COURT REPORT: NAR, Big Brokerages Split on Consolidation; REBNY Suit Dropped

Just as the litigious real estate landscape seemed to be settling down, the ground has shifted again, with a surprise settlement in one especially dangerous and advanced case, and the sudden dismissal of another. 

Simultaneously, after months of new cases piling up, the push for consolidating commission-related class-action lawsuits is accelerating, with the National Association of REALTORS® (NAR) and other defendants wrangling with the plaintiffs—and each other—on the specifics around joining all these cases.

While it appears that the many ongoing lawsuits claiming NAR and other big brokerages conspired on rules to inflate commission will continue forward in one form or another, recent developments show just how fast the pace or path can evolve, as the industry continues to face a seismic shift.

Here are the latest developments around real estate in the courtroom:

Defendants, plaintiffs at odds over consolidation

After NAR last week signaled the organization is in favor of consolidating approximately 20 commission-related class-action suits, filings by other defendants (and plaintiffs) show there is no clear consensus on the path forward.

Keller Williams and HomeServices, two of the largest companies named in many or most of the lawsuits, both opposed consolidation in recent filings in federal court, urging a panel of judges to allow individual proceedings to continue in the regions they were filed.

“There are few efficiencies to be gained by centralization when important issues concerning defendants’ involvement in alleged conspiracies…will turn on local discovery into the activities of dozens of individual local defendants,” lawyers for Keller Williams wrote.

Other defendants, including Weichert, REALTORS® and eXp, took no position on the consolidation proceedings, though some other brokerages also wrote in support of NAR’s plan. At least one set of plaintiffs joined the defendants in opposing consolidation.

For the most part, defendants opposed the original plan, which was filed by lawyers behind the Burnett suit and called for consolidation in the same courtroom and under the purview of the same judge who oversaw that case. Defendants mostly pointed at Chicago or Eastern Texas—two options proposed by NAR—as the best venues for bringing all the cases together.

A ruling is expected on the consolidation in the coming weeks.

Pocket listing lawsuit settles, NAR claims victory

What seems like rare relief arrived for NAR and real estate’s big players this past week, as three huge MLSs reached a settlement in a lawsuit filed by a pocket listing startup back in 2020.

This lawsuit, known as v. NAR, differed from the Burnett copy-cats in some very important ways, focused on “clear cooperation”—an NAR policy that requires agents to list properties on NAR-affiliated MLSs. It was also not a class action.

An NAR spokesperson told RISMedia that the organization did not have to pay anything or change any policies as a result of the case ending, but notably, NAR was not part of the formal settlement agreement involving the MLSs. 

Details of that agreement were not immediately available, and an attorney for the plaintiffs declined to comment.

REBNY suit dropped by plaintiff

The Real Estate Board of New York (REBNY), based in New York City, disaffiliated from NAR decades ago, but that didn’t seem like it would stop recent homesellers from bringing similar accusations as the Burnett plaintiffs against them. 

One of those plaintiffs, though, will seemingly not be pushing forward with his complaints, according to a very brief court filing earlier this month. The case was known as Friedman v. REBNY, but Robert Friedman chose to voluntarily drop his case without prejudice, seemingly ending the litigation. 

Friedman’s attorney did not respond to an email and a voicemail seeking more information about the decision to drop the case. One federal commission lawsuit naming REBNY as well as New York City-based brokerages, known as March v. REBNY, is still ongoing.

NAR denied as Gibson gets a schedule

Gibson, the national lawsuit filed by the attorneys behind Burnett minutes after the verdict in that case, has a schedule for its first big pre-trial motions and filings, after NAR’s attempt to delay the case indefinitely was denied.

Judge Stephen Bough, who presided over the Burnett trial and is also overseeing Gibson, ruled that a delay is not warranted and could harm plaintiffs, as they would “allegedly be continuing to pay inflated commission rates” during the pause.

Bough also said that issues brought up in NAR’s appeal of Burnett, which the REALTOR® association cited in its request for a delay, would not affect Gibson anytime soon, and also noted that NAR did not request a delay in any of the other ongoing commission lawsuits that echo the allegations in Burnett.

Bough later ordered a scheduling conference in two weeks, with defendants required to file their first responses to the lawsuit on or before Feb. 26.

Plaintiffs and defendants seek delay in second pocket listing suit

A case that is very similar to the recently settled lawsuit—but notably does not name any MLSs—appears to be on shaky ground. Top Agent Network (TAN), a pocket listing startup that sued NAR and a local REALTOR® association in 2020, joined the defendants in asking for a delay in the case earlier this month, along with a suspension of all future deadlines. 

The judge denied the request, writing that “the parties have not provided enough information to allow the Court to determine whether such a significant delay would be justified.”

Why both parties would seek an indefinite pause in the case was not immediately clear. The suit, known as TAN v. NAR, was previously dismissed but remanded on appeal, similar to the lawsuit, which made similar allegations.

TAN could not immediately be reached for comment.

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