United Multiple Listing Service, Inc. v. Bernstein

California Court of Appeal Jul 9, 1982 No. Civ. 63749Published

Before: Compton

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Holding. The court held that a voluntary real estate association may reasonably require its members to arbitrate internal disputes as a condition of membership and that such a requirement does not violate antitrust laws absent a showing of anticompetitive effects.

Issues

Whether a voluntary association may reasonably require its members to arbitrate internal disputes.
Whether the membership contract of a real estate association constitutes an unenforceable contract of adhesion.
Whether the association's internal regulations violate the Cartwright Act or the Sherman Anti-Trust Act.

Disposition. Affirmed

Quotations verified verbatim against the opinion

“the issue presented is simply one of whether a voluntary association may reasonably require its members to arbitrate internal disputes between themselves.”

“The specific procedures for arbitration and expulsion set forth in UMLS’s bylaws are eminently fair and reasonable.”

“Even an organization which is “affected with a public interest,” such as a real estate board, has the right to withhold its services and the benefits of membership from anyone who refuses to comply with its reasonable rules and regulations.”

Opinion

COMPTON, J.

United Multiple Listing Service, Inc. (UMLS), a nonprofit corporation is an organization comprised of real estate brokers doing business in a designated geographical area of Los Angeles County.

UMLS instituted a declaratory relief action to determine the validity of its action in terminating the membership in UMLS of Edward Bernstein, a real estate broker.

Bernstein answered and cross-complained for injunctive and other forms of relief claiming essentially that the membership contract between UMLS and its members is a contract of adhesion and that certain provisions contained therein violate the Cartwright Act (Bus. & Prof. Code, § 16700 et seq.) and the Sherman Anti-Trust Act (15 U.S.C.A. § 1 et seq.).

After sustaining without leave to amend a demurrer to those counts of the cross-complaint alleging the antitrust violations, the trial court entered judgment in favor of UMLS on its complaint for declaratory relief. Bernstein has appealed. We affirm.

The bylaws under which UMLS conducts its affairs contain a provision requiring members to submit disputes between themselves over fees and commissions to an arbitration procedure established by those same bylaws. Another provision of the bylaws permits the expulsion of a member who violates those bylaws.

The undisputed facts are that Bernstein refused to submit to arbitration a commission dispute between himself and another member and that after due notice refused to appear at or participate in the hearing which led to his expulsion.

[489]

Despite Bernstein’s efforts to invest this dispute with antitrust and constitutional dimensions, the issue presented is simply one of whether a voluntary association may reasonably require its members to arbitrate internal disputes between themselves.

Assuming arguendo that UMLS occupies such a position of dominance in the real estate market in its area of operation that its conduct under certain circumstances could offend the antitrust laws, neither Bernstein’s pleadings nor his evidence point to any anticompetitive effect resulting from UMLS’s internal regulations.

United Multiple Listing Service, Inc. v. Bernstein

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COMPTON, J.

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