Victory
for Speech
IJ Once Again Secures Freedom For Online
Real Estate Advertisers
June 2008
By Valerie Bayham
Government bullying threatened to shut down the online
real estate advertising firm of entrepreneurs Ed Williams
and Frank Mackay-Smith. But thanks to yet another victory
in a series of wins for Internet publishers by the Institute
for Justice, Ed and Frank are free to provide their service,
undisturbed by petty bureaucrats who often do the bidding
of private competitors.
Williams and Mackay-Smith are dedicated to giving home
sellers the choice of how to sell their homes: pay a licensed
real estate agent a hefty commission or enable the homeowner
to sell their home themselves using the power of the Internet.
Williams and Mackay-Smith's online advertising and information
business, ZeroBrokerFees.com, provides sellers with the
tools to advertise their property themselves. But because
the New Hampshire Real Estate Commission had already gone
after one online advertising business, Ed and Frank were
rightfully concerned that they would be the next targets
of a real estate cartel that is busily protecting its members.
Then IJ took up their fight, and just this past March,
Magistrate Judge James R. Muirhead of the U.S. District
Court for the District of New Hampshire ruled that ZeroBrokerFees.com
may do business online without first securing a real estate
broker’s license. The court ruled that websites that
advertise properties for sale are just like newspaper classified
advertising and thus do not need a broker’s license
under New Hampshire law. As a result, the Court held that
ZeroBrokerFees.com is entitled to an injunction preventing
the state from enforcing the licensing requirement against
it.
This is great news for consumers, as well as for Ed and
Frank. With the housing market in the dumps, many home sellers
would prefer to keep every penny of their homes’ worth
in their own pockets rather than using real estate brokers.
And for Ed and Frank, the decision means that they won’t
have to waste thousands of hours on training and put their
business on hold while they obtain a real estate broker’s
license.
In his 33-page decision, Judge Muirhead found that ZeroBrokerFees.com
is a “web-based publisher of real estate advertising
and information.” The Court concluded that “[t]here
is no logical distinction between [a newspaper classified
advertising service] and plaintiff’s business, and
I will not construe the exemption [for newspapers] to reach
the absurd result of exempting one form of classified advertising
but not another.” Although the Court ruled on statutory
grounds, the judge clearly recognized the First Amendment
implications.
Ed and Frank hope that their victory will clear the way
for other Internet businesses to operate without the hassles
and threats of prosecution from pointless regulations.
Building on success is exactly why IJ brought this case
in the first place. The decision in ZeroBrokerFees.com built
on IJ’s successful First Amendment challenge to California’s
real estate licensing laws, ForSaleByOwner.com v. Zinnemann.
Moreover, the ForSaleByOwner.com decision has already been
used by online advertising businesses to help insulate them
from attacks by other real estate commissions across the
nation. By setting precedent in one location, IJ has gotten
bureaucrats—normally aggressive in protecting their
turf—to back off before deciding to pick on the next
budding entrepreneur. And that’s a victory that can
be celebrated across the World Wide Web.
Valerie Bayham is an IJ staff attorney.
http://www.ij.org/publications/liberty/2008/17_3_08_b.html
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