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Even as a judge granted final approval to major commission settlements on Tuesday, a slate of filings in other cases continued to roll in, a stark reminder that the National Association of Realtors’ approval wasn’t the last word.
On the same day Judge Stephen R. Bough granted final approval to the settlements of the National Association of Realtors, HomeServices of America and dozens of other industry players, a new filing in a class action lawsuit known as Batton II in Illinois will pave the way for additional plaintiffs to be included as the case proceeds.
Plaintiffs filed an amended complaint in that case on Tuesday. No adjustments to their arguments or allegations were made, but 22 new homebuyer plaintiffs from 19 states were added to the suit, for a total of 32.
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Tuesday’s final settlement approval — which will likely be appealed — resolved antitrust claims brought by homesellers in cases known as Sitzer | Burnett, Moehrl and similar suits nationwide alleging NAR, HomeServices and other major real estate companies formed an illegal conspiracy to inflate broker commissions.
Other settlements by companies including Keller Williams, RE/MAX, Compass and Anywhere had previously already been approved.
But settlements in cases filed by homesellers don’t protect against lawsuits filed by homebuyers who weren’t also sellers. There are other lawsuits filed by homebuyers who have made similar claims as those covered in Sitzer | Burnett, and the second amended complaint filed in Batton meant that any celebrations by industry players would be short lived.
“For decades, homebuyers across America have been unwittingly paying too much for, and receiving too little from, services offered to them by real estate agent members of National Association of Realtors,” the Batton II plaintiffs wrote in their complaint, which was first filed on Nov. 2, 2023.
“Defendants’ unlawful, anticompetitive conduct causes America’s homebuyers to pay inflated commissions for broker services they misrepresent as free, to pay inflated prices for the homes they purchase, and to receive reduced quality broker services,” the complaint states.
The case takes aim at Compass, eXp, Redfin, Weichert and United Real Estate.
Tuesday’s amended complaint was nearly identical to a complaint previously filed in the case. The main change is that it added new plaintiffs from Colorado, North Carolina, Illinois, Iowa, Utah, New Hampshire, California, Missouri, Minnesota, Wisconsin, New Mexico, Arizona, Virginia, South Carolina, Washington D.C., Michigan, Oregon, Connecticut and New York.
It was already clear that the settlement wasn’t the end of legal headaches for NAR and major players in the industry.
Two days before the Sitzer settlement received final approval, the Department of Justice filed a statement of interest confirming it maintained an open and active investigation into NAR policies.
The DOJ attorneys also said the department had an issue with a core business practice change outlined in the settlement — the requirement that buyers sign a buyer representation agreement with a broker before touring a home. And they told the court that the settlement wouldn’t protect NAR and other settling defendants from other antitrust litigation in the future.
Other updates
Meanwhile, real estate firms that weren’t covered by the NAR settlement are still working through their legal strategies.
Last month, eXp reached a settlement agreement and committed to paying $34 million in a case known as Hooper.
That settlement hit a roadblock when the defendants in a separate case known as Gibson objected, saying eXp picked a court case and negotiated a “sweetheart deal.” EXp hit a roadblock when Judge Stephen Bough agreed and declined to pause the Gibson case.
“The Court finds that Plaintiffs raise genuine issues of potentially questionable behavior regarding eXp’s Hooper settlement which warrant further discovery in this case,” Bough wrote in the filing.
On Tuesday, eXp called that ruling “premature,” and said that Bough erred in his ruling. The company said it would release documents outlining its settlement agreement in the coming weeks.
“In connection with that motion, in the next several weeks the parties will be submitting a long-form settlement agreement which details the terms of the settlement reached with the Hooper settlement class,” eXp wrote in its filing.
Weichert also reached a settlement agreement in Hooper and asked Bough to pause the case while it awaits final approval. Bough has yet to rule on that request.
In a separate filing, also on Tuesday, the Illinois-based brokerage Baird & Warner has reached a settlement agreement in the Gibson case. Baird & Warner transacted $6.27 billion in sales volume in 2022 and was therefore not covered by the NAR settlement. The details of the proposed settlement weren’t included in the filing.
