373 U.S. 341, 83 S.Ct. 1246, 10 L.Ed.2d 389 (1963), which declared in sweeping language that...