A judge's gavel and the scales of justice

More commissions cases paused ahead of November hearing 

Two cases involving REBNY as well as the Nosalek case are now on hold, but a Pennsylvania case will move forward — and so will MLS PIN.

June 28, 2024
3 minutes

Some of the active commissions cases are going in different directions as the courts look ahead to NAR's settlement hearing this fall.

What's happening in New York: This week, U.S. District Court Judge Robert Lehrburger ordered a stay in the March and Friedman cases, both based in New York state, until after the NAR settlement hearing on Nov. 26. 

Those two New York cases pit home sellers against the Real Estate Board of New York (REBNY) — a New York City-based association with around 15,000 members — and a variety of brokerages, many of which have settled in other cases. The plaintiffs in March and Friedman allege a different conspiracy than the one involved in Sitzer/Burnett and other cases — and say it led to even higher commission fees.

The defendants in the cases asked for a stay to reduce litigation costs. Engels & Volkers, which recently reached a settlement with home sellers, sent a letter to Judge Lehrburger arguing that the finalization of the NAR settlement extends to anyone who sold or purchased a home on any multiple listing service nationwide, regardless of affiliation to NAR.

"If plaintiffs here would like to contest the nationwide scope of the Gibson or Sitzer settlements, then the appropriate forum for their concerns is before Judge Bough in those matters," the letter stated.

What's happening in Massachusetts: The New York cases are following a similar path as Nosalek, a lawsuit brought by home sellers in Massachusetts, which is also stayed until after the final hearing on the NAR settlement. In the Nosalek case, a proposed settlement between the plaintiffs and MLS PIN is being contested by the U.S. Department of Justice because the agency doesn't think it goes far enough to deter inflated commission fees.

Although the settlement deal is on pause, MLS PIN has said it is moving forward with some of the changes outlined in the agreement. In an announcement dated June 20, the MLS said that cooperative compensation was effectively going away: "Offers of compensation, if any, will be made by the seller. Listing brokers and cooperating brokers will no longer split commissions."

Other changes outlined in the memo were focused on new compensation disclosures in listing agreements and communications with sellers.

What's happening in Pennsylvania: While some courts are pausing cases until the NAR settlement is finalized, a judge in Pennsylvania has said the Moratis case — originally known as Spring Way and then Kay — will move forward. 

Judge William Stickman sided with the plaintiffs in the case, who argued that NAR's settlement wouldn't put an end to the conspiracy they allege is happening in their case.

Impact: Plaintiffs in the commissions lawsuits have generally argued against waiting until the NAR settlement hearing in November, calling it an unnecessary delay. For the Nosalek case, it's now been four years since it was filed.

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