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At the request of real estate giant Anywhere and over the objections of the National Association of Realtors, a trial for a federal class action commission lawsuit that could rock the real estate industry has been postponed to an undetermined date in 2023.
Michael Ketchmark
On Dec. 13, Judge Stephen R. Bough of the U.S. District Court in Western Missouri granted a motion to continue from Anywhere (still known as Realogy in court filings) to delay the three-week trial’s start date, which was previously set for Feb. 21, 2023. Bough said the court would choose a new three-week trial date “in late 2023,” but did not provide a specific date.
“Plaintiffs’ counsel understands and respects the court’s decision,” Michael Ketchmark of Ketchmark & McCreight PC, attorney for the plaintiffs, told Inman in an emailed statement.
“Despite a short delay we still represent over 500,000 Missourians and one thing is certain, the day of accountability for these defendants is coming.”
The postponement is the latest development in Sitzer/Burnett, a case originally filed in 2019 that won class-action status in April. The suit names NAR and major real estate franchisors Realogy, Keller Williams, RE/MAX and HomeServices of America and its subsidiaries BHH Affiliates and HSF Affiliates as defendants.
The suit alleges that some NAR rules — including one that requires listing brokers to offer buyer brokers a commission in order to list a property in a Realtor-affiliated MLS — violate the Sherman Antitrust Act by inflating seller costs.
The case’s class certification means that hundreds of thousands of homesellers in four multiple listing service markets in Missouri can ask to be reimbursed for $1.3 billion in commissions they paid to buyer agents in the past eight years — plus potential treble damages that could put the total damages in the case at around $4 billion.
In July, Bough denied motions from the defendants to compel the plaintiffs into arbitration rather than have the court decide the case. HomeServices and its subsidiaries subsequently appealed that decision to the U.S. Court of Appeals for the Eighth Circuit. In the meantime, Bough granted a stay on any claims raised by unnamed class members who executed a listing agreement containing a binding arbitration clause with a subsidiary of HomeServices while that appeal is pending.
Because of that stay, Bough agreed with Realogy to postpone the trial until HomeServices’ appeal is decided.
“Despite the plaintiffs arguments to the contrary, this Court believes that all parties need to be present throughout the case if there is to be joint and several liability as argued by plaintiff and that the Eighth Circuit currently has jurisdiction over the stayed claims,” Bough wrote in the court’s docket.
“Joint and several liability” means that all of the defendants are held independently responsible for 100 percent of the damages of the alleged conspiracy if that conspiracy is proven.
In a statement forwarded to Inman by a reader, NAR revealed it was not happy about the postponement.
“We did not support this delay for various reasons, including that we have been singularly focused on preparing for trial and are confident we would prevail,” the statement reads.
“That said, we look forward to our day in court. Until then it is important to continue raising awareness that the U.S. model of local broker marketplaces has long been – and is still – viewed as the best value for consumers around the world.
“[L]ocal broker marketplaces provide sellers equal access to the largest possible pool of potential buyers and create the greatest number of housing options for buyers in one place without hidden or extra costs. Listing brokers making offers of compensation to buyer brokers also gives first-time, low/middle-income and all homebuyers a better shot at affording a home and professional representation. We will continue to ensure that consumers’ best interests are served in all of NAR’s work.”
“Local broker marketplaces” is how NAR often refers to MLSs. NAR did not respond to questions asking for details about the statement or of what NAR thought of Realogy’s arguments in favor of the postponement, instead providing another, virtually identical statement.
Keller Williams, RE/MAX, and HomeServices declined to comment for this story. Realogy did not respond to a request from Inman for comment.
Editor’s note: This story has been updated to note that HomeServices declined to comment.
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