Despite the solace of its recent courtroom victory, the National Association of REALTORS® (NAR) still has one of its most significant fights ahead. The organization has been pressured to provide expert reports and documentation from one commission-related case to another.
As both sides compile supporting documents and evidence in the Moehrl v. The National Association of REALTORS® case, a U.S. District Court Judge for Northern Illinois has ordered NAR and company to release opposition expert reports and deposition transcripts from the Burnett v. NAR lawsuit to the plaintiffs in Moehrl.
“Burnett, previously known as Sitzer v. National Association of REALTORS®, involves the same Defendants as here and challenges the same alleged anticompetitive restraints,” wrote Judge Andrea R. Wood in the order filed on May 11th.
In addition to NAR, Realogy, HomeServices of America, RE/MAX and Keller Williams are among the Defendants named. The lawsuit also names 25 different MLSs across the nation.
Like the Burnett case, the Plaintiffs in Moerhl are home sellers suing NAR and large real estate franchisors for allegedly conspiring to inflate commissions through NAR’s Buyer Broker Commission Rule—also known as the Participation Rule.
The MLS policy, which has been around since the mid-1990s, requires all brokers to “make a blanket, non-negotiable offer of buyer broker compensation when listing a property on a Multiple Listing Service (MLS).”
Plaintiffs in the Moerhl case alleged that the rule violated federal antitrust laws. Aside from damages, they also want “a permanent injunction” to stop NAR from requiring “sellers to pay the buyer broker.”
The lawsuit is similar to the Burnett case, filed in a U.S. District Court in the Western District of Missouri a month after Moerhl in April 2019. The former was recently granted class certification status days after oral arguments last month.
Plaintiffs in the Moerhl case are vying for their own class-action certification that could open the door to a potential detrimental blow to the real estate industry.
While the Burnett case features a “confidentiality order,” the court document indicates that that order “expressly includes outside counsel in Moehrl among the third parties to whom both confidential and highly confidential information may be disclosed.”
“Because the confidentiality order in Burnett appears to allow the disclosure of confidential information to Plaintiffs’ counsel, the Court sees no reason why Defendants should not be required to disclose the requested briefs and exhibits,” Woods wrote.
According to the document, the Defendants initially asserted that the documents, claiming the briefs and exhibits from the Burnett case lacked relevancy “because they reflect Defendants’ legal arguments related to different experts and named Plaintiffs than the ones here, and involve a different damages analysis.”
The court provided the defendants an opportunity to raise arguments supporting their points. However, NAR wrote in an email to RISMedia that it would “provide the requested material from the Burnett/Sitzer case to the Moehrl.”
“We remain confident we will ultimately prevail in each case because at the core, the claims against us are without merit, and we always act in the best interests of consumers and to advance competition,” said a NAR spokesperson.
NAR has maintained that it promotes and stands behind “pro-competitive, pro-consumer local MLS broker marketplaces” that are in consumers’ best interests.
“Listing agents 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,” NAR said. “It’s the free market that organically establishes commission costs within local real estate markets based on service, consumer preference and what the market can bear.”
