Skynet v . NH Real Estate Commission CV-06-218-JM 3/31/08 P UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE

Skynet Corporation, d/b/a ZeroBrokerFees.com

v. Civil N o . 06-cv-218-JM Opinion No.:

Arthur Slattery, et a l .

O R D E R

Plaintiff Skynet Corporation (“Skynet”) is a Massachusetts-

based internet company which provides information to buyers and

sellers of real estate who do not want to utilize the services or

incur the costs of a real estate broker. The information is

available to the public at Skynet’s website, ZeroBrokerFees.com

(“ZBF”). Plaintiff contends that the New Hampshire Real Estate

Practice Act, N.H. Rev. Stat. Ann. 331-A, et seq. (“REPA”),

requires plaintiff to become a licensed real estate broker before

it can lawfully conduct its business in New Hampshire, in

violation of its First and Fourteenth Amendment rights. In this

civil rights action, brought pursuant to

,

plaintiff seeks declaratory and injunctive relief against

defendants, the New Hampshire Attorney General and members of the

New Hampshire Real Estate Commission (“REC”), who enforce the REPA. Before the court are several motions and objections,

including cross motions for summary judgment, which are disposed

of as set forth below.

Discussion

I. Motions to Strike (document nos. 93 & 96)

Critical to the pending summary judgment motions is a

Declaratory Ruling by the REC issued on June 1 5 , 2007 (the “DR”),

which was the result of a Petition for a Declaratory Ruling filed

by Assistant Attorney General David Hilts on March 2 1 , 2007, and

which was discussed at the REC’s April 1 9 , 2007, meeting. The

parties dispute the meaning of the DR, as well as its scope, in

their respective arguments for summary judgment.

Defendants have filed a Motion to Strike Plaintiff’s

Discussion and Exhibits Related to Settlement Negotiations

(document n o . 9 3 ) . Specifically, defendants want stricken from

the record an email dated June 2 1 , 2007, between counsel, which

sought to clarify, in the context of a stipulation the parties

were negotiating at the time, the information the REC considered

in issuing the DR. See Pl.’s O b j . to Defs.’ M . for Summ. J., Ex.

4. Likewise, plaintiff has filed a Motion to Strike Defendants’

Representations concerning the DR made in their summary judgment

2 motion (document n o . 9 6 ) . Specifically, plaintiff contends

defendants stated that the REC considered certain facts about its

website and its business activities in issuing the DR which the

REC, in fact, did not consider. The DR and the documents on

which it was based, including the Complaint in this action, the

March 2 1 , 2007, Petition and the minutes of the April 1 9 , 2007,

meeting, are all part of the summary judgment record and speak

for themselves. Neither the contested June 2 1 , 2007, settlement

negotiations email, nor defendants’ factual representations of

what the REC considered in reaching its decision, impact my

analysis of the DR or the underlying documents on which it was

based.

After carefully considering the arguments, defendants’

motion to strike (document n o . 93) is granted to the extent that

the contested June 2 1 , 2007, email shall be stricken from the

record. Plaintiff’s motion to strike (document n o . 96) is also

granted with respect to defendants’ representations of the scope

of the DR. The challenged evidence and representations are not

necessary to understand the DR or to resolve the pending summary

judgment motions. The DR will be given its plain meaning, based

on the document itself.

3 II. Summary Judgment Motions (document nos. 32 & 89)

A. Background

Plaintiff is an online classified advertising and

information service that assists people who want to sell their

homes without a real estate agent. Plaintiff charges a fixed fee

to advertise homes on the website; however, the fee charged

correlated to the ad’s features. Sellers determine the size and

complexity of the advertisement depending on the property details

they want displayed. The information is then accessible to the

public at no charge. The properties in the database can be

searched using various criteria, such as location, price, and

home size. In addition to advertising properties, the website

provides a host of related services and information, such as

basic “how-to” guidelines and mortgage calculators, neighborhood

descriptions, and links to related service providers like moving

companies, lenders, attorneys and housing inspectors.

Neither plaintiff nor any of its employees hold themselves

out as real estate agents or brokers and, in fact, the website

explicitly states: “You sell your home. You keep the broker

fee!” Compl., ¶ 2 2 . Plaintiff does not provide advice to either

buyers or sellers and does not otherwise serve in any fiduciary

4 capacity. Plaintiff receives no compensation from the sale of a

property. Despite this hands-off arrangement, plaintiff’s

business falls within the purview of a “broker” defined by the

following three subsections of the REPA:

“Broker” means any person acting for another . . . for . . . compensation, . . . who:

(d) Lists, offers, attempts or agrees to list real estate for sale, lease or exchange.

(h) Assists or directs in the procuring of prospects, calculated to result in the sale, exchange, lease, or rental of real estate.

(j) Engages in the business of charging an advance fee in connection with any contract whereby the person undertakes to promote the sale or lease of real estate, through its listing in a publication or data base issued for such purpose, through referral of information concerning such real estate to brokers, or both.

RSA 331-A:2, III (Supp. 2007). This statutory language

encompasses plaintiff’s business of promoting the sale of real

estate, by listing properties on a database that is designed to

assist or direct in the procuring of prospects to result in the

sale of real estate, for which plaintiff charges an advance fee.

Plaintiff operates throughout the country, but lists only a

small number of New Hampshire properties because of its concern

that it would be prosecuted for violating the REPA if it were to

5 enter the New Hampshire market without first obtaining a real

estate brokerage license. The REPA proscribes “any person,

directly or indirectly to act as a real estate broker or real

estate salesperson without a license and otherwise complying with

the provisions of this chapter,” RSA 331-A:3, and imposes

criminal penalties for doing s o . See RSA 331-A:34 (rendering an

individual guilty of a misdemeanor and a corporation guilty of a

felony for acting as a real estate broker or salesperson without

a license). The REPA exempts from its licensing requirement,

however, any “newspaper or other publication of general

circulation” that charges advance fees paid “solely for

advertisement.” See RSA 331-A:2, I (defining “advance fees” to

exclude advertising fees in limited situations).

Plaintiff believes its business does not fall within this

exemption, because it has been unable to obtain a definitive

answer from defendants as to whether the provision for a

“newspaper or other publication of general circulation” would

include plaintiff and, therefore, exempt it from the licensing

requirement, and because other businesses have been subjected to

investigation and prosecution by defendants for engaging in

similar activity. In 2006, defendants investigated plaintiff’s

6 founders’ former employer, ISoldMyHouse.com (“ISMH”), and named

Ed Williams, one of plaintiff’s two founders, in that action.

See Pl.’s M . for Summ. J., Ex. 6 (Notice of Hearing regarding NEC

Complaint filed against ISMH to investigate unlicensed brokerage

activity); see also Pl.’s O b j . to Defs.’ M . for Summ. J., Ex. 6

(Affidavit of Francis Mackay-Smith, ¶¶ 26-29). Concerned about

being subject to similar treatment, plaintiff commenced this

action in June 2006.

On March 2 1 , 2007, Assistant Attorney General David Hilts

filed a Petition for Declaratory Ruling with the REC which

inquired about the applicability of the REPA to plaintiff. The

Petition was discussed at a regular REC meeting on April 1 9 ,

2007, and a Declaratory Ruling was issued on June 1 5 , 2007

(“DR”). See Defs.’ M . for Summ. J., Ex. D (unapproved minutes

from the 4/19/07 meeting) and Pl.’s M . for Summ. J., Exs. 8

(petition) & 9 ( D R ) . In the DR, the REC found plaintiff was not

required to obtain a real estate broker license in New Hampshire,

based upon the description of its activities provided both in the

Petition and in the Complaint in this action, which was attached

to the Petition. Despite that finding, plaintiff continues to

believe it faces a real threat of prosecution for failing to

7 obtain a real estate brokerage license. That perceived threat is

the basis for the relief sought here.

B. Standard of Review

Summary judgment is appropriate when “the pleadings,

depositions, answers to interrogatories, and admissions on file,

together with the affidavits, if any, show that there is no

genuine issue as to any material fact and that the moving party

is entitled to a judgment as a matter of law.” Fed. R. Civ. P.

56(c); see also Navarro v . Pfizer Corp.,

0 , 93-94 (1st

Cir. 2001) (citing authority). The burden of showing an absence

of any genuine issues of material fact lies with the moving

party. See

The facts must be viewed in the light most

favorable to the non-moving party, construing all reasonable

inferences in his favor. See Suarez v . Pueblo Int’l, Inc.,

9 , 53 (1st Cir. 2000). “The role of summary judgment is to

pierce the boilerplate of the pleadings and provide a means for

prompt disposition of cases in which no trialworthy issue

exists.” Quinn v . City of Boston,

8 , 28 (1st Cir.

2003) (citing Suarez,

3 ) .

On cross motions for summary judgment, as are presently

before the court, the standard of review is applied to each

8 motion separately. See Am. Home Assur. C o . v . AGM Marine

Contractors,

1 0 , 812 (1st Cir. 2006); see also Mandel

v . Boston Phoenix, Inc.,

9 8 , 205 (1st Cir. 2006) (“The

presence of cross-motions for summary judgment neither dilutes

nor distorts this standard of review.”). Here both plaintiff and

defendants argue the record contains no genuine issue of material

fact and that judgment can be entered in favor of their

respective positions. The matter, therefore, is appropriate for

summary disposition. See Quinn,

8 .

C. Arguments

Plaintiff argues that, facially and as-applied, the REPA

violates its First Amendment rights. Defendants respond that the

REPA is constitutional, both facially and as-applied, and that

the DR moots this action. Because mootness may eliminate this

court’s jurisdiction over the matter, the initial inquiry must be

whether or not the DR moots plaintiff’s challenge.

1. Jurisdiction

Fundamental to this court’s power to adjudicate claims is

that an actual case or controversy exist. See U.S. Const., Art.

III, § 2 , c l . 1 ; see also Allen v . Wright,

3 7 , 750-52

(1984) (discussing the prudential limits imposed on courts by

9 Article I I I ) . This “case or controversy” requirement has given

rise to the doctrines of standing and mootness, among others,

which circumscribe the power of the judicial branch and ensure

that the plaintiff raises only those rights particular to himself

that are protected by the law invoked. See id. “The requirement

of standing [ ] has a core component derived directly from the

Constitution. A plaintiff must allege personal injury fairly

traceable to the defendant’s allegedly unlawful conduct and

likely to be redressed by the requested relief.” Id. at 751

(citation omitted); see also Lujan v . Defenders of Wildlife,

(1992) (describing elements of standing);

Ramirez v . Ramos,

2 , 97 (1st Cir. 2006) (explaining how

plaintiff must possess a personal stake in the litigation).

Plaintiff clearly has standing to wage this constitutional

challenge to the REPA. See

at 98 (citing authority).

Plaintiff’s challenge presents “a classic ‘case’ or ‘controversy’

within the meaning of Art. III,” of “the ‘conflict between state

officials empowered to enforce a law and private parties subject

to prosecution under that law.’”

(quoting Diamond v .

Charles,

4 , 64 (1986)). It is undisputed that

plaintiff engages in a course of conduct that is protected by the

10 First Amendment and perceives a sufficient threat of prosecution

to have chilled its interest in pursuing its business in New

Hampshire. These circumstances are sufficiently immediate to

warrant the declaratory relief sought here. See McInnis-Misenor

v . M e . Med. Ctr.,

3 , 69 (1st Cir. 2003) (explaining

“ripeness” assesses standing at the beginning of the suit). Even

i f , however, a plaintiff initially had standing to bring a claim,

as is the case here, “a federal court is duty bound to dismiss

the claim as moot if subsequent events unfold in a manner that

undermines any one of the three pillars on which constitutional

standing rests: injury in fact, causation, and redressability.”

Ramirez,

.

Defendants bear the burden of proving plaintiff’s claim is

moot.

To meet that burden, defendants assert that the REC,

in the DR, found plaintiff did not need a license to operate in

New Hampshire, which eliminated any threat of injury and resolved

the controversy of whether REPA applied to plaintiff. Plaintiff

counters that defendants did not fully consider its business

activities when they issued the DR and, in any event, that the DR

has no preclusive or binding effect, so it does not moot the

controversy. Critical to the issue of mootness is the very fact-

11 specific nature of the declaratory ruling inquiry. Defendants

point to the fact-specific nature of the declaratory ruling

process to support their position that the DR is conclusive, see

Defs.’ Mem. in Support of M . for Summ. J. at 23 (citing RSA 331-

A:28, II to demonstrate how the REPA requires the REC to

determine each case individually); plaintiff points to that same

fact-specific inquiry to argue the DR is only as good as the

particular facts considered in i t , such that when the facts

change, so will the ruling. See Pl.’s Mem. in Support of O b j . to

Defs.’ M . for Summ. J. at 13-17 (arguing the fact specific

inquiry limits the precedential value of the ruling). I find

plaintiff’s argument, that the DR is not a binding interpretation

of the REPA, is correct, for the following reasons.

First, “[i]t is well established that the legislature may

delegate to administrative agencies the authority to promulgate

rules necessary to implement a statue.” Suburban Realty, Inc. v .

Albin,

, 6 9 1 ,

(1989). Consistent

with that principle, the statutory framework at issue here

anticipates that the REC will promulgate rules to construe and

enforce the REPA, which the REC has done. See e.g. RSA 331-A:5,

I (creating the REC “whose duty shall be to administer this

12 chapter”); RSA 331-A:7 (enumerating the REC’s powers, including

notification of any proposed rulemaking); RSA 331-A:25 (providing

for the REC to adopt rules under New Hampshire’s Administrative

Procedure Act, RSA 541-A (“APA”), relative t o , among other

things, the “[c]onduct of licensed brokers and salespeople”); RSA

331-A:26, II (prohibiting conduct which violates any rules or

orders issued by the R E C ) ; see generally N.H. Code of Adm. R.,

Ch. Rea 1 0 0 , et seq. (“Rea”) (the REC’s administrative rules).

That rules are the mechanism by which the REC applies the REPA’s

provisions is further evinced by the procedures attendant to the

passing of a rule and the definition of a rule. See e.g. Rea

201.01-201.07 (procedures for adopting rules requiring public

notice and hearings); see also RSA 541-A:1, XV (defining rule as

“each regulation, standard, or other statement of general

applicability adopted by an agency to (a) implement, interpret,

or make specific a statute enforced or administered by such

agency or (b) prescribe or interpret an agency policy, procedure

or practice requirement binding on persons outside the agency”

(emphasis added)).

Second, the statutory framework of the REPA anticipates that

the REC will enforce it following detailed procedures for

13 disciplinary actions and issuing orders. See e.g. RSA 331-A:7,

VI (authorizing REC to issue orders, subpoenas, statements of

charges and statements of intent to deny licenses), RSA 331-A:28-

30 (setting forth disciplinary procedures), Rea 204.01-206.02

(governing the adjudicatory process). An “order” is “the whole

or part of an agency’s final disposition of a matter, other than

a rule . . .,” RSA 541-A:1, X I , which follows the formal

procedures outlined above for resolving alleged violations of the

REPA. Thus, orders are issued by the REC acting in its

adjudicatory capacity.

These provisions for rules and orders do not apply to

declaratory rulings, which are distinguished in the statutory

framework governing the REPA. Significantly, an implementing

“rule” explicitly excludes a “declaratory ruling.” See RSA 541-

A : 1 , XV (defining rule to “not include . . . (d) declaratory

rulings”). A declaratory ruling is defined as “an agency ruling

as to the specific applicability of any statutory provision or of

any rule or order of the agency.” RSA 541-A:1, V (emphasis

added). A declaratory ruling informs the petitioner, not the

public, “as to the applicability of any provision of RSA 331-A or

of any rule or order of the commission.” Rea 201.08. It issues

14 following the simple procedure of a petition being filed and the

matter being discussed at the next scheduled meeting of the REC,

with no further investigation, public hearing or other process

being required before the written decision is mailed to the

petitioner. See Rea 201.08. By its very terms, a declaratory

ruling is not a rule or an order, has none of the procedural

protections of a rule or an order and, consequently, does not

have the same legal effect of a rule or an order.

Finally, any lingering doubt about the preclusive effect of

a declaratory ruling is dispelled by the undisputed facts in the

record. Commissioner Arthur Slattery, a defendant here, stated

in his deposition that unless the factual circumstances “were

identical,” which he had no knowledge of “that situation ever

happening nor [did he] expect in [his] lifetime that it would,”

the REC would not be bound by its previous declaratory rulings.

See Pl.’s O b j . to Defs.’ M . for Summ. J., Ex. 1 (4/3/07 Slattery

Dep., at 8 5 , 89-85 (testifying generally the REC has no policy or

practice of being bound by prior declaratory rulings decisions).

Similarly, when asked by plaintiff, defendants repeatedly stated

that they could not answer whether or not certain conduct fell

within the exemption to the licensing requirement and that each

15 question had to be presented to the REC as its own Petition for

Declaratory Ruling. See Pl.’s O b j . to Defs.’ M . for Summ. J.,

Ex. 5 (Defendants’ Responses and Supplemental Responses to

Plaintiff’s First Set of Requests for Admission). By defendants’

own admission, the declaratory ruling is a very limited inquiry,

based on the specific facts immediately before the REC at that

particular time, which may or may not be expanded depending on

what specific facts subsequently arise. This understanding is

consistent with the statutory framework governing declaratory

rulings, that they are informal, fact-specific decisions, not

binding pronouncements of the REPA. See 5 Richard V . Wiebusch,

New Hampshire Practice: Civil Practice and Procedure, § 64.12

(2d ed. 1998) (explaining “at a minimum, [declaratory rulings]

bind the agency not to take action against the recipient that is

inconsistent with the views therein expressed, at least without

prior warning.” (emphasis added)).

Based on the foregoing, I conclude the DR is not binding on

the parties here and should not be given any preclusive effect.

While the DR may have resolved the specific questions presented

by the March 2 1 , 2007, petition, it limits its conclusion to the

factual framework stated in the petition, which is not a

16 definitive statement that plaintiff’s business is exempt from the

licensing requirement, as an order or a rule would b e . Under

these circumstances, plaintiff remains faced with the actual

threat of an injury that would be caused by enforcement of RSA

331-A:3, ( d ) , (h) or ( j ) , and that can be redressed by the relief

sought here. See Ramirez, 438 U.S. at 100 (explaining the

exception to the mootness doctrine for a situation which is

“capable of repetition yet evades review”). Accordingly, this

court retains jurisdiction over the matter.

2. Licensing under the REPA

Plaintiff alleges that the REPA requires it to obtain a real

estate broker’s license before it can operate its business of

providing real estate information, listings, and advertising

services in New Hampshire, in violation of its First Amendment

rights. Plaintiff argues that it is not exempted from the

licensing requirement by the provision for “newspapers and other

publications of general circulation,” RSA 331-A:2, I , because it

is “engaged in the business of listing property for sale,” and

because reading the exemption to include plaintiff would result

in the exception swallowing the rule. See Pl.’s Mem. in Supp. of

O b j . to Defs.’ M . for Summ. J. at 10 (emphasis in original).

17 Defendants take the opposite position, specifically arguing that

the exemption covers databases like plaintiff’s that charge

advance fees to list classified advertisements of real estate.

The resolution of this dispute requires me to construe the

definition of “broker” and “advance fees” set forth in the REPA,

to determine whether it requires the unconstitutional licensing

plaintiff contends it does.

a. Statutory Construction

The interpretation of a statute is a question of law. See

Chevron v . Natural Res. Defense Council,

3 7 , 842-43

(1984) (stating rules of statutory construction); Gen. Motors

Corp. v . Darling’s,

8 , 107 (1st Cir. 2006); N.H. Dep’t

of Envtl. Servs. v . Marino,

,

1 8 , 824

(2007). The court first examines the language of the statute and

construes it consistent with its plain and ordinary meaning.

Id.; see also Bourne v . Northwood Props., LLC (In re Northwood

Props., L L C ) ,

5 , 32 (1st Cir. 2007) (focusing on

language of statute and looking to state law where state statute

at issue). The statute must be considered as a whole, “presuming

that the legislature did not use ‘superfluous or redundant

words.’” S . Down Rec. Ass’n v . Moran,

8 4 , 4 8 7 , 686

1 4 , 316 (1996) (quotation omitted). If the language is

ambiguous, however, or if there is more than one reasonable

interpretation, the court looks beyond the statute to the

legislative history to determine its intent. See Carlisle v .

Frisbie Mem’l Hosp.,

6 2 , 773,

(2005).

“‘Our goal is to apply statutes in light of the legislature’s

intent in enacting them, and in light of the policy sought to be

advanced by the entire statutory scheme.’”

(quoting Hughes

v . N.H. Div. of Aeronautics,

0 , 38-39,

8 , 26

(2005)). When, as is the case here, an agency implements a

statute, the court may also consider the agency’s application and

interpretation of the statute for guidance. See Chevron,

(explaining deference to be accorded agency’s

construction of its statute); WorldNet Telecomm., Inc. v . P.R.

Tel. Co.,

, 5 (1st Cir. 2007) (same); see also In re

Appeal of Stanton,

2 4 , 7 2 8 ,

(2002)

(deferring to agency if its decision comports with the express

statutory language).

The statutory language at issue here are the definitions of

both “broker” and “advanced fees,” set forth at RSA 331-A:2, III

and RSA 331-A:2, I , respectively. Applying the rules of

19 statutory construction to these terms, I find that the REPA did

not intend to regulate a business like plaintiff’s, and that

plaintiff is exempt from the statute’s licensing requirement.

b. Meaning of “Broker”

The REPA defines a broker as “any person acting for another

. . . for . . . compensation,” who does any number of specific

activities, set forth in subsections (a) - ( j ) . See RSA 331-A:2,

III. The critical language here is not the specific activities

performed, such as listing real estate for sale, RSA 331-A:2, III

( d ) , assisting in the procuring of prospects calculated to result

in the sale, RSA 331-A:2, III ( h ) , or engaging in the business of

charging an advance fee in connection with any contract designed

to promote the sale of real estate by listing in a database, RSA

331-A:2, III ( j ) , all of which plaintiff admittedly does. The

critical phrases are “acting for another” and “for compensation,”

because unless the person does the activities while acting for

another and receiving compensation, the activities do not fall

within the definition of broker. See RSA 331-A:2, III.

The plain meaning of “acting for another” is to do something

at the behest o f , on behalf o f , or for the benefit of someone

else. Based simply on the ordinary meaning of “acting for

20 another,” plaintiff may be understood as acting for sellers by

providing a medium through which they can advertise their

property for sale, which assists them in procuring buyers. When

that language is put in the context of the statutory scheme,

however, it connotes more of an agency relationship than merely a

conduit service. See e.g. RSA 331-A:1 (explaining the purpose of

the statute is to ensure that real estate brokers “meet and

maintain minimum standards which promote public understanding and

confidence in the business of real estate brokerage”); see also

Blackthorne Group, Inc. v . Pines of Newmarket, Inc.,

,

(2004) (describing the REPA as

protecting the public against broker fraud and incompetence).

The REPA “establishes a comprehensive system for regulating real

estate sales and brokerage practices.” Suburban Realty, Inc.,

9 2 ,

. To that end, its focus is on

whether the broker treats the “other,” for whom it is acting,

with competence and fairness. See e.g. RSA 331-A:10, II (listing

qualifications for licensure); RSA 331-A:25-a (providing a

licensee “is bound by the duties of loyalty, obedience,

disclosure, confidentiality, reasonable care, diligence, and

accounting” whether acting as the seller’s or buyer’s agent or as

21 a disclosed dual agent); RSA 331-A:25-b, c & d (detailing duties

of agency); In re Wehringer’s Case,

0 7 , 7 2 0 ,

(1988) (describing a real estate agent as occupying a

position of trust and confidence and owing an obligation of

undivided loyalty to the client); Crowley v . Global Realty, Inc.,

1 4 , 819,

(1984) (same).

The record here readily demonstrates that plaintiff does not

conduct its business as any sort of agency arrangement with its

clientele. The undisputed facts are that plaintiff does not

advance the interests of either the seller or buyer, other than

by facilitating the transmission of information. Neither

plaintiff nor any of its employees hold themselves out to be real

estate brokers or agents. Plaintiff’s website clearly states:

“You sell your home. You keep the broker fee.” Plaintiff and

its employees do not give advice about any property transactions

and do not purport to exercise judgment on behalf of either

sellers or buyers at any stage of a transaction. Plaintiff

clearly represents itself to the public as a “For Sale By Owner”

operation, actively distancing and distinguishing itself from a

real estate broker or agent. These characteristics demonstrate

that while plaintiff’s business activities may satisfy a literal

22 reading of brokerage activity set forth in RSA 331-A:2, I I I , in

realty, plaintiff does not “act for another” within the meaning

of the REPA, so as to definitively qualify as a broker.

The second critical component of the definition of a broker,

as highlighted above, is that the broker receive compensation for

acting for another. It is undisputed that plaintiff receives

compensation for the services it provides in the form of advance

fees. While plaintiff again satisfies the literal definition of

a “broker,” the REPA separately defines “advance fees.” Because

statutes must be read in their entirety, recognizing that the

legislature did not use redundant or superfluous words, the

definition of “broker” necessarily is circumscribed by the

definition of “advance fees.”

c. Meaning of Advance Fees

“‘Advance fees’ mean any fees charged for services,

including, without limitation, any fees charged for listing,

advertising, or offering for sale or lease any real property.

Advance fees shall not include fees paid solely for advertisement

in a newspaper or other publication of general circulation.” RSA

331-A:2, I (emphasis added). Plaintiff argues the exemption is

limited to newspapers and similar publications whose advertising

23 of real estate is only incidental to their primary purpose, and

excludes businesses, like plaintiff’s that are “engaged in the

business of listing property for sale.” I find this reading of

the REPA neither comports with its plain language nor advances

its purposes.

While a “newspaper” is sufficiently familiar to be self-

explanatory, the term “other publication of general circulation”

is not defined. Ascribing to these words their ordinary meaning,

I find that “publication of general circulation” means a medium

readily accessible to the public at large. That construction of

the exemption includes the internet, which is a medium widely and

readily accessible to the public. I reach this conclusion for

several reasons.

First, the plain language of the exemption supports this

reading. The clause uses the word “or,” which is a conjunction

that is used to indicate alternatives or equivalents. See

Webster’s Ninth New Collegiate Dictionary at 829 (1990). Its use

conveys that any equivalent to a newspaper is exempted. The

focus is on the medium; mediums that transmit information like a

newspaper fall within the exemption. The medium must, like a

newspaper, be in “general circulation,” which, given its ordinary

24 meaning, may be understood as readily available to the public,

accessible to the whole population, or in the free flow of

information. The internet is a medium by which information is

disseminated, that is widely accessible to the population at

large and involved in the free flow of information. I find,

therefore, that it is a form of a “publication of general

circulation,” equivalent to a newspaper.

Second, as a practical matter, newspapers are now on the

internet, rendering the mediums one and the same. As the

undisputed record demonstrates here, the classified advertisement

sections of The Boston Globe and The Boston Herald newspapers are

on the internet and may be used by the public to list or peruse

properties for sale much like plaintiff’s website. See Pl.’s M .

for Summ. J., Ex. 18 (DeSisto deposition) & Ex. 19 (Gallagher

deposition). These newspapers receive advance fees for the

classified ads they post, but are exempt from regulation pursuant

to RSA 331-A:2, I . There is no logical distinction between that

service and plaintiff’s business, and I will not construe the

exemption to reach the absurd result of exempting one form of

classified advertising but not another. See Forsalebyowner.com

Corp. v . Zinneman,

6 8 , 877 (E.D. Cal. 2004); see

25 also Cordero-Hernandez v . Hernandez-Ballesteros,

4 0 ,

254 (1st Cir. 2006) (Cyr, S r . J., dissenting) (arguing local

newspaper’s posting online satisfies the mail/wire fraud

statute’s interstate communication requirement); D’Antonio v .

Bella Vista Assoc. (In re Bella Vista Assoc., L L C ) , N o . 07-

18134/JHW,

, *2 (Bkrtcy. D.N.J. Dec. 1 8 , 2007)

(listing as alternative marketing mediums “national and regional

newspapers and real estate journals, press releases, . . . and

internet marketing”).

The similarity between the mediums means plaintiff’s

argument, that the exception swallows the rule if it is construed

to include websites, applies with equal force to newspapers. The

exemption, however, explicitly refers to newspapers, and the

legislature cannot be understood as thoughtlessly writing the

definition so that the exception swallows the rule. Consistent

with the REPA’s policy of regulating brokerage activity, the

legislature exempted from the licensing requirement certain

publicly available mediums like newspapers, because a medium

which merely transmits information cannot reasonably be

understood as “acting for another.” Including internet-based

advertising, like plaintiff’s, in the exemption is consistent

26 with the statute’s history and purpose.

Third, in other contexts the internet has been used as the

preferred medium to publish information, which substantiates my

reading of “publication of general circulation” to include the

internet. See e.g. Plata v . Schwarzenegger, N o . CO1-1351 THE,

, *4 (N.D. Cal. June 4 , 2007) (inviting government

bids by “posting . . . on the . . . website and publishing the

solicitation in a trade publication of general circulation and/or

an internet-based public RFP clearinghouse”); Martin v . Weiner,

N o . 06CV94,

, *3 (W.D.N.Y. Nov. 2 8 , 2007) (finding

the “best notice practicable under the circumstances” to satisfy

Fed. R. Civ. P. 23(c)(2)’s class action notice requirement was

defendant’s website).

The issue here is whether one aspect of that notice, posting of the notice on the defendants’ website pages, is a reasonable manner for notice.. . . The use of the Internet for notice to class members is novel and, with the State defendants’ website, may be over inclusive in notifying the entire state for a regionally based class. But this is the same effect of posting a notice in a general circulation newspaper where a number of readers would not be interested class members.

Finally, defendants’ interpretation of the exemption

27 provision is consistent with the statute’s plain language. See

Worldnet Telecomms. Inc.,

; In re Appeal of Stanton,

2 8 ,

. The DR found that plaintiff

would be exempt from the licensing requirement because it

“receives only an upfront fixed fee for advertisements.” Defs.’

M . for Summ. J., Ex. D. The fact that plaintiff receives other

revenue for other business ventures it pursues is irrelevant to

the application of the REPA in general or the exemption in

particular. The REC has consistently maintained that if a flat

fee for advertisements is charged, without any provision of

advice, counsel or direction to either the sellers or the buyers,

then the advertisement medium would not need to be licensed. See

e.g.

Ex. A (8/22/06 REC meeting minutes allowing The Lacey

Group to advertise without a license); Pl.’s M . for Summ. J., Ex.

16 (9/15/03 Ronci/Flanagan letter bringing internet advertising

service in compliance with the REPA); c f . Defs. M . for Summ. J.,

Ex. B (11/15/05 REC meeting minutes finding listing service that

receives no upfront fee but earns a commission if the property

sells needs to be licensed); Pl.’s O b j . to Defs.’ Mot. for Summ.

J., Ex 8 (12/3/02 Arnold/Cunningham letter allowing listing if

“merely acts as a bulletin board for owners to post their own

28 listing” but not if “a commission or other valuable

consideration” was paid).

Plaintiff’s reliance on the investigation of ISMH.com is

misplaced. The complaint filed against ISMH.com alleged that the

company provided advice to buyers and sellers, screened buyers

before allowing access to sellers, claimed ownership of the

listings, and represented to the public that is had “sold

thousands of homes saving sellers millions of dollars in

commissions.” See Pl.’s M . for Summ. J., Ex. 5 . The REC’s

decision to investigate ISMH.com based on this complaint is

consistent with its limited application of the exemption

provision to internet-based listing services that provide an

advertising medium for a fixed fee but do not engage in the sales

process.

Based on the foregoing, I find that plaintiff, as a “web-

based publisher of real estate advertising and information,”

Pl.’s Mem. in O b j . to Defs.’ M . for Summ. J. at 1 8 , is exempt

from the licensing requirements of the REPA, under the terms of

that statute. See RSA 331-A:2, I . By charging a flat-rate fee

for advertising on its internet site, plaintiff’s compensation

falls squarely within the provision exempting “advance fees . . .

29 paid solely for advertisement in a . . . publication of general

circulation.” RSA 331-A:2, I . That only advance fees received

by a “newspaper and other publications of general circulation”

would be exempt from the definition of compensation advances the

statutory purpose of regulating only those activities done by a

person “acting for another.” The medium at issue here, like a

newspaper or other publication of general circulation, simply

provides space for the advertisements to be made publicly

available. This service cannot be understood as “acting for

another” as that term is used in the REPA, and so the advance

fees paid for that service are exempted from the statutory

definition of broker.

I find, therefore, that, based on its business activities as

represented in the record, plaintiff is not a “broker” within the

meaning of the REPA. The advance fees plaintiff receives for the

service it provides do not constitute “compensation” for “acting

for another” as required to satisfy the definition of a broker

set forth at RSA 331-A:2, III. This reading of the statute

comports with REPA’s policy goal of protecting the public from

“fraud and incompetence at the hands of unscrupulous brokers and

salesmen,” Corkin v . Elger Corp.,

2 2 , 523,

740, 741 (1965) (internal quotation omitted)), not of regulating

the advertisement of real estate. Since plaintiff is not a

broker, it does not need to be licensed in order to operate in

New Hampshire. See RSA 331-A:3.

3. The First Amendment Challenge

While plaintiff mounts a full-scale constitutional attack on

the REPA, the preceding discussion obviates the need for any

constitutional analysis of i t , because it does not require

plaintiff to obtain a license before it can engage in its

business operations here. Under these circumstances, the court

should avoid rendering constitutional pronouncements. See Wash.

State Grange v . Wash. State Republican Party, __ U.S. ___, 128 S .

C t . 1184, 1191 (2008) (rejecting facial challenge to election

statute because “[e]xercising judicial restraint in a facial

challenge frees the Court . . . from unnecessary pronouncement on

constitutional issues” (internal quotation omitted)); Ashwander

v . Tenn. Valley Auth.,

8 8 , 347 (1936) (Brandeis, J.

concurring) (“‘It is not the habit of the court to decide

questions of a constitutional nature unless absolutely necessary

to a decision of the case.’” (internal quotation omitted)); see

also N.H. Dep’t of Envtl. Servs.,

1 4 , 928 A.2d at

31 825 (“‘In reviewing a statute, we presume it to be constitutional

and we will not declare it invalid except upon inescapable

grounds.’” (internal quotation omitted)). Because plaintiff’s

alleged injury has been redressed by my finding that the

exemption provision, RSA 331-A:2, I , enables plaintiff to conduct

its business here without first obtaining a real estate broker’s

license, the matter has been resolved.

Conclusion

As explained in detail above, defendants’ motion for summary

judgment (document n o . 32) is granted. As construed herein, the

REPA does not violate plaintiff’s First Amendment rights either

facially or as applied. Plaintiff’s motion for summary judgment

(document n o . 89) is granted in part and denied in part.

Plaintiff may obtain the injunctive relief sought to the extent

that plaintiff may operate its business in New Hampshire without

being required to obtain a real estate license under the REPA.

Plaintiff’s request for declaratory relief, that the REPA is

unconstitutional, is denied.

In its complaint, plaintiff requested an award of attorneys’

fees and costs as part of the relief sought. A hearing on

whether or not plaintiff’s request should be granted and, if s o ,

32 on the amount thereof, is scheduled for Thursday, May 1 5 , 2008,

at 10:00 a.m. Plaintiff shall file a motion and any supporting

documentation with respect to its request for fees and costs by

Monday, April 1 4 , 2008. Defendants’ response is due by Monday,

April 2 8 , 2008. If necessary, plaintiff may file a reply by

Monday, May 1 2 , 2008.

SO ORDERED.

____ __m___ R. Muirhead ited States Magistrate Judge

Date: March 3 1 , 2008

cc: Valerie J. Bayham, Esq. Charles G. Douglas, Esq. Steven M . Simpson, Esq. William H . Mellor, Esq. Jason R.L. Major, Esq. James W . Kennedy, Esq.

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