A Massachusetts lawsuit filed against National Real Estate Information Services (NREIS), a multistate real estate settlement services provider and title insurance agency headquartered in Pittsburgh, PA, set a legal precedent in protecting the notary signing agent industry.

On April 13, 2009, U.S. District Court Judge Joseph L. Tauro ruled in favor of NREIS after the Real Estate Bar Association for Massachusetts (REBA) filed a lawsuit in Nov. 2006, claiming that real estate closings conducted by notary signing agents constituted an unauthorized practice of law. REBA wanted a permanent injunction barring NREIS and its contractors including title agents, from conducting real estate closings.

Approximately 3,000 real estate attorneys are members of REBA.

In 2006, REBA issued two legal opinions concluding that a “unitary theory” of conveyancing (a residential real estate transaction) was the law in Massachusetts. This unitary theory, as purported by REBA, tried to establish that real estate closings conducted by notary signing agents were the unauthorized practice of law. REBA then sent threatening letters to about 40 settlement service/vendor management companies, including NREIS, stating their businesses in Massachusetts were illegal under REBA’s unitary theory.

Title agents, REBA contended, could only be Massachusetts attorneys.

NREIS counter-sued, claiming that REBA’s interpretation of the state’s unauthorized practice of law statutes violated interstate commerce laws by stifling competition under the Dormant Commerce Clause (U.S. Constitution) as set in National Revenue Corporation vs. Violet, a First Circuit 1986 case.

In his decision, Judge Tauro wrote that REBA’s claim against NREIS constituted “discrimination against interstate commerce and is motivated to benefit the Bar Association, not consumers.” REBA wanted its members, Massachusetts attorneys, to control NREIS and the entire real estate transaction industry from doing business in Massachusetts, the judge noted.

NREIS contends that REBA could have sued all or several of the vendor management companies operating in Massachusetts, but sued NREIS alone.

Judge Tauro issued an order citing both sides to bear their own court costs. NREIS filed a motion on April 27, 2009, requesting the court award NREIS attorneys’ fees and costs ($879,380) which were incurred during the three-year lawsuit. They are also seeking a “risk factor enhancement to those expenses,” (the awarding of extra reasonable fees).