The National Association of REALTORS® (NAR) can put at least one of its commission-related lawsuits in its rearview mirror.
The U.S. District Court for Northern Illinois ordered to dismiss the Leeder v. The National Association of Realtors et al. antitrust case on May 2 after more than a year of both sides duking it out in court.
“Although other district courts have permitted indirect purchasers to proceed with their injunctive relief claims even when the direct purchasers are seeking the same relief, the Court finds those cases inapposite to the circumstances here,” wrote U.S. District Court Judge Andrea R. Woods in a memo accompanying her decision to dismiss the lawsuit.
“Moreover, in both cases allowing indirect purchasers and direct purchasers to seek injunctive relief simultaneously, the indirect purchasers remained participants in the affected market,” Woods wrote. “Leeder has already purchased his home and does not allege that he intends to purchase a new home in the future.
“It, therefore, does not appear that Leeder faces ‘a significant threat of injury from an impending violation of the antitrust laws or from a contemporary violation likely to continue or recur,’” she added.
The ruling was met with a celebration by NAR, which claimed that it was pleased with Judge Andrea R. Wood’s decision to lay the “baseless complaint” to rest.
“The pro-competitive, pro-consumer local broker marketplaces serve the best interests of buyers and sellers,” said NAR spokesperson Mantill Williams in an emailed statement. “Sellers making offers of compensation to buyer brokers gives first-time, low/middle-income, and all homebuyers a better shot at affording a home and professional representation to navigate this critical purchase.
The lawsuit took issue with a longstanding MLS policy called the Participation Rule—also known as the “Buyer Broker Commission Rule”— which mandates that brokers list buyer agent compensation as a prerequisite to listing a property on certain multiple listing services.
The plaintiff, Judah Leeder, bought a home listed on a local MLS with the help of an agent and alleged that the policy was anti-competitive and led to “artificially inflated, supra-competitive commission rates being incorporated into purchase prices for homes.”
The case also named Realogy Holdings Corp., HomeServices of America, Inc., HSF Affiliates, LLC, Long & Foster Companies, Inc., BHH Affiliates, LLC, RE/MAX LLC, and Keller Williams Realty, Inc. as defendants.
The lawsuit claimed that the companies “engaged in a conspiracy” that violated the Sherman Act.
Leeder’s case is similar to a pair of antitrust lawsuits challenging the same MLS rule—Moehrl v. The National Association of Realtors and Sitzer et al. v. National Association of Realtors et al.—but both cases argue that the rule directly harmed the home sellers.
While Wood ruled in favor of NAR in the Leeder case, she also appeared to agree with the notion that sellers were at risk by the alleged violations in her memo.
“The Court agrees that home sellers, as the direct purchasers of buyer-broker services, are necessarily more directly injured by Defendants’ alleged antitrust violations,” Woods wrote.
The memo also referenced the Moehrl case—which Woods also presides over—indicating that the plaintiffs in the antitrust cases are requesting the “exact injunction that Leeder requests here.”
“Thus, denying Leeder antitrust standing to seek injunctive relief will not ‘leave a significant antitrust violation undetected or unremedied,'” Wood wrote.
The ruling comes in the wake of a series of courtroom setbacks that NAR has had to deal with in recent weeks.
Another U.S. District Court Judge in Western Missouri granted a class certification order to a group of plaintiffs in the Sitzer lawsuit, potentially opening the door for hundreds of thousands of people to sue the NAR, local MLSs, and a list of franchisors named in the case.
On April 22, a federal court also dismissed NARs’ counterclaim against discount brokerage Real Estate Exchange, Inc, in an ongoing antitrust lawsuit REX filed against NAR and Zillow in 2021.
The issue stemmed mainly from Zillow’s decision to transition from a real estate search portal into its buying-and-selling entity earlier in 2021. Part of the shift included Zillow joining Multiple Listing Services and gathering listing data from the service’s IDX feeds.
According to Williams, while NAR was disappointed by the ruling, in that case, they noted that the court didn’t address the association’s allegations that REX made “False and misleading statements comparing REX’s services to those provided by brokers who are also REALTORS®.”
Williams also expressed disappointment in a recent ruling by a three-judge U.S. 9th Circuit Court of Appeals panel to reverse a lower court judge’s dismissal of an antitrust lawsuit filed by PLS.com against the NAR’s Clear Cooperation policy.
“The Clear Cooperation Policy advances equal opportunity in housing by ensuring listings are widely available and accessible to all,” Williams said. “Without the protections from the CCP, consumers would be disadvantaged because agents could refuse to give them or their agents access to those listings. We look forward to the next stage of this case, in which we will show the CCP is pro-competitive and pro-consumer and consistent with all laws and regulations.”
