Editor’s note: The COURT REPORT is RISMedia’s weekly look at current and upcoming lawsuits, investigations and other legal developments around real estate.
Judges deny lawsuit consolidation push
Citing the recent National Association of REALTORS® (NAR) settlement agreement, a panel of six judges denied an attempt by plaintiffs in commission-focused class-action lawsuits to consolidate all the copycat cases under one judge, saying that the “procedural posture of the litigation” makes that effort inappropriate.
The ruling leaves the 20-something Burnett copycat cases filed all over the country to proceed under different judges, schedules and procedures—a scenario that will almost certainly turn out to be a mixed bag for the real estate industry at large, as different brokerages continue to litigate claims all across the country filed by recent homebuyers and sellers alleging that real estate rules violated antitrust laws.
Initially filed by the same plaintiffs behind Burnett back in December, the effort to consolidate commission cases appeared to be a straightforward one, with NAR supporting centralization of cases as well (though it was later forced to withdraw its participation in the consolidation case by the settlement agreement).
It’s unclear what consolidation may have meant for each of these brokerages, however, the Judicial Panel on Multidistrict Litigation (MDL) may change its outlook in the future, as this decision was seemingly based on technical grounds rather than on its merits.
Judge denies plaintiffs request for $4.7 billion
Judge Stephen R. Bough, who is overseeing the Burnett case, today denied a request by plaintiffs lawyers that he immediately enter a massive monetary judgment against HomeServices, the last defendant in the case that has not entered into a settlement agreement.
“Given that this Court should seek to prevent piecemeal appeals and any appeal related to the settlements would relate to the judgment against the HomeServices Defendants, the Court finds that Plaintiffs have failed to show that certification of the judgment against the HomeServices Defendants is warranted at this time,” Bough wrote in an order.
Plaintiffs had argued that Bough should immediately treble and finalize the $1.8 billion judgment reached by a jury back in October, pinning the lion’s share of that on HomeServices. They had also asked for retroactive interest on the judgment, also to be paid by HomeServices.
Bough found those arguments unconvincing, noting that final numbers could still be affected by the settlements in the case—which themselves are not finalized. He added that there was also no particular urgency to finalize the judgment.
“Plaintiffs do not assert a danger or hardship other than the settlement monies will not be available to Plaintiffs for a few months more,” Bough wrote.
Two amicus briefs filed in MLS PIN case
Two new amicus briefs—legal briefs filed by a party who is not part of a legal proceeding but is acting in support of one of the involved parties—were filed on April 4 in the Nosalek v. MLS Property Information Network, Inc. (MLS PIN) et al commission lawsuit, by the Council of Multiple Listing Services (CMLS) and Northwest Multiple Listing Service (NWMLS).
The amicus briefs filed were in response to the Department of Justice’s (DOJ) statement of interest (SOI). An excerpt from the statement read, “Broker-members of MLS PIN likely collected more than $2 billion in fees in 2022 for residential real estate in Massachusetts. These stubbornly high broker fees owe in large part to rules and practices perpetuated by multiple listing services like MLS PIN.”
The initial complaint, filed in Massachusetts District Court, is that big brokerages, NAR and MLS PIN, conspired to inflate commissions paid by sellers, mostly through the “participation rule,” requiring mandatory offers of compensation to buyer agents.
CMLS argues that its member MLSs—including MLS PIN—provide accurate information about current listings, “creating a real estate information resource of unmatched transparency,” and that the DOJ lacks evidence for their criticism of the proposed settlement policies, violating principles of the Sherman Act, an 1890 antitrust law that allows free competition between those engaged in commerce. CMLS also argues that offers of compensation to buyer brokers are lawful.
The MLS PIN case was paused in February, pending the consolidation ruling, which came last friday. Additional responses to the DOJ from the parties involved in the case are expected within the week. The DOJ has not yet directly responded to these newly filed briefs.
HomeServices delay
HomeServices of America, the last firm of the original four brokerages targeted by class-action, commission-focused lawsuits, has requested a two-week extension to review all pending court motions.
Court documents stated, “The HomeServices Defendants respectfully request a two-week extension of time, to and including May 7, 2024, by which to reply in support of all pending post trial motions.”
Grace and motion to dismiss
Plaintiffs in one of the Burnett copycat cases—namely, Grace v. National Association of REALTORS®, filed in California—are requesting a delay in the case, something proving concerning for BAREIS, an MLS defendant, as the delay would push a key ruling beyond the scope of time for when they need to make a decision regarding whether or not they will opt into the NAR settlement.
“By her administrative motion, however, Plaintiff now seeks to further extend the pall of uncertainty which hangs over BAREIS. BAREIS strongly objects to extending the current schedule (which Plaintiff herself asked for over Defendants’ objections), because it will push the motion to dismiss hearing date beyond the date which BAREIS must decide whether to opt into the National Association of REALTORS® nationwide settlement. BAREIS is fully justified in seeking a hearing on its motion to dismiss as quickly as possible, and, therefore, Plaintiff’s administrative motion must be denied as to BAREIS. BAREIS does not oppose the Plaintiff’s administrative motion as to the other Defendants,” lawyers wrote.
NAR’s settlement agreement allows some brokerages and MLSs not covered by its terms to pay an additional fee in order to gain immunity from seller lawsuits.
Defendants believe that BAREIS has been wrongly named in the suit, and their motion to dismiss should be honored, claiming that they are not “owned” by anyone, and not affiliated with NAR and its rules of operation, “which caused NAR to be named as a defendant in the Missouri class action and led to a plaintiffs’ verdict in October 2023.”
