Federal panel nixes broker commission lawsuit consolidation

Judges cited NAR’s settlement in letting suits play out

Federal Panel Rejects Combining Commission Lawsuits

From left: HomeServices of America’s Chris Kelly and Michael Ketchmark (Getty, HomeServices of America)

The array of broker commission lawsuits will remain separate matters, a federal panel of judges ruled.

The Judicial Panel on Multidistrict Litigation brushed off a request to consolidate the slew of cases into one case at this time, Inman reported. The push to centralize the cases came as copycat lawsuits pop up piecemeal across the country in the wake of the landmark Sitzer/Burnett case.

The federal panel was weighing consolidation after a motion filed in January. 

The ruling issued last week said the judges prefer to let the web of cases continue separately before revisiting the issue, citing in part the National Association of Realtors’ $418 million settlement, which protects many of its members from present and future litigation.

“Given the broad contours of this new settlement agreement and the changing landscape of the parties’ positions on centralization, we think it wise to deny centralization at this time,” the panel said.

NAR’s proposed settlement includes rule changes that would change how broker commissions appear on its Realtor-owned multiple listing services in markets across the country. Each of the lawsuits centers on claims the trade group’s long-standing commission policies artificially inflate costs for homesellers.

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Even before the $1.8 billion verdict in the Sitzer/Burnett case, some of the biggest residential brokerages bowed out of broker commission lawsuits with hefty settlement deals. 

HomeServices of America, which was not included in NAR’s settlement deal and remains a defendant in Sitzer/Burnett, is unaffected by the consolidation proceedings. 

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“The order today does not alter HomeServices’ ongoing aggressive efforts to resolve its involvement in the underlying litigation,” HomeServices of America executive Chris Kelly told Inman.

Michael Ketchmark, the lead plaintiff attorney in Sitzer/Burnett, suggested the panel’s decision could spark more settlements.

“It looks like this is headed toward responsible brokers and companies finding a way to settle with NAR and the other corporate defendants,” Ketchmark told Inman.

Holden Walter-Warner

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