A U.S. District Court Judge last month tossed out antitrust charges filed by buyers of vacant lots in four separate class-action lawsuits filed against Idaho real estate brokerage companies, though lawyers for the buyers are contesting the decision.
The lawsuits allege that buyers were charged excessive real estate commissions when they purchased home lots from the brokerage companies, and that the commissions charged for the lot sales were also tied to commissions that were based on the cost of homes to be built on those lots. Because conspiracy among the companies was not alleged in the cases, they were filed as separate lawsuits.
U.S. District Court Judge B. Lynn Winmill found that evidence was lacking to support the claims that the companies’ real estate commission practices in tying the sale of the land lots to the sale of homes on the lots represented an illegal arrangement.
While lawyers for the buyers suggest “that some (buyers) may have wanted to purchase the tied product from another Realtor,” the court found no evidence “for believing that such individuals actually exist.” The court’s order supports motions by the lawyers for the real estate brokerage companies to dismiss the antitrust allegations.
Lawyers representing the buyers have argued, though, that they need to gather more evidence about the class of buyers in the lawsuits — and that the court has not allowed them to acquire all of the information about buyers that they sought in earlier court filings.
“Without those documents and without even knowing who those class members were, we didn’t have an opportunity to show that others would have shown that tied service,” said Craig Spiegel, a lawyer representing buyers in the lawsuits.
Spiegel said that lawyers representing the buyers in the lawsuits are asking the judge to withdraw judgment on the antitrust claims and allow the opportunity to present more evidence.
In a Jan. 22 order, the court allowed lawyers representing the buyers to proceed with a new motion in the lawsuits. And the lawyers, in a Feb. 8 filing, are urging the court to allow them to gather more evidence from the real estate brokerage companies named in the lawsuits. Lawyers for the brokers have until Feb. 25 to respond to that motion.
The four class-action lawsuits are: Robert and Renae Bafus v. Aspen Realty Inc.; Curtis and Gwendolyn Blough v. Holland Realty Inc.; Gary and Shawna Yasuda v. Sel-Equity Co.; and Dave and Emily Merrithew v. Park Pointe Realty Inc.
Eugene A. Ritti, a lawyer who is representing Holland Realty in one of the lawsuits, said in a statement today, “We believe the district court properly dismissed the antitrust claims filed … against the realty companies, since the plaintiffs always were unable to establish, as the law requires them to do, any impact upon competition.”
He also stated that the latest court filing by the buyers’ lawyers “is moot in light of the dismissal of the antitrust claims,” and that he expects the court to reaffirm this in a future ruling. “Should the plaintiffs then ask the appellate court to review the dismissal of the antitrust claims, we are convinced that it, too, will find the plaintiffs failed to establish any antitrust claims.”
In his order, the judge found that lawyers for the buyers “seem to want the court to infer that because (they) have not discovered the existence of all class members, it is likely there are class members who wanted to purchase the tied product from another source.
“That, however, is an unreasonable inference. The more reasonable inference is that the unknown class members, like all of the class representatives in all of the cases, wanted to purchase the tying product without having to purchase the tied product at all.”
And the act of tying the real estate commissions for the lot sales to the home cost on those lots was not in itself a violation of antitrust law, the judge found. The tying arrangement would be considered illegal, though, if this tying arrangement prevented other real estate brokerage companies from selling services related to the construction of homes on those vacant lots, according to the judge’s decision.
The lawsuit against Coldwell Banker Aspen Realty alleges that a couple buying a home in 2000 were charged a 6 percent buyer’s broker fee based upon a $151,000 cost of a lot and the home to be constructed on that lot. The commission on the lot itself, which cost $34,000, should have been $2,040, the lawsuit alleges, while the actual commission charged was $9,060.
The couple “did not want or need the services of Coldwell Banker Aspen Realty for construction of the house in that (they) had independently secured their own builder, worked with their own architect and developed their own plans,” and they “did not want to use the services of Coldwell Banker Aspen Realty on matters related to the construction of the house, and were upset over the amount of the commission being demanded,” the lawsuit also alleges.