Court Report: HomeServices Pushes for New Trial; CMLS Weighs in on Future of Buyer-Broker Compensation

Editor’s note: The COURT REPORT is RISMedia’s weekly look at current and upcoming lawsuits, investigations and other legal developments around real estate.

Commission suits old and new remain in the news; however, not all lawsuits come from the consumer side of the real estate industry. 

Here’s a roundup of what you may have missed this past week. 

HomeServices pushes for new Burnett trial

HomeServices, which has not settled in the Burnett class-action commission lawsuit, continues pushing ahead in efforts to fight the verdict. Previously, a judge denied HomeServices’ attempt at having the plaintiff class decertified

On Sunday, March 31, 2024, HomeServices filed two new requests. One, a request for a new trial—HomeServices’ filing alleges that the previous trial (ruled for the plaintiff class who claimed the buyer-broker commission rule of NAR constituted an antitrust violation) resulted in a “miscarriage of justice.” HomeServices’ listed complaints about the previous trial are supposed “(errors) on a number of evidentiary rulings.”

For instance, HomeServices argues that the testimony of plaintiffs’ witness Dr. Craig Schulman (who cited Australian compensation rules in comparison to NAR’s) was “speculative, contradictory and unfounded.” In turn, the complaint also mentions evidence involving Missouri state laws (where the trial was held) allowing cooperative compensation was not admitted. 

Relatedly, HomeServices is asking the court for a new order with a judgment as a matter of law in their favor. This is a motion where a party asks for a judge for a decision, without or even overriding the verdict of a jury because they claim the opposing party has insufficient evidence to stand on. 

The complaint reads: 

“Because the jury lacked a legally sufficient basis to find for Plaintiffs, judgment as a matter of law should be granted in favor of the HomeServices Defendants. Specifically, the direct-purchaser requirement bars Plaintiffs’ suit; the Model Rule is not an unreasonable restraint of trade; Plaintiffs presented no evidence that NAR conspired with anyone; and Plaintiffs failed to prove injury or damages resulting from the challenged rule.” 

Former Keller Williams agents sue over alleged contract violation

As RISMedia previously reported, three former Keller Williams agents—Robert E. Hill, David L. Bueker and Jerri L. Moulder—filed three separate lawsuits alleging the company has reneged on its contract with them.

One of those contractual promises was continual profit-sharing, even if the agents did not remain affiliated with Keller Williams. In the summer of 2023, Keller Williams announced that this policy could be changing as it is tantamount to paying their competitors.

Hill, Bueker and Moulder (who are seeking to certify a national class of former Keller Williams agents affected by the change) argue that the company cannot change the policy without breaking the contract as they were already “vested” in the payments.

New commission suit filed, not a class-action 

Yet another commission lawsuit has been filed, one in the U.S. District Court for the Southern District of New York—Wang v. National Association of REALTORS® (NAR).

Despite making similar allegations about “inflated” commissions, this suit looks to be smaller-scale. The plaintiff, Dr. Hao Zhe Wang, is not seeking class-action status in the suit. Moreover, as a practicing attorney, he is representing himself.

Brokerages/real estate entities named in the suit as “conspirators” include NAR, the Real Estate Board of New York, Brown Harris Stevens, Compass, eXp and HomeServices. 

CMLS argues against DOJ’s proposals on buyer-broker compensation

The Council of Multiple Listing Services (CMLS) recently motioned to file an amicus curiae (meaning “friend of the court” in Latin)—a legal brief filed by a party who is not part of a legal proceeding but is acting in support of one of the involved parties—in Nosalek v. MLS Property Information Network (PIN), Inc. The case (read more about it here), filed in Massachusetts District Court, is partially settled in favor of the plaintiffs (homesellers who worked with MLS PIN and paid “inflated commissions”), but MLS PIN’s settlement and proposed policy changes are being subject to Department of Justice (DOJ) review and approval.

In their amicus curiae, CMLS argues in favor of MLS PIN’s planned policy changes—making it clearer to sellers that they are not obligated to compensate buyer-brokers under MLS PIN rules and removing the rule that listing brokers must list buyer broker compensation on a listing. In turn, CMLS argues against the DOJ’s stricter proposal to prohibit buyer-broker compensation by sellers listing on MLS PIN.

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