A courtroom with attorneys and a judge, and the CMLS logo.

Why all eyes are on the Nosalek case 

CMLS is the latest organization to weigh in on the Massachetts case, while a dispute with the DOJ could shed light on the fate of compensation rules nationally.

April 1, 2024
3 minutes

For a court case that's temporarily on hold, Nosalek seems to be buzzing with activity.

The plaintiffs in the four-year-old Massachusetts class-action lawsuit have reached proposed settlement agreements with nearly all of the defendants, but the federal government's involvement — specifically with MLS PIN's settlement in the case — has created new wrinkles in the case.

The statement of interest filed by the U.S. Department of Justice in February could serve as a blueprint for how the DOJ will pursue changes to real estate commissions nationwide, and has prompted responses from other parties with an interest in the case, including the Council of Multiple Listing Services (CMLS).

Meanwhile, judges on the U.S. Judicial Panel on Multidistrict Litigation, who heard oral arguments on Mar. 28, are considering whether to combine all the buyer agent commission lawsuits, including Nosalek, into one big case. Until that decision is reached, any further action on Nosalak is pending.

The latest: Last week, CMLS joined Northwest MLS in requesting to file an amicus curiae brief responding to the U.S. Department of Justice's critique of the proposed settlement.

U.S. District Court Judge Patti Saris would need to reopen the case to allow for those submissions.

In its statement of interest, the DOJ argued that changes to compensation rules made by NWMLS, which are mirrored in the proposed settlement with MLS PIN in the Nosalek case, didn't go far enough in decreasing buyer-broker commissions or limiting steering.

The DOJ has suggested it wants an injunction that would "prohibit sellers from making commission offers to buyer brokers at all."

In its proposed brief, CMLS — a trade association with more than 225 multiple listing services — criticized the DOJ for not using the latest data in trying to determine whether the NWMLS rule changes decreased buyer-broker commissions.

CMLS was also critical of the DOJ's proposed solution, saying it would undermine the competition-enhancing principles of the Sherman Act and have a negative impact on millions of transactions nationwide.

"DOJ incorrectly predicts a glitchless transition without accounting for the complexity of the real estate transaction," CMLS' proposed brief states.

NWMLS offered similar criticisms in its brief, saying the DOJ's "ill-informed, ill-supported critique" of its rules "obscures, or misses altogether, the purpose and impact of NWMLS's changes."

How are the plaintiffs reacting? The plaintiffs are planning to file their own response to the DOJ letter, but they are first considering how the NAR settlement, announced on March 15, might impact the case. That filing is expected within seven days of the ruling by the Multidistrict Litigation panel, which may happen this month.

What were the original settlement terms? In its June settlement, MLS PIN agreed to pay $3 million and change its rules surrounding buyer-broker compensation.

The settlement, which was expected to be finalized this spring, was contested by the DOJ, who said the proposed compensation rule changes were insufficient. 

Specific rule changes originally agreed to by MLS PIN include eliminating a mandatory offer of compensation from the seller to the buyer-broker, requiring listing agents to notify their sellers that such compensation is not required, and making it clear that any compensation offered by the seller to the buyer-broker can be negotiated among all parties.

The original defendants in the case were MLS PIN, Anywhere, RE/MAX, Keller Williams and HomeServices of America. HomeServices is the only remaining defendant, as the MLS and other brokerages previously reached settlements covering commissions lawsuits brought by sellers.

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