Wednesday, May 2, 2007

Civil action against Kentucky Real Estate Commissioners

Here is a brief overview of the litigation previously reported upon in the Louisville press, and presently pending in the Western District of Kentucky (3:06CV451).

Last year six plaintiffs filed a forty-page complaint against the Executive Director of the Kentucky Real Estate Commission (“KREC”), and five KREC commissioners, all in their official capacities, challenging KREC’s “unconstitutional prohibition against cooperation between real estate brokers licensed in Kentucky and brokers licensed by other states in the interstate marketing and sale of Kentucky commercial property.” Among other things, the plaintiffs have asked the court to enjoin the defendants from (i) enforcing “the KREC’s unconstitutional turf state policy” and “their ban on cooperation between Kentucky brokers and out-of-state brokers in the interstate marketing and sale of Kentucky commercial property” and (ii) “regulating the amount or allocation of brokerage fees associated with such cooperative brokerage services.”

In response the Attorney General of Kentucky, on behalf of the defendants, asked the court to abstain from deciding the case, and asserted that the statute in question is not facially discriminatory and does not have a discriminatory purpose or effect, that there is no less restrictive alternative to satisfy Kentucky’s “legitimate local purposes,” and that the burdens placed on interstate commerce by the statute are not clearly excessive relative to the “local benefits.”

Judge Simpson is presently considering cross motions for summary judgment, which he could rule upon at any time.


  1. The Court issued a 13 papge memorandum opinion today in which it held (page 9 forward) that Kentucky's turf state policy is unconsitutional. The court also held that the state statute requiering a license to practice real estate brokerage within the boarders of the state is valid, although this was never challanged by the plaintiffs. Looks like the first round of this fight goes to the consume.

  2. Thank you for that news, Anonymous. I'll get my hands on the opinion and include it in a new post ASAP. Thanks again.