Editor’s note: The COURT REPORT is RISMedia’s weekly look at current and upcoming lawsuits, investigations and other legal developments around real estate.
It’s been yet another week of riveting court case drama surrounding the National Association of REALTORS® (NAR) and powerhouse brokerages, in addition to demands by the Department of Justice (DOJ) regarding decoupled commissions as well as a delay of the Moehrl class-action suit.
Here’s a recap:
Nosalek v. MLS PIN
Nosalek v. MLS PIN was paused Thursday morning until a consolidation decision is reached, although it was reopened later in the afternoon by the DOJ, as HomeServices of America, Keller Williams, RE/MAX and Anywhere are accused to have conspired to inflate commissions, and the DOJ is hoping to reopen a civil inquiry to pry at NAR.
According to court filings, “As set forth in Plaintiffs’ Motion, the uncertainties surrounding the MLS PIN settlement and the DOJ’s possible objections warrant the requested stay. (MLS PIN has consented to the stay in addition to Anywhere, RE/MAX and Keller Williams, meaning that four of the five Defendants here support the stay.) HomeServices argues that neither the MLS PIN settlement nor the DOJ’s concerns are ‘new development.’”
DOJ, Nosalek v. MLS PIN
Lawyers from the DOJ issued a filing opposing the Massachusetts-based MLS’ agreement to rule changes that have taken the real estate industry by storm over the past few years—allowing buyer’s agents to take compensation offers of $0, and most notably, informing consumers that commissions are negotiable.
As reported by RISMedia last week, the DOJ says that this is “largely cosmetic,” and states the position that real estate markets are likely illegally constrained as long as commissions are paid by sellers.
“Preventing sellers and listing agents from setting buyer-broker commissions would promote greater price competition and innovation in the market for brokers’ services,” the DOJ lawyers wrote. “And most, if not all, buyers would likely prefer a fee structure that does not reward their broker for helping them to pay more for a home.”
The DOJ is awaiting an appellate court’s decision on whether it can reopen a civil inquiry into NAR rules, and seemingly, antitrust regulators are anxious to remain involved in the litigation—using to their advantage a 2005 law that allows intervention in class-action settlements deemed “inequitable.”
Moehrl class action
The Moehrl class-action suit involving NAR, Keller Williams and HomeServices of America has new delays, as file objections are now required by plaintiffs on February 26, by defendants to expert witnesses on April 15, and the final motion for plaintiffs to respond is May 13.
The delay was mutually agreed upon due to Easter.
Consolidation of all commission cases
A hearing in front of the Judicial Panel on Multidistrict Legislation (MDL) has been arranged for March 28, 2024, and the counsel will present their oral argument at 8 a.m. to help the panel make a decision on an appropriate estimate of time needed during the hearing. Oral argument will officially commence at 9:30 a.m.
Court documents indicate:
“The Panel carefully considers the positions advocated in filings with the Panel when it allocates time to attorneys presenting oral argument. The Panel, therefore, expects attorneys to adhere to those positions including those concerning an appropriate transferee district. Any change in position should be conveyed to Panel staff before the beginning of oral argument. Where an attorney thereafter advocates a position different from that conveyed to Panel staff, the Panel may reduce the allotted argument time and decline to hear further from that attorney.
- The Panel expects attorneys presenting oral argument to be prepared to discuss what steps they have taken to pursue alternatives to centralization including, but not limited to, engaging in informal coordination of discovery and scheduling, and seeking Section 1404 transfer of one or more of the subject cases.
- A transcript of the oral argument will be filed in each docket when it becomes available…”
