Legal Update 2020
Instructor: John Henderson
Nevada Out-of-State Broker Cooperation Rules Are Not Unconstitutional
Marcus & Millichap Real Estate Investment Services, et al. v. Decker, et al., 2019 U.S. Dist. LEXIS 113257 (2019)
United States District Court, District of Nevada
Facts: Multiple individual plaintiff-brokers licensed in California (one licensed in Nevada) faced disciplinary action by the Nevada Real Estate Commission ("NREC") for conducting real estate business activity in Nevada without the proper licensure. The NREC found all relevant plaintiff-brokers had violated multiple Nevada real estate license laws regarding commercial out of state brokerage practices which require either a Nevada license or a cooperative certificate. These individual plaintiff-brokers, along with their affiliated firms, M&M and M&M National, filed a complaint against the NREC arguing the statutes the plaintiff-brokers were disciplined under violated the Dormant Commerce Clause and the First Amendment. Plaintiffs and Defendants filed motions for summary judgment.
Issue: Whether Nevada's requirement that out of state real estate brokers obtain a Nevada license and or cooperative certificate to assist out of state clients with purchases of Nevada property violates the Dormant Commerce Clause? Whether Nevada's requirement that brokers with a Nevada license maintain an office in Nevada violated the Dormant
Held: Defendants' Motion granted. Applying the Pike balancing test, the state has a legitimate interest in regulating real estate and the burden is not clearly excessive in relation to local benefit. Only the individual plaintiff-brokers have standing to challenge the Nevada licensing statutes which regulate the l censure of individuals as no enforcement actions had or could have been entered against the entities. None of the plaintiffs have standing to challenge the requirement for a Nevada licensee to maintain an office in state because both entities and the only individual plaintiff with a Nevada license have Nevada offices and cannot claim injury due to the statute.