HomeServices of America can preserve some of its legal war chest — for now, at least.
The residential brokerage was dismissed this week from one of the early real estate commission lawsuits, known as “Batton 1” after its lead plaintiff, a homebuyer named Mya Batton.
Judge Andrea Wood of the U.S. District Court for the Northern District of Illinois dismissed a claim made by the plaintiffs under a federal antitrust law. But Wood, who is also overseeing the Moehrl commission lawsuit, preserved nearly all of the plaintiffs’ claims under state antitrust laws (with exceptions in Tennessee and Kansas).
In her dismissal ruling on Tuesday, Wood wrote that the plaintiffs’ request for injunctive relief under the Sherman Antitrust Act “essentially mirror the allegations” made in the original 2021 complaint that she dismissed in May 2022 (which was previously known as the Leeder case). Wood wrote on Tuesday that home sellers were “better suited to seek injunctive relief.”
Wood also cited the $5.36 billion Sitzer/Burnett verdict, in which the National Association of Realtors (NAR), Keller Williams and HomeServices affiliates were found to have conspired to inflate or stabilize commissions paid by sellers.
“To the extent a putative class member faces a significant threat of injury from Defendants’ alleged antitrust violations in their capacity as a buyer, they would likely be simultaneously exposed to injury as a seller too — i.e., they would be threatened with the same injury as that suffered by the home seller class certified in Moehrl and Burnett,” Wood wrote.
In the Batton 1 case, the plaintiffs alleged that the NAR, a trade association with 1.4 million members that advocates for the interests of real estate brokers, conspired with brokerages to adopt and enforce anticompetitive rules applicable to the vast majority of real estate brokers, resulting in homebuyers paying supracompetitive rates of commission to the brokers they retained to assist with their home purchases.
At issue are the NAR’s rules and policies that govern MLSs, which are enforced by local Realtor associations that own the MLSs. Effectively, the plaintiffs argue that access to the MLSs by brokerages and individual Realtors is conditioned on their compliance with the NAR’s rules, and given the commercial necessity of MLS access, the brokers have little choice but to comply.
In her ruling yesterday, Wood dismissed the claims without prejudice, which will allow the plaintiffs to refile if they choose. Because HomeServices and its affiliates are not based in Illinois, the federal claim was dismissed, but state claims can continue.