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The plaintiffs argued that the settlement with the National Association of Realtors would not prevent “a key element of the antitrust conspiracy”: listing brokers to buyer’s brokers.
On June 20, U.S. District Court Judge William S. Stickman of the Western District of Pennsylvania denied a motion to cease participating in the West Penn MLS, which is not affiliated with the real estate brokerage but is paying nearly $1 million to accept a term of coverage.
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The suspension will temporarily end the West Pennsylvania MLS’s obligation to respond to a class-action lawsuit filed by home sellers in December. The case is now named Moratis after its lead plaintiff, formerly Spring Way Center.
The lawsuit alleges that West Penn MLS’s commission-related rules violate the federal Sherman Antitrust Act and are part of a “nationwide conspiracy within the real estate industry to maintain inflated commissions.” This rule is similar to NAR’s Rules of Participation, which require listing brokers to compensate buyer’s brokers for submitting listing information to the MLS.
On June 19, West Penn MLS filed a motion to stay the case “to conserve judicial and party resources” until after a Nov. 26 hearing in the U.S. District Court for the Western District of Missouri that ultimately approved the NAR settlement. The court is dealing with the settlement reached in the Sitz case | Burnett, a major commission lawsuit that ends with a jury verdict against NAR and a major real estate franchisee if damages are tripled , the total compensation will be as high as 5.4 billion US dollars.
“If the motion for final approval of the Burnett Settlement is granted following a fair hearing in November 2024, all individual and putative class claims against WPML in this case will be released unless Plaintiffs and Class Members timely opt out of the Burnett Settlement ,” the motion reads.
However, that same day, plaintiffs’ attorneys filed a response to the motion, objecting to the scope of NAR’s proposed settlement. They noted that NAR’s settlement was for $418 million and expanded the settlement category from Missouri home sellers “to virtually all home sellers nationwide.”
“As such, they aim to resolve all claims over a 13-year period by all parties nationwide who were harmed by the antitrust conspiracy. [percent] The jury found that the conspiracy caused harm in a state,” the filing reads.
“More importantly, the settlement will also allow other parties involved in the same or similar antitrust conspiracy across the country to opt into the settlement and be relieved of any liability in that action, some for free and some for similarly low amounts. value contribution.
West Penn MLS had 9,203 subscribers at the end of 2023, and the company paid $920,300 to opt into the NAR deal, which includes a formula that allows non-Realtor MLSs to get coverage if they pay 100 times the number of subscribers last year.
Plaintiffs’ attorneys have also criticized changes to the deal’s practices, the biggest of which prohibits listing brokers from providing compensation to buyer’s brokers through the MLS.
“However, this will not prevent these offers from being made elsewhere (and may not even prevent independent MLSs, such as the Western Pennsylvania MLS, from opting into the settlement),” the filing reads.
“As a result, a key element of the antitrust conspiracy would not be stopped, but would simply be moved underground, where it would be harder to document in the future and harder to stop through antitrust law. The U.S. Department of Justice, for example, believes that this is not enough.
In a major commission case in Massachusetts called Nosalek, Justice Department attorney Jessica Leal told the court that the Justice Department has not yet taken a position on the NAR transaction but believes that eliminating the buyer’s broker compensation offer in the MLS It is “a kind of progress”. However, she added, “We believe compensation should not be offered anywhere but certainly not on the MLS.”
Given the Justice Department’s attention and the possibility of other opponents, attorneys for Moratis’ plaintiffs stressed that final approval of the NAR settlement is far from certain.
“Multiple Sclerosis. Lyle also said that while the department would not commit in any way whether it would oppose Missouri’s settlement agreement, it did say that the department would be paying close attention to the issue, paying particular attention to the parties’ options,” the document reads.
“Given the concerns expressed by Ms. Lyle, there will undoubtedly be multiple objectors, potentially including the United States of America,” the document added.
“Now, Western Pennsylvania MLS is seeking to opt-in to the settlement and is asking the court to put the case against them on hold indefinitely pending approval or denial of the Missouri settlement.”
Granting West Penn MLS’s motion to stay “would impair the ability of this case to move forward,” especially if the litigation drags on for years, the filing said.
“The best-case scenario would be a five-month moratorium until the Western District of Missouri decides to deny or approve the settlement, with no appeal thereafter,” the filing reads.
“That’s unlikely. More likely, the matter will languish while it’s before the Eighth Circuit. [Court of Appeals] Decide whether to uphold or reverse the decision of the Western District of Missouri, whatever that decision may be.
“In a case of this magnitude, it is not surprising that one or more parties would seek a writ of certiorari. [from the U.S. Supreme Court]. This delay can last for years, during which time evidence becomes stale, witnesses forget key events, and members of the plaintiff class die while waiting for relief. This bias will be extreme.
Judge Stickman denied Sipayn’s motion to stay but did not comment.
Inman has reached out to West Penn MLS for comment and will update this story if he hears back.
Send an email to Andrea V. Brambila.
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