New California Commission Lawsuit Takes Aim at MLS, Small Associations

With the number of distinct commission-focused class action lawsuits quickly climbing in the wake of the landmark Burnett verdict, the allegations have not changed. Plaintiffs—largely recent homesellers—continue to echo the Burnett claims that they were forced to pay supracompetitive commissions due to National Association of REALTORS®’ (NAR) rules that were supported and enforced by brokerages.

Last week, a suit filed in the Northern District of California offered another highlight reel of these claims, using the same evidence and arguments—commission rates in other countries, an NAR-funded 2015 report and the close relationship between NAR and MLSs.

But this suit explicitly names both the local listing services, BAREIS MLS, as well as the small REALTOR® associations that partially own it, as defendants (along with big brokerages like RE/MAX, eXp and Keller Williams). That means those entities could be liable for paying damages or be forced to change policies.

Most other commission-focused lawsuits so far have followed the lead of Burnett, and used MLSs and local associations as foils for their broader arguments against deep-pocketed corporate brokerages and NAR, without directly naming them as defendants.

Maybe even more notably, BAREIS MLS is partially broker-owned, something the lawsuit readily acknowledges while claiming this makes no difference in the alleged conspiracy.

“Throughout the Class Period, the BAREIS MLS board, and virtually all committee members and broker owners were all NAR members and members of at least one of the Realtor Association Defendants,” the lawsuit reads. “Access to BAREIS MLS is conditioned on members’ agreement to follow the BAREIS MLS rules.”

Those associations are not huge metro or state-wide REALTOR® associations, either. According to their websites, the four associations named (Marin Association of REALTORS®, North Bay Association of REALTORS®, Northern Solano County Association of REALTORS® and Solano Association of REALTORS®) claimed between 1,400 and 3,600 members.

The reason for going after the small associations (along with NAR) was not immediately clear. Lawyers for the plaintiffs could not immediately be reached for comment. Another recent lawsuit in Pennsylvania also names an MLS, but does not target the local associations that own it. 

MLS leaders have posited that regulators may seek to force some measure of separation between NAR or REALTOR® associations and MLSs. The Department of Justice, in a dormant investigation that looks likely to be revived, could make this kind of change a priority.

But there is nothing stopping recent sellers (or buyers) from suing MLSs, associations or smaller brokerages regardless of ownership or affiliation, using the roadmap laid out in the Burnett case. It remains to be seen whether judges or juries will make a distinction in these sorts of cases.

This is a developing story. RISMedia will have more updates as they are available.

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