© Reuters. FILE PHOTO: Men work at a construction site for a luxury apartment complex in downtown Los Angeles, California March 17, 2015. REUTERS/Lucy Nicholson
By Mike Scarcella
(Reuters) – A federal judge in Chicago ruled on Wednesday that home sellers who accuse the National Association of Realtors and a group of real estate brokers of conspiring to inflate commission rates can move forward as a class action lawsuit.
U.S. District Judge Andrea Wood’s decision grants class action status to previous home sellers seeking more than $13 billion in damages and creates a separate class of current and prospective sellers who want a Court order prohibiting further violations of US antitrust law.
The plaintiffs are seven home sellers. The judge’s order said that membership in each class “can be expected to be in the thousands, at a minimum.”
Designation as a class means plaintiffs can bring large-scale claims against the National Association of Realtors, RE/MAX LLC, Long & Foster Inc, and other corporate defendants instead of filing individual claims for money damages.
The judge’s order was not a decision on the merits of the allegations, which can still be challenged at a later stage. The defendants have denied the conspiracy allegations.
In a statement, the National Association of Realtors said it was “disappointed” by the decision and defended the industry’s listing practices.
The lawsuit challenges the requirement that sellers make “general unilateral offers of compensation” to buyers’ brokers when a home is listed through a multiple listing service. That system pressures sellers to offer high commissions to attract buyers’ brokers, the sellers said.
NAR spokesman Mantill Williams said this practice “saves sellers time and money by having so many buying brokers participating in that local market and therefore creates a larger pool of buyers for sellers.”
A RE/MAX spokesman said the company had no comment on pending litigation. Long & Foster declined to comment.
The class seeking money damages includes certain home sellers who paid a commission between March 2015 and December 2020 in states including Texas, Florida, New Jersey, Ohio, Pennsylvania, Virginia, North Carolina and Colorado, records show. court documents.
The case is Moehrl et al v. The National Association of Realtors et al, US District Court for the Northern District of Illinois, No. 1:19-cv-01610.
