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NAR asks judge to halt nationwide class action lawsuit 

Attorneys for NAR have requested a stay in the Gibson case with a filing that seems to signal a shift in strategy.

Updated January 18, 2024
3 minutes

The National Association of Realtors is hoping to put the brakes on a nationwide class action lawsuit over buyer agent compensation.

What are the details? NAR attorneys filed a motion on Dec. 27 requesting a temporary stay in the Gibson case — the first of the "copycat" commissions lawsuits, filed in Missouri immediately following the Sitzer/Burnett verdict on Oct. 31. NAR is asking the court to stop the case from continuing until post-trial motions or its appeal of the Sitzer/Burnett case are resolved.

According to the filing, the Sitzer/Burnett post-trial motions are expected to address issues which are also central to the Gibson case. Judge Stephen Bough is currently accepting post-trial motions in the Sitzer/Burnett case through March 2024.

On Jan. 2, attorneys for Compass, one of the seven brokerage defendants in the case, filed a document with the court stating that the brokerage companies — including Redfin, eXp, Howard Hanna, Weichert Realtors, United Real Estate and Douglas Elliman — were joining NAR in asking for a stay.

The plaintiffs argued against the motion to stay, asserting in court documents that NAR comes "nowhere close" to meeting the legal standards for its request.

"In seeking to stay this case, NAR neglects to inform the Court that NAR has also been named as a defendant in several other cases around the country (including federal courts in California, Georgia, and South Carolina)," according to court documents from the plaintiffs' attorneys. "So even if NAR were to obtain its requested stay here, litigation against NAR would continue in other venues. NAR's requested relief would thus merely harm Plaintiffs without even affording NAR the benefit it seeks."

Is NAR changing tactics? The filing provided some insight into NAR's legal strategy going forward. In its motion, the association argued that the plaintiffs (home sellers) were indirect purchasers of buyer agent services — which, under antitrust law, would mean the sellers were not actually the damaged party.

In October, Real Estate News spoke with Ed Zorn, chief counsel for California Regional MLS, who suggested the "indirect purchaser" argument as a possible winning approach for NAR. "If NAR can prove the buyer is the one paying the fee, the sellers lose," Zorn said. The argument was not a central part of NAR's case during the Sitzer/Burnett trial, however.

The association also noted that the allegations are similar in both cases.

"If successful, NAR's appeal of these and other issues will result in a binding appellate decision that eliminates this case [Gibson] entirely or, at a minimum, significantly impacts the scope of discovery," the court document stated.

NAR attorneys also argued that if the Gibson case is not stayed, that "leaves the parties and this court vulnerable to uncertainty and the possibility that issues will need to be relitigated," which could cost more time and money for both the plaintiffs and defendants.

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