Antitrust regulators at the Department of Justice (DOJ) appear unsatisfied with the agreement struck between the National Association of REALTORS® (NAR) and plaintiffs in commission lawsuit class-actions, with a DOJ lawyer saying explicitly that they do not want any offers of compensation made by seller agents to buyer agents
At a court hearing today in the Massachusetts-based MLS PIN case (the first commission lawsuit to settle, which the DOJ has taken an outsized interest in), Jessica Leal, a lawyer representing the DOJ, called the NAR settlement “an improvement,” but implied it was not enough.
“We believe offers of compensation should not be made anywhere, but certainly not on the MLS,” Leal said.
The DOJ did not immediately respond to RISMedia’s request for clarification of this comment, or further details on its position regarding offers of compensation.
In a statement provided to RISMedia, NAR characterized the DOJ’s position as a negative for buyers and consumers in general.
“Prohibiting all offers of compensation will harm consumers, including by making it more costly for homebuyers to access capable representation and by reducing access to fair housing,” NAR said. “There is a great deal at stake for buyers and sellers all across the country, and NAR will continue to work, in and out of court, toward the best possible outcome for property owners in America and the professionals who represent them.”
In updating Judge Patti Saris, who is overseeing the case, on all the other developments happening around the industry as far as rule changes and other class-action settlement agreements, Leal and other lawyers involved in the case gave a first look at the DOJ’s response to the NAR settlement and changes enacted due to commission lawsuits.
Notably, Leal said the DOJ was not currently supporting or opposing the NAR settlement, even as other lawyers involved in the case said it would be hard for them to make decisions without knowing where the DOJ stood on the issue.
“The current dispute between us and the DOJ is, the DOJ is saying that they don’t want there to be any ability—well ideally in their statement they say they want to prohibit the seller from offering compensation at all,” said Seth Klein, a lawyer representing the plaintiffs in the MLS PIN case. “I think from the statement that (is) their ultimate position on what they think the world should look like, and I don’t necessarily disagree, but that’s an issue for a rule, a legislative change or a regulatory change.”
As the real estate industry has sought to move on from the class-action lawsuits, with settlements from almost a dozen big brokerages along with NAR winning immunity to most claims regarding rules and policies that allegedly inflated commission, the DOJ’s potential interest in these changes has continued to loom large.
Back in 2019, the DOJ launched its own separate investigation into many of the same NAR rules. That inquiry was shuttered for years, but was recently revived by an appeals court (though NAR continues to argue the DOJ legally is not allowed to restart it).
But regulators have also filed multiple “statements of interest” in the lawsuits targeting NAR and big brokerages, letting judges around the country know that the government has its own ideas or arguments about the issues at stake. Back in February, the DOJ filed one of these statements in the MLS PIN case, laying out a scenario where commissions would be “decoupled.”
That was before the NAR settlement, however, and it was unclear if regulators would view the changes made in that agreement—most notably, removing offers of compensation from the MLS—as enough.
Leal did not say explicitly what the DOJ was planning or what specific changes it might pursue beyond the NAR settlement, only that it would make a decision about whether or not to intervene sometime around October.
“The schedule for that is still far out so we’re still analyzing,” Leal said.
The DOJ is also rejecting a settlement proposed in the MLS PIN case, which differs tremendously from what NAR agreed to, in that it allows offers of compensation on the MLS but allows for commission negotiations using the listing service platform as well.
A third amended settlement agreement was recently provided to the DOJ jointly by plaintiffs and MLS PIN in the case, with Leal saying that agreement did not address all of the DOJ’s concerns and specifically noted that the NAR settlement is removing offers of compensation from the MLS.
“We haven’t finished understanding the third settlement,” she said.
At Leal’s request, Saris set the next hearing for the case to be held June 21, a week after the deadline for MLSs to opt-in to the NAR settlement, in order for the DOJ to gather more information—though it was not clear exactly how those opt-ins might affect the DOJ’s decision-making process.
Additionally, MLS PIN and plaintiffs in the case will be filing their official responses to the DOJ this Friday, seeking to address the big-picture concerns regulators have expressed over the MLS PIN settlement.
This is a developing story. Stay turned to RISMedia for updates.
Editor’s note: this story was updated at 2:45 p.m. eastern with a statement from NAR.
