DOJ dings settlement in New England commissions case

Federal attorney said “concerns” remain in changes proposed by MLS PIN

Justice Department Opposes Settlement in Commissions Case

From left: Attorney General Merrick Garland and MLS PIN president Erminio Grasso (Getty, MLS PIN)

All eyes have been on a landmark verdict on residential broker commissions handed down in October, but the drama is just picking up in another key case.

The Department of Justice signaled opposition to a proposed settlement in Nosalek, a commissions case unfolding in New England, Inman reported. This is the second attempt at a settlement between the homeseller plaintiffs and MLS Property Information Network, a multiple listing service operating in New York and six New England states.

The 2020 lawsuit seeks class-action status and alleges that commission sharing between listing and buyers’ brokers inflates seller costs and violates antitrust law.

The case resembles Sitzer/Burnett v. the National Association of Realtors and other prominent antitrust cases regarding the commissions rules required for access to multiple listing services. Nosalek is one of a few cases that doesn’t name NAR as a defendant and is instead taking aim at local industry authorities.

Under the original settlement proposal, MLS PIN agreed to overhaul its commission structure, pay $3 million and cooperate against other defendants in the lawsuit, including Anywhere, RE/MAX, Keller Williams and HomeServices of America.

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The Department of Justice filed an opposition to the settlement in September, claiming it still established a protocol that would regulate buyer-broker commissions and didn’t go far enough to change procedures. Among the changes proposed was eliminating the requirement that homesellers offer compensation to buyers’ brokers.

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The agency’s trial attorney in the case said in a letter this week “concerns” remain, but did not elaborate about the settlement, which wasn’t immediately accessible to the public. 

The Justice Department has until Feb. 15 to file a statement of interest on the settlement before the judge decides on preliminary approval. The agency and MLS PIN both declined to comment to Inman.

As the appeals process plays out in Sitzer/Burnett, commissions lawsuits are piling up across the country, threatening the way business is historically done in the residential industry. A major moment is set to come early next year when Moehrl goes to trial. Damages could conceivably reach $40 billion.

Holden Walter-Warner