Potential Paradigm Shifting Lawsuits – Class Action

How familiar are you with these current cases? March 6, 2019 - Six law firms representing Shorewood, Minnesota resident Christopher Moehrl filed a complaint related to the sale of his home on November 15, 2017, listed in NorthstarMLS. Moehrl entered into a listing agreement with his seller’s broker (a RE/MAX franchise) that specified he would compensate the listing broker for helping to market and sell the home for a commission of 6 percent of the purchase price.

The listing agreement further specified that the listing broker would keep 3.3 percent of the commission and share 2.7 percent with a buyer’s brokerage (which ended up being a Keller Williams Realty franchise.) The original complaint alleged that the National Association of Realtors (NAR), Realogy, RE/MAX, HomeServices of America and Keller Williams Realty are violating Section 1 of the US Sherman Antitrust Act, by requiring a “blanket, nonnegotiable offer of buyer broker compensation” when listing a property on the MLS, which the suit calls the “Buyer Broker Commission Rule.”

The lawsuit, filed in the US District Court for the Northern District of Illinois in Chicago, seeks class-action status on behalf of homesellers who paid a broker commission in the last four years (since March 6, 2015) in connection with the sale and listing of their home in one of 20 Realtor association-owned MLSs. Many of the listed MLSs are among the country’s largest, including Bright MLS in the Mid-Atlantic region and Stellar MLS in mid-Florida.

The MLSs are not listed as defendants in the lawsuit, but as co-conspirators because they allegedly adopt, comply with and implement what the suit calls the “Buyer Broker Commission Rule”. Although they are not currently defendants, any one of them could be responsible for paying damages and found as defendants at a later point.

In April 2019, another nearly identical complaint from homeseller Sawbill Strategic Inc, also in the US District Court’s Northern District of Illinois. On June 16, 2019, the Moerhl and Sawbill complaints merged and added six additional homeseller plaintiffs in a consolidated and amended suit.

The same month a third homeseller, Sitzer and Winger, filed another suit, in the Western District of Missouri, obviously copied from the Illinois complaints. (class definition covers sellers who listed homes in 4 Mo. MLSs)

September 6, 2019 Redfin begins displaying all buyer-broker commissions on all its Seattle listings on its website. October 1, 2019 Redfin, Windermere Real Estate and Coldwell Banker Bain begin displaying buyer-broker commissions on all Northwest MLS listings on their websites.

NAR's motion to dismiss and the case will proceed to the next phase of the litigation, discovery.

Keep your eyes and ears tuned.

What if commission cooperation between brokers was forbidden or agreed to as a result of these law suits?

How would you adjust?

Listing Contracts with Buyers could become the norm... Find more infor here: ihttps://www.atlantarealtors.com/resources/news/detail/status-update-for-moehrl-v-nar-litigation