T
he National Association of Realtors (NAR) has recently faced a significant deadline in its antitrust fight over broker commissions. Despite this, the pressure remains for the organization and some of the largest names in residential brokerage. In March, NAR agreed to new rules as part of a landmark settlement to resolve antitrust suits by homesellers. This settlement has raised more questions than answers in the months leading up to the deadline, and many in the industry are still struggling to understand its long-term impact. As residential players wait for the fallout to take shape, NAR and some of its brokerage constituents are still contending with other lawsuits not covered by the deal. The Department of Justice (DOJ) has also been a significant presence over the industry since April when a federal appeals court granted the agency permission to renew its probe into NAR and the commission sharing rule targeted by the antitrust litigation. It's unclear whether the agency will move forward with its own investigation now that policy changes are already in place, but the option to do so remains on the table.
Following settlements struck by some of the nation's largest brokerages, NAR agreed to pay $418 million in damages to resolve homeseller claims that the organization conspired with brokerages to drive up agent commissions. This deal came after a jury verdict against the group in a lawsuit known as Sitzer/Burnett and a wave of copycat lawsuits. It also extended an option to smaller brokerages and locally-controlled MLSs, along with providing a path forward for firms without agreements of their own. However, this agreement only applies to lawsuits brought by homesellers, not homebuyers, many of which are still making their way through federal courts.
Two Illinois-based lawsuits known as Batton 1 and Batton 2, named after the lead plaintiff, Mya Batton, are among the cases filed by buyers. The attorneys for the plaintiffs in these lawsuits have struggled to tie all of the plaintiffs and defendants to the jurisdiction of the federal court in Illinois, and many of the brokerages initially named in the cases have since been dismissed. HomeServices of America was also initially included in the first Batton lawsuit, alongside NAR, Anywhere, REMAX, and Keller Williams who are still litigating the claims, according to court documents. The judge dismissed HomeServices in February, and the attorneys representing the buyer plaintiffs instead sued the firm in a Florida-based lawsuit filed in April and known as Lutz.
The remaining brokerage defendants in the first Batton case also filed a motion to dismiss the case outlining a similar argument to HomeServices, though the judge has yet to enter a decision. This motion came about three months after the plaintiffs filed an appeal opposing the final approval of the settlement agreements posed by Anywhere, REMAX, and Keller Williams in the Sitzer/Burnett lawsuit. In the second Batton lawsuit, the judge dismissed claims against Douglas Elliman and Howard Hanna. Elliman was added as a defendant in the Lutz lawsuit in June, and attorneys for the Batton plaintiffs filed another lawsuit against Howard Hanna in the Eastern District of Pennsylvania in May.
The five remaining brokerage defendants in the Batton 2 case — including Compass, eXp, Redfin, Weichart Realtors, and United Real Estate — filed a motion to dismiss the claims in June, which the plaintiffs opposed in a counter-filing earlier this month. In the response, the plaintiffs argued that the buyers in the lawsuit “suffered direct injuries” in the form of inflated commissions.
Attorneys for the plaintiffs in the Sitzer/Burnett lawsuit sent out notices to potential members of the class on Aug. 17, the same day the NAR rules took effect. Eligible class members have until May 9, 2025 to file their claim. The DOJ Intervention also still plays a significant role in this case. Under President Donald Trump's administration, the agency agreed to drop its inquiry into NAR in 2020, but later reneged on the deal once President Joe Biden's administration took the helm. NAR contested the DOJ's decision to pull out of the settlement and won, but a federal appeals court later sided with the agency, ruling that agreement to forego its initial probe didn't prohibit the department from investigating the trade group and its practices in the future.
The trade group plans to challenge the DOJ by petitioning the Supreme Court to block the federal investigation. They expect to file by Oct. 10. So far, the agency hasn't interfered with NAR's settlement in the Sitzer/Burnett case, though it has taken issue with provisions proposed in other lawsuits like the one known as MLS PIN. The DOJ has the power to continue investigating NAR, but it may opt out of pursuing another probe considering the new rules and a potential change in authority with the November presidential election.
