Northwest Multiple Listing Service is escalating its legal battle with Compass, filing federal counterclaims that accuse the brokerage of running a deceptive private listings strategy that harms buyers and sellers alike.
The counterclaims, filed April 2 in U.S. District Court for the Western District of Washington, mark a turning point in a case that began last April, when Compass sued NWMLS, calling it a monopolist with no meaningful competitors. Now, NWMLS is going on the offensive.
In the filing, the broker-owned MLS alleges Compass’ Three-Phased Marketing strategy, or 3PM, violates Washington’s Consumer Protection Act and relies on misleading and exclusionary practices that benefit the brokerage at the expense of buyers, sellers and competing brokers.
‘Orwellian-named’ strategy under scrutiny
NWMLS uses particularly sharp language to characterize the strategy, calling it an “Orwellian-named” approach that presents itself as consumer-friendly while steering deals toward Compass agents and limiting broader market access.
At the center of the dispute is Compass’ phased rollout of listings, which begins with a “private exclusive” period limited to Compass agents and clients, followed by a “coming soon” phase on Compass’ own platform, before listings eventually hit the MLS. NWMLS argues that, despite being labeled “pre-marketing,” those homes are effectively for sale — just not to the broader public.
“The Private Phase is a façade to gain entry to the marketplace at a critical juncture — when the property is new to the marketplace — while simultaneously withholding listing information from buyers and other brokers who are not working with a Compass agent,” NWMLS lawyers wrote in the filing.
Drawing on Compass’ own marketing materials, NWMLS alleges the strategy falls short for sellers: listings fail to sell during the private phases roughly 95 percent of the time before being pushed to the MLS after limited exposure.
The counterclaims further accuse Compass of withholding key information during those early phases, including how long a home has effectively been on the market and whether its price has changed. Compass refers to such details as “negative insights,” according to the filing — information NWMLS argues is material to buyers but which goes undisclosed when listings eventually appear on the MLS.
As for who benefits from the phased marketing strategy, NWMLS points directly to Compass.
“Such exclusionary marketing hurts sellers, buyers, and other brokers, and only benefits Compass and its brokers by allowing them a greater opportunity to participate on both sides of the sale,” the filing reads.
Responding to the counterclaims from NWMLS, a Compass spokesperson pushed back, calling the move retaliation.
“Instead of focusing on solutions that benefit consumers and promote competition, NWMLS is retaliating against us for exposing its illegal scheme to deprive homeowners of their rights and block competition,” the spokesperson said Friday. “This is how monopolists like NWMLS treat their customers.”
Rule violations, governance ties at issue
Beyond the consumer protection claims, NWMLS accuses Compass of interfering with its member agreements by encouraging agents to violate rules requiring listings to be submitted to the MLS and broadly marketed. The filing points to Compass’ longstanding role in NWMLS governance — including a recent board seat — as evidence the brokerage understood those rules when it launched the program in Washington in March 2025.
Agents who participated in Compass’ Seattle rollout previously said the brokerage coordinated the pre-marketing push and told participants it would cover any fines tied to violating MLS rules — a detail the counterclaims cite as evidence of intentional interference.
NWMLS is also grounding its case in new state law. Washington’s Substitute Senate Bill 6091, signed in March and set to take effect in June, requires brokers to market residential property to both the general public and all other brokers concurrently — a standard the MLS says mirrors its existing rules and could conflict with Compass’s private listing approach.
NWMLS is seeking a declaratory judgment affirming the legality of its rules, along with damages and attorneys’ fees.
Compass’ lawsuit against NWMLS last made headlines last month. Early in March, NWMLS sought to draw on a legal ruling from Compass’ separate lawsuit against Zillow (that lawsuit has since been dismissed). Then, later in March, a judge denied a request from NWMLS to have its case with Compass dismissed.
In addition to calling NWMLS a “monopolist,” Compass on Friday also disputed NWMLS’s nonprofit status and governance structure, saying the MLS “is a for-profit company composed of and controlled by our competitors” that “wants to maintain tight control over the Seattle-area real estate market and protect its power and money” — resurfacing an argument Compass has made since filing its original suit, which took aim at Windermere’s representation on the NWMLS board.
The brokerage also said NWMLS is “not focused on serving consumers.”
“We stand with consumers, real estate professionals, homeowners, homebuyers, and competition,” Compass’ spokesperson further said in an email. “We are confident NWMLS will fail to deter consumers and courts from its illegal acts.”
