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A federal judge denied a request from homebuyer plaintiffs to add state law claims to their antitrust complaint at a court hearing on Thursday.
Judge LaShonda Hunt of the U.S. District Court for the Northern District of Illinois held a hearing Feb. 13 for a case known as Batton 1 (formerly, Leeder), which was originally filed in 2021 and seeks class-action status.
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The suit names the National Association of Realtors, Anywhere, RE/MAX and Keller Williams as defendants and claims the same NAR rules at issue in homeseller cases nationwide have resulted in higher prices paid by buyers in violation of antitrust laws.
In December, the eight Batton 1 plaintiffs filed a motion asking to amend their complaint to add 24 new named plaintiffs and add 18 new state law claims on top of the 40 such claims that still stand.
This is at least in part because a separate federal court in Missouri granted final approval to settlements of homeseller claims for all of the defendants last year and prevented sellers who also bought homes from suing as buyers over the same challenged rules, drastically cutting down the number of class members should any buyer commission suits receive class-action status. Those settlements are currently on appeal in the Eight Circuit Court of Appeals.
State law claims are also particularly pertinent to cases in which homebuyers, rather than homesellers, are making antitrust claims because as indirect purchasers of buyer brokerage services, buyers are not allowed to sue under federal antitrust laws, but may sue under state antitrust laws.
LaShonda A. Hunt
Still, at Thursday’s hearing, Hunt said she was “a little surprised and confused” by the plaintiffs’ request.
“I expected new plaintiffs … who could step in because there was this question about the scope of the releases that is now up on appeal,” Hunt said.
“What I did not expect was a slew of new claims.”
She noted that the previous judge handling the case, Andrea Wood, had set a schedule for the case and that filings to certify the class are due in June.
“The pleadings are set, and we have a schedule, and class cert motions are due in four months, and so I just don’t understand why all of these new claims are coming up now and were not raised at the time that the amended complaint was filed [in July 2022],” Hunt said.
Plaintiffs’ attorney Randall P. Ewing, Jr. of Korein Tillery told Hunt that the additional claims under state antitrust and consumer protection laws were identified over the last year and have been filed in other, similar buyer commission suits filed by the same law firm.
“So it was mainly to align it,” Ewing said.
Still, he told Hunt that if she was inclined to allow the new plaintiffs but not the new claims, “that’s certainly a middle ground that could address part of plaintiffs’ concerns.”
Ewing added that the plaintiffs were collecting transaction-level data from multiple listing services and that they weren’t sure if their experts would be able to process that data by the class certification deadline in June, but that the plaintiffs did not want to change the deadline at this point.
An attorney for Anywhere, Stacey Anne Mahoney of Morgan, Lewis & Bockius, told Hunt “the issues with regard to the new plaintiffs are fewer” than with the new claims, but that the request nonetheless “strikes us as being a little bit dilatory,” or unnecessarily delayed.
“It really seems particularly if they’re not going to be permitted to add new claims, which we feel very strongly about, that all this seems to do is to proliferate the amount of discovery that needs to be taken in this case by the defendants in advance of the class certification briefing that is scheduled for four months from now,” Mahoney said, adding that this was the first she’d heard about the plaintiffs seeking data from MLSs.
In the end, Hunt told the plaintiffs’ attorney, “I’m not inclined to allow additional claims at this point,” noting the plaintiffs had had “repeated opportunities to fix the complaint” and that “trying to shore up the named plaintiffs” because of the settlements’ scope is not “a reason to disturb the pleadings in this case at this point.”
“I think that just expands the scope of this case at too late of a point in time, and it will only delay discovery further,” she said.
“I just don’t think that that makes sense in a 2021 case.”
She also questioned whether the plaintiffs need to add all 24 new plaintiffs to the case.
“Is that going to spawn another round of briefing on the pleadings at a time when I expect the parties to be focused on discovery and moving this case forward towards a ruling on class certification?” she asked.
Hunt suggested the parties figure out whether they could agree on which new plaintiffs could be added to the case before she rules on the plaintiffs’ motion for leave to amend.
“We would be happy to discuss with the defendants if there is a way to deal with the new plaintiffs that would not burden the litigation,” Ewing told Hunt.
“Our primary concern is for class certification. That there’s enough plaintiffs for the various states that at class certification, the classes’ interest can be represented.”
Hunt replied that the plaintiffs’ always have the option to ask to amend the complaint to add new plaintiffs.
“That’s common in these cases, and so I don’t think that you’re waiving any right if we keep the complaint as-is and you move forward in discovery and ultimately determine that you need some additional named plaintiffs before we get to a class cert determination,” Hunt said.
Hunt gave the parties two weeks, until Feb. 27, to submit a joint status report letting her know whether they were able to reach an agreement. She also set March 14 as the deadline for the parties to submit their next joint status report on the progress of discovery in the case and of any settlement discussions they may be having.
