One of the law firms behind the original commission lawsuits has just announced an “investigation” into “recently uncovered practices” in the real estate industry that allegedly began in 2021—suggesting the possibility of more large-scale legal action against the industry, though so far details remain scarce. However no further details have been released yet, including if the alleged practices are new or different from the original claims.
In a release that went out yesterday evening, the law firm Hagens Berman—which served as co-lead counsel of the Moehrl lawsuit, a case that preceded Burnett—urged recent homesellers to contact the firm if they sold a home since 2021 “with the assistance of an online real estate agent.” Although additional information linked for consumers in the announcement doesn’t specify online agents, saying only, ‘if you worked with an agent to sell your home” in the timeframe.
It was not immediately clear what the practices in question were, or how this “investigation” overlapped with the allegations in the commission class-actions. The release offered no other details regarding the definition of an “online real estate agent,” only writing that “(b)rokers…may be violating consumer rights and causing home sellers to overpay.” In other places, the release urged any seller who worked with a real estate agent, omitting “online,” to contact the firm, also asking if the buyer used an agent.
“Our investigation is about making sure the real estate market is fair and just for consumers,” said Steve Berman, managing partner of Hagens Berman, in a statement. “If we find that consumers were misled, we’re prepared to act to hold companies responsible.”
It did not appear that any lawsuit had been filed at press time, and many “investigations” announced by large law firms never materialize in the courtroom. Hagens Berman did not respond to detailed questions from RISMedia regarding the “investigation” at press time.
The National Association of Realtors® (NAR) is not named specifically as a target of the investigation. In a statement shared with RISMedia, an NAR spokesperson reiterated the organization’s commitment to “a fair, transparent, and competitive real estate marketplace.”
“NAR provides educational resources to our members and consumers to ensure the practice changes stemming from the settlement are implemented in good faith,” the spokesperson added.
Back in 2019, Hagens Berman essentially kicked off the class-action commission lawsuit, filing the Moehrl lawsuit in Illinois, alleging that NAR conspired with big brokerages to inflate commissions through policies like the Participation Rule, which required mandatory offers of compensations to buyer agents. Essentially all of those rules have since been repealed.
The Burnett lawsuit, filed months later by much smaller law firms in Missouri, made it to trial before Moehrl did, although Hagens Berman joined in the subsequent nationwide copycat suits, and received attorneys fees from the over $1 billion paid out by NAR and brokerages.
The few details in the release are notable. Specifically, the release refers to homesellers—whose claims regarding inflated commissions based on mandatory offers of compensation are largely covered by previous settlements. It also specifies that the unnamed practices “may affect consumers nationwide.”
Hagens Berman is a prolific class-action firm, with notable antitrust wins in cases against the NCAA and Google. The firm is also currently suing Zillow on behalf of investors over alleged misleading statements regarding its iBuying business, with class certification in that case currently under appeal.
