REBNY slams Compass for ending its own lawsuit

The Real Estate Board of New York isn’t letting Compass off the hook without a fight.

Days after Compass filed a motion to dismiss its own lawsuit against the advocacy group, in which it alleged REBNY, Corcoran Group and Douglas Elliman collaborated to harm Compass by modifying and selectively enforcing the group’s rules, the trade group is firing back.

REBNY Friday afternoon filed its response to Compass’ request to dismiss the case with prejudice and award the trade group attorneys’ fees and other costs associated with the defense. A dismissal with prejudice would prevent Compass from filing another suit regarding anti-competitive behavior in the future.

“Compass’ request and the facts revealed through the discovery undertaken to date make clear that claims of a vast antitrust conspiracy involving REBNY are devoid of merit,” reads the letter.

The letter goes on to state that Compass’ request to dismiss its own suit proves REBNY’s contention that the allegations in the suit are false and that it was not filed in good faith.

Neither Compass or REBNY immediately responded to a request for comment.

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Central to Compass’ suit was a claim that Elliman and Corcoran unfairly refused to release their exclusive listings when brokers moved to Compass.

Under the rule, agents can’t contact previous clients after departing without either their former brokerage’s consent or a signed statement declaring the client wants to continue with the same agent.
REBNY eliminated the latter option, allegedly under pressure from Elliman and Corcoran. In January 2021, REBNY fined Compass $250,000 for “repeated violations” of the agreement.

But earlier this week the brokerage dropped its complaint, stating that “procompetitive changes within the market regarding approaches to agent mobility and referral of listings” made the suit unnecessary.

According to REBNY’s filing, Compass CEO Robert Reffkin and Senior Managing Director for Agent Development Gordon Golub approved the rules in question before they were adopted by the trade group, and participated in their drafting.

“Looks great,” Golub allegedly said in 2019 regarding changes to the client certification clause in REBNY’s universal co-brokerage agreement.

Compass previously contended it had not been allowed to participate in deliberations over the rule, according to REBNY.

REBNY also claims that Compass stalled the discovery process likely because it knew it could not provide supporting documents.

“To meet its discovery obligations, Compass has to review at a minimum more than 440,000 documents for production by January 16, 2023,” REBNY states. “The sheer volume of documents Compass must review in short order raises serious questions as to Compass’s motives in seeking a without prejudice dismissal.”

Finally, REBNY claims that Compass has waived its right to a dismissal without prejudice because it stated it currently has no intentions to file another suit.