NAR catches break in one antitrust lawsuit

Lawsuit alleging buyer cost inflation dismissed

National Association of REALTORS' Charlie Lee (LinkedIn, iStock, Illustration by Kevin Cifuentes for The Real Deal)
National Association of REALTORS' Charlie Lee (LinkedIn, iStock, Illustration by Kevin Cifuentes for The Real Deal)

As one agent commissions lawsuit against the National Association of Realtors trudges along, the group can breathe a sigh of relief over a similar suit.

A federal judge this week dismissed a lawsuit filed last year by New Jersey homebuyer Judah Leeder against NAR, Realogy, Keller Williams, RE/MAX and HomeServices of America, Inman reported. The suit was seeking class-action status.

The lawsuit alleged commission sharing between listing and buyer brokers violates the Sherman Antitrust Act, inflating buyer costs in the form of higher home prices. Judge Andrea R. Wood of U.S. District Court for the Northern District of Illinois Eastern Division sided with the defendants, claiming buyers aren’t eligible for damages from antitrust violations because they are indirect purchasers of buyer broker services.

Wood did dismiss the case without prejudice, meaning Leeder could refile the lawsuit if he is able to argue that he’s a direct purchaser of buyer-broker services.

NAR’s senior counsel and director of legal affairs, Charlie Lee, celebrated the judge’s ruling on Tuesday, telling the outlet the decision was “good news.”

The dismissal of the lawsuit is far from the end of NAR’s potential antitrust problems, though.

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In the decision, Wood referenced another case she is overseeing, Moehrl v. The National Association of Realtors.

The federal case, which puts forth a similar argument, alleges commission sharing inflates the costs of sellers. A ruling against NAR and Realogy in that case could disrupt the broker commissions model across the country.

Part of Wood’s decision noted the Moehrl lawsuit is “vindicating the public interest in antitrust enforcement as they are actively challenging the same NAR rules.”

In a similar case, a federal judge ruled last month a lawsuit started three years ago by plaintiffs Joshua Sitzer and Amy Winger could receive class-action certification. With the decision, the lawsuit can represent any seller who paid a broker commission for a residential real estate deal across four Missouri MLSs going back eight years ago.

NAR and Realogy both plan to appeal the decision in that case.

[Inman] — Holden Walter-Warner