In a move likely to inspire deja vu, United Real Estate Group (UREG) is looking to join the list of former defendants in a massive homebuyer commission lawsuit that continues to wage on.
The real estate holdings company filed a motion in the U.S. District Court in Northern Illinois on Friday to dismiss all claims against it in the Batton homebuyer lawsuit. Attorneys representing United Real Estate argue that the company has no substantial connection or presence in Illinois—where Batton is filed—and challenge allegations of misconduct in the amended complaint made by the plaintiffs.
The motion also states that United Real Estate will join the joint motion to dismiss the complaint filed by other defendants.
“This Amended Complaint fails to meet the basic standards that the federal rules require,” the motion reads. “It includes no facts to support any wrongdoing by UREG. Instead, it relies on innuendo and impermissible group pleading.”
Amid the sea of litigation plaguing real estate, most class-action commission lawsuits have been filed by recent homesellers. On the other hand, some suits stem from homebuyers mirroring the sellers’ accusations—big brokerages conspired with the National Association of REALTORS® (NAR) on rules that inflated commissions.
The Batton case—formerly known as Leeder—is the largest buyer-side commission lawsuit aiming at the industry’s most prominent real estate companies for alleged violations of antitrust laws in 35 states.
Lawyers representing United Real Estate argue that the 54-page amended Batton complaint only has “cursory allegations” against the real estate company and fails to make a solid case against it or its alleged conduct in Illinois.
“The factual allegations concerning UREG are so sparse that they can be easily enumerated,” the motion reads.
Most notably, the motion emphasizes that United Real Estate is not based in Illinois—it’s headquartered in Missouri—despite the complaint claiming that the holdings company has a location in Chicago, which lawyers claim refers to United Real Estate Chicago, an indirect and partially owned joint venture.
United Real Estate also notes that contrary to Batton’s claims that it is a real estate brokerage with locations nationwide, it indirectly owns brokerage subsidiaries; the company is not a real estate broker or in control of its franchises’ day-to-day actions.
“The irrelevant background facts regarding UREG’s size do not give rise to any inference of liability,” writes United Real Estate lawyers in the motion. “They may, however, support an inference that UREG was named in this suit simply because Plaintiffs believe the company has deep pockets.”
The motion also scrutinizes allegations directed at the company that suggests United Real Estate participated in an alleged anticompetitive conspiracy with NAR via Steve Wagner, United Real Estate Group’s executive vice president of Training, Education, and Development, who also served on NAR’s Board of Representatives.
Batton argues that Wagner, along with other executives from the list of defendants, “participated in and implemented the conspiracy” through their governance of the association.
United Real Estate argues in its motion that Wagner’s role as a board member doesn’t sufficiently support claims that he or the company had any participation in an alleged conspiracy or anticompetitive conduct.
“None of these few facts, on their own or taken together, suffice to support the jurisdiction of this Court or the massive allegations of wrongdoing the Amended Complaint alleges,” the motion reads.
As such, United Real Estate is hopeful that Judge Andrea R. Wood, overseeing the case in the Northern District of Illinois, will opt to dismiss the claims similarly to how she did with HomeServices of America a few months ago.
The company employed the same jurisdictional technicality that United Real Estate uses to dismiss the litigation. That legal victory was short-lived for HomeServices. It ultimately found itself on the receiving end of another lawsuit refiled by the lawyers representing Batton plaintiffs in a new federal court.
United Real Estate did not immediately reply to RISMedia requests for comments on this story.
This is a developing story. Stay tuned to RISMedia for updates.
