Lawsuit over commissions advances
A U.S. district court judge in Missouri denied a request for summary judgment in the ongoing court battle between NAR and a group of homesellers.
- At issue are allegations that certain NAR policies violate antitrust laws and harm sellers.
- Named as defendants are NAR, Anywhere, Keller Williams, RE/MAX and HomeServices of America.
- “The National Association of Realtors was prepared for trial, and regardless of the timing, we are confident we will prevail.”
A class action lawsuit over real estate commissions is headed to trial next year, after a federal judge on Friday denied the defendants' request for a summary judgment on the allegations.
A summary judgment would have allowed for a full court decision without going to trial.
Filed in U.S. district court in Missouri, the lawsuit names as defendants the National Association of Realtors as well as some of the nation's largest real estate companies — Anywhere, Keller Williams, RE/MAX and HomeServices of America.
At issue are claims by homesellers that certain NAR policies violated state and federal antitrust laws and inflate seller costs, among other allegations. A three-week trial had originally been scheduled for February.
"The National Association of Realtors was prepared for trial, and regardless of the timing, we are confident we will prevail," Mantill Williams, NAR vice president of communications, told Real Estate News.
Plaintiffs' attorney Michael Ketchmark said in an interview: "We represent over 500,000 Missourians. The court's ruling today sets the stage for the October 16 jury trial in federal court in Kansas City. The defendants have kept many of the damaging emails and documents about their wrongdoing from the public eye. That is about to end. The day of accountability is coming."
Plaintiffs Scott and Rhonda Burnett, Ryan Hendrickson, Jerod Breit, Scott Trupiano and Jeremy Keel are among the homesellers who originally filed suit in 2019.
The litigation received class action status in April 2022. The plaintiffs' case is on behalf of themselves and anyone who listed their homes for sale on specific MLSs in Missouri since April 2015. Plaintiffs alleged in court documents that the commission structure for real estate agents violated Missouri antitrust law and the federal Sherman Antitrust Act.
In his dismissal of the request for summary judgment, U.S. District Court Judge Stephen R. Bough wrote, "Defendants have not put forth any evidence of negotiations or contracts between the seller-broker and the buyer-broker. Accordingly, the court finds that plaintiffs have created a genuine dispute of material fact as to whether the seller is the direct purchaser of the buyer-broker's commission."
Bough added: "Although defendants argue that the seller is not purchasing the buyer broker's services, the record shows that the seller must explicitly consent to the amount of the buyer broker's commission," according to the court's findings published in the judge's decision.
Plaintiffs' attorneys had cited a 1996 NAR rule requiring a seller's broker who lists on an MLS to "make blanket unilateral offers of commission" to the buyer's broker.
NAR spokesperson Williams said that "the U.S. model of local broker marketplaces has long been — and is still — viewed as the best value for consumers around the world," providing sellers with "equal access to the largest possible pool of potential buyers ... without hidden or extra costs."
He said that the compensation structure in place also "gives first-time, low/middle-income and all homebuyers a better shot at affording a home and professional representation."
Judge Bough ruled earlier this week in favor of Anywhere's motion to postpone proceedings to allow for an appeal by HomeServices to be heard. The trial had been set to start Feb. 21. Bough indicated that a new trial date would be scheduled for sometime in "late 2023." Friday's decision clarifies that order.
The Department of Justice in 2020 filed a similar complaint against NAR but later announced a proposed settlement with the association. In July 2021 the DOJ said it was withdrawing from the proposed agreement to focus on a broader investigation into NAR practices.