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After two years, a federal judge has granted preliminary approval to a proposed settlement between homesellers and a large New England multiple listing service after the U.S. Department of Justice dropped its opposition to the deal.
Judge Patti B. Saris of the U.S. District Court for the District of Massachusetts granted the preliminary approval at a brief hearing Tuesday morning in a homeseller commission lawsuit known as Nosalek. The ruling puts the homeseller plaintiffs and defendant MLS Property Information Network (MLS PIN) one step closer to putting the case, which was filed in December 2020, behind them.
Melissa Lindberg
“Throughout this time, both in defending the case on its merits and in attempting to resolve the dispute through a settlement, we’ve remained committed to advocating for what we believe is in the best interest of consumers: a real estate market built on transparency, choice, and fairness,” MLS PIN spokesperson Melissa Lindberg told Inman in a statement.
“We reached a point where a difficult decision had to be made, and we agreed to remove the option to display compensation on our Pinergy platform as part of a proposed settlement. We explored all possible paths to a resolution that would have allowed sellers the option of displaying compensation offers for their properties, but in the end, we were unable to reach an agreement that was acceptable to all necessary parties.
“While we will no longer be able to offer the optional display of compensation, we will not waver in our commitment to a more transparent real estate market. We’re committed to moving forward with clarity and purpose, and to continuing our support for our subscribers as we deliver exceptional service in an evolving industry.”
The settlement’s final approval hearing is scheduled for Sept. 29 at 2:30 p.m. Eastern.
The plaintiffs and MLS PIN first asked for preliminary approval of a settlement between them in June 2023. Saris made the decision to grant preliminary approval of the latest version of the deal a week after the DOJ withdrew its objections. The federal agency had disagreed with a previous version of the deal in which MLS PIN, a broker-owned MLS not affiliated with the National Association of Realtors (NAR), continued to allow offers of compensation on its Pinergy MLS platform.
By contrast, in NAR’s own nationwide antitrust settlement, the trade group agreed to prohibit offers of compensation on Realtor-affiliated MLSs.
The DOJ stated multiple times in the Nosalek case that it believes “blanket, upfront offers” of buyer broker compensation from homesellers or their listing brokers are anticompetitive in practice and lead to inflated home prices.
After going back to the drawing board several times, the plaintiffs and defendant MLS PIN submitted a fourth amended settlement agreement at the end of May in which MLS PIN agreed to prohibit offers of cooperative compensation on its platform and to raise the proposed settlement fund from $3 million to $3.95 million, the same amount it would have cost MLS PIN to join NAR’s settlement.
Erminio Grasso
“Over the course of more than a year of court hearings and discussions with the Department of Justice, it became increasingly clear that our respective views of what is best for consumers were simply not aligned,” MLS PIN President and CEO Erminio Grasso told the MLS’s subscribers in a May 29 email.
“We explored all possible paths to common ground, but those efforts did not produce an agreement on terms that would allow for the continued display of compensation offers on Pinergy.”
Following that change, the DOJ told the court that it withdrew its objections to the deal without taking any position on whether or not the deal was “fair, reasonable, and adequate.”
But at the same time, the antitrust enforcer issued a warning to the real estate industry: Neither the settlement, nor its terms, prevent the DOJ from taking legal action against those who continue to make upfront offers of compensation to buyer brokers anywhere and the settlement cannot be used as a defense against such legal action.
“To be clear, the United States maintains that blanket, upfront offers of buyer broker compensation by sellers or their listing agents constitute an anticompetitive practice that inflates costs for home buyers and sellers,” the DOJ filing states.
“Because the proposed settlement was reached between private litigants in a private class action suit, such settlement does not preclude any future enforcement actions by the United States,” the filing adds.
“Nor would compliance with the proposed settlement or new MLS PIN rules implementing that settlement afford a defense to any such enforcement actions.”
This is similar to what the DOJ told the court before NAR’s settlement received final approval last year.
During an April 1 hearing, Saris said she would not approve the proposed settlement unless the scope of the settlement was narrowed to only include residential listings, instead of all real estate listings, within MLS PIN’s service area, since other types of properties were not applicable to the case’s plaintiffs. MLS PIN included that amendment in the latest version of the deal.
Read the order granting preliminary approval (re-load page if document is not visible):
