Editor’s note: The COURT REPORT is RISMedia’s weekly look at current and upcoming lawsuits, investigations and other legal developments around real estate.
Compass accuses NWMLS of dragging its feet in lawsuit discovery
On Christmas Eve, Compass’s attorneys were not feeling the giving spirit from lawyers representing NWMLS as the two parties wrangle over discovery in their ongoing private listing-focused lawsuit, claiming that NWMLS has delayed and obfuscated producing important documents, and asking a judge to intervene.
“Enough is enough,” reads the filing. “Compass cannot rely on NWMLS’s unenforceable promises and is forced to ask this Court to order NWMLS to comply with its obligations.”
The dispute comes after Judge Jamal Whitehead previously denied a request by NWMLS to pause discovery in the case until more foundational issues were decided. According to Compass, NWMLS has slow-walked and delayed various responses to document requests going back to at least September. NWMLS previously accused Compass of a “mischaracterization of the facts” and said it had, in fact, met its obligations in the litigation.
But in the Christmas Eve filing, Compass said it needs court intervention to make sure the case isn’t further delayed.
“A clear pattern has emerged: NWMLS only begins to engage with Compass after Compass suggests that it will seek relief from the Court,” the filing reads.
Among the information Compass is seeking are communications related to NWMLS’s decision to cut off Compass’s IDX feed back in April, as well as communications from and to NWMLS CEO Justin Haag. The brokerage is asking for a court order mandating bi-weekly production of documents and metadata for already produced documents, among other things.
The lawsuit, filed by Compass back in the spring, alleges that NWMLS leveraged its rules to undermine Compass’s private listing-focused strategy. NWMLS has denied this, saying its policies—analogous but not identical to Clear Cooperation—are meant to promote transparency.
Whitehead had not ruled on Compass’s request at press time.
Buyer plaintiffs cite DOJ intervention in parallel commission lawsuit
After months of silence—and some indications that it was backing off its most aggressive positions—the Department of Justice (DOJ) under President Donald Trump is again addressing what it describes as “anticompetitive rules, policies and practices in the residential real-estate industry” as it intervened in yet another commission case earlier this month.
The next day, those same plaintiffs asked a judge to consider the DOJ’s arguments as a “supplemental authority” in another case, as the ripple effects from the latest “statement of interest” by federal law enforcement begin to promulgate.
“Plaintiffs conferred with the DOJ, and it does not oppose Plaintiffs’ use of the Statement in this case,” the plaintiffs wrote.
The DOJ’s statement was originally made in one of the splintered lawsuits that came when a handful of brokerages named in the main buyer suit (known as Batton) successfully argued that the Illinois-based court did not have jurisdiction over them. The case is known as Davis v. Howard Hanna, with Howard Hanna the only defendant.
But plaintiffs are asking another judge overseeing a lawsuit against HomeServices, making substantially identical allegations, to take the DOJ’s arguments into consideration. If accepted, the judge would be allowed to take the DOJ’s position into account when ruling on issues in the case, even though the DOJ is not a party to either lawsuit.
Both buyer cases mostly focus on the same rules and policies that were targeted in Burnett and the seller lawsuits, but allege that buyers also suffered economic losses from allegedly inflated commission costs.
eXp files reply brief urging dismissal of fraud claim in sexual harassment lawsuit
The fraud claim stems from a lawsuit filed by four women who allege they were drugged and sexually assaulted by two top eXp agents—Michael Bjorkman and David Golden—at company events. Plaintiffs claim that eXp executives made false promises about investigating their complaints.
In a court brief filed Dec. 26, defendant eXp defended its motion to dismiss plaintiff’s claim of fraudulent misrepresentation in Acevedo v. eXp Realty.
eXp argues that plaintiffs’ fraud claim should be dismissed for four main reasons: first, claiming the court never actually ruled that the claim was legally sufficient; it only allowed plaintiffs to add it to their complaint. Second, arguing that the claim is really just a contract dispute disguised as fraud. Third, asserting that plaintiffs failed to provide specific details required for fraud claims. And fourth, saying that defendants will need to conduct extensive new discovery on this late-added allegation, delaying the case further.
The defendants maintain that plaintiffs are essentially claiming eXp broke promises in their contracts by not properly investigating harassment complaints. They argue this is a breach of contract issue, not fraud, regardless of whether plaintiffs claim to have suffered emotional harm.
A hearing on this motion is scheduled for Jan. 9.
