DOJ weighs in on another commissions lawsuit 

The federal government continues to weigh in on real estate commissions lawsuits in a reminder to the industry that the current rules are still subject to antitrust scrutiny.

The latest development came in the form of a Statement of Interest filing by the U.S. Department of Justice. It was filed on Dec. 19 in the U.S. District Court for the Eastern District of Pennsylvania in a case known as Davis et al. v. Hanna Holdings Inc.

What the case is about: In contrast to homeseller cases like Sitzer/Burnett and Gibson, homebuyers are pursuing this lawsuit. The case was filed in May 2024 by Scott Davis, who bought a home in 2022 in Greensboro, North Carolina, using a buyer-agent broker with Allen Tate Real Estate, a subsidiary of Hanna Holdings.

Davis was joined by dozens of other plaintiffs, including some involved in other buyer commissions lawsuits like Batton. Davis has been seeking class-action status for the case while Hanna Holdings, the parent company of Howard Hanna Real Estate, has sought to get the case dismissed.

In an October motion to dismiss, Hanna Holdings argued that the plaintiffs failed to allege a plausible agreement between Hanna and its competitors or the National Association of Realtors that unreasonably restrained trade.

What the DOJ had to say: In its Statement of Interest, the DOJ said it is not taking a position on the ultimate outcome but is against the case being dismissed based on Hanna Holdings' arguments. The filing noted that association rules — in this case, policies that came from NAR — "are not automatically exempt from the per se rule against horizontal price fixing."

"The United States has a critical interest in promoting competition among real-estate brokers, which directly affects consumers' pocketbooks," the filing said.

"Competition ensures low commissions and promotes high-quality brokerage services aimed at helping buyers find and afford their ideal home. But Defendant (Hanna Holdings) has raised arguments in its pending motion to dismiss that, if accepted, would make it unjustifiably harder for plaintiffs to challenge allegedly anticompetitive agreements embodied in trade-association rules."

Why it matters: The Dec. 19 filing is significant because it signals that the DOJ is keeping a close eye on the real estate industry as it continues to find its way following the March 2024 NAR settlement, which included policy changes related to buyer agent agreements and offers of compensation.

That interest appears to be motivated by an interest in having industry competition keeping prices in check.

"Today's soaring housing prices make competition in real estate brokerage more important than ever. Antitrust laws are key to safeguarding competition, which reduces prices and improves services for homebuyers," said Abigail Slater, assistant attorney general of the DOJ's Antitrust Division, in a news release.

Other cases have attracted DOJ's attention: The DOJ has been active in real estate cases in recent years. Along with its antitrust probe into NAR, the department has inserted itself into other cases — including Nosalek and REX — through Statement of Interest filings.

The DOJ has also raised concerns about specific actions taken by some multiple listing services, even making a formal inquiry in June 2024 into buyer agreement forms produced by the California Association of Realtors.