New State-Level Commission Suits Target Smaller Brokerages

Another week, another commission lawsuit (or three).

As bigger, national lawsuits continue to move slowly through the courts, attorneys in three states have decided to emulate the plaintiffs in Burnett, and bring very similar claims—that REALTOR® associations are conspiring with big brokerages to inflate commissions—to their regions.

The Burnett case, which saw a jury award $1.8 billion to recent homesellers, focused on practices and entities that are national, but only looking at transactions that occurred in Missouri. While some lawyers, including those who successfully argued Burnett, are trying to take those same arguments nationally, attorneys in Pennsylvania, Florida and Georgia recently chose to move forward in more limited geographic regions. 

Both the Pennsylvania and Georgia cases were filed in federal court in those states, while the Florida case was filed in a state superior court. All target smaller, local real estate companies, along with one MLS and several big corporate brokerages.

RISMedia reached out to lawyers for the plaintiffs in all three cases, as well as the Georgia and Florida REALTOR® associations and West Penn MLS, which was named in the Pennsylvania suit.

Attorneys for the plaintiffs had not responded at press time. West Penn referred questions to their attorney, who had not responded to requests for comment at press time.

A spokesperson for Florida REALTORS® said the organization would have a response to the lawsuit soon, while a representative of Georgia REALTORS® said staff were at a conference this week, and referred questions to the organization’s communications department, where a voicemail was not returned at press time. 

For the most part, these new lawsuits offer very little in terms of new accusations or information. All are filed on behalf of recent homesellers (though the Florida suit was filed by a company rather than an individual), seeking to certify a class based on people who sold homes on REALTOR®-owned or -affiliated MLSs. All of them allege a conspiracy between brokerages and the associations that set and enforce rules—namely, rules requiring offers of buyer compensation—as well as alleging “steering,” where buyer agents prevent clients from viewing properties with lower commission offers.

Notably, the Pennsylvania suit directly cites the Burnett verdict, calling it a “historic” judgment and proof that the rules and conduct in question violate federal antitrust laws.

“Like the defendants in Burnett, Defendants’ conduct unlawfully restrains trade and competition, harms homesellers in the form of inflating the cost of selling a house,” that suit reads.

Maybe more importantly, these more local lawsuits are targeting much smaller brokerages. While Burnett and most of the other national suits name multi-million (or billion) dollar companies, these lawsuits are going after brokerages with just a few dozen agents. Some are affiliated with deep-pocketed national brands, but not all.

Realty ONE Horizon, named in the Pennsylvania suit, lists only about 130 agents on its website. Independent Dorsey Aslton, with 275 agents across three offices, is named in the Georgia suit.

The 15 brokerages named in the Florida suit appear to be almost entirely made up of independents, though the smallest has 655 agents, according to the lawsuit.

And unlike Burnett, the Pennsylvania suit names an MLS as a defendant, meaning that a judgment in favor of the plaintiffs could result in direct monetary damages against West Penn MLS, or court orders disallowing certain practices or rules. That suit claims that West Penn leveraged its power as “virtually the only MLS” in the region, and cites a policy mirroring the National Association of REALTORS®’ (NAR) so-called “clear cooperation” policy, requiring members to put listings on the MLS.

Challenges to “clear cooperation” were not central to the Burnett case, and have so far not been foundational to other class action commission lawsuits—though a potentially resurgent Department of Justice investigation has homed in on it, and a larger lawsuit filed by a listing-service startup is using similar arguments.

The Georgia and Florida suits both mirror Burnett in using MLSs to argue for the existence of a conspiracy, without naming them as defendants. The Georgia suit specifically refers to 12 separate MLSs, while the Florida suit names every single local association and MLS that is affiliated with Florida REALTORS®. 

“Participation in the MLS system is near universal in the industry. Many buyer-agents will not show a property to prospective buyers unless the seller-broker has listed that property on the MLS,” the Florida lawsuit claims.

That suit also notes that executives at every one of the defendant brokerages has served or currently serves in leadership roles for Florida Realtors® or other REALTOR® boards.

In the Burnett trial, plaintiffs spent significant time showing evidence of how big brokerages worked with or influenced NAR in making rules, as they successfully convinced the jury of a conspiracy. 

The Georgia suit is the only one of the three to also target big companies, including NAR and other companies that have been named in other national lawsuits, including RE/MAX, Anywhere, Keller Williams and HomeServices of America. 

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