The verdict is in — the old way of doing business is over. Join us at Inman Connect New York Jan. 23-25, when together we’ll conquer today’s market challenges and prepare for tomorrow’s opportunities. Defy the market and bet big on your future.
Not enough.
That’s the message from the U.S. Department of Justice to a federal court in Boston Monday after homeseller plaintiffs and a broker-owned MLS adjusted a proposed settlement to address the federal agency’s lingering “concerns.”
In a Dec. 18 letter, DOJ attorney Jessica Leal informed Judge Patti Saris of the U.S. District Court in Massachusetts that the agency had conferred with lawyers for the plaintiffs and MLS Property Information Network (MLS PIN) to attempt to address concerns that the deal’s proposed commission rule changes may not go far enough, but wasn’t satisfied with the latest version of the deal.
“On Wednesday, December 13, plaintiffs’ counsel shared the Second Amended Settlement with the Department of Justice and indicated that they intend to file a renewed motion for preliminary approval on Monday, December 18, 2023,” Leal wrote.
“While the Second Amended Settlement makes some proposed changes, the Department of Justice continues to have concerns with the proposed settlement.”
The letter did not elaborate on what the concerns are. Leal asked Saris to give the DOJ until Feb. 15 to file a statement of interest if the court wished to hear the agency’s views before determining whether to grant preliminary approval to the second amended settlement, which Saris granted. That settlement itself had not yet appeared in the case’s docket as of Monday evening.
The DOJ and MLS PIN declined to comment. Inman has reached out to attorneys for the plaintiffs and will update this story if and when a response is received.
As part of the original deal, MLS PIN agreed to overhaul its commission policies, pay $3 million, and “cooperate” in the litigation against the remaining defendants named in the suit: Real estate franchisors Anywhere (formerly Realogy), RE/MAX, Keller Williams and HomeServices of America. In October, Anywhere and RE/MAX agreed to proposed settlements in the case.
The case, known as Nosalek after its lead homeseller plaintiff (previously Bauman), was filed in Dec. 2020. Like federal commission suits Moehrl and Sitzer/Burnett, it seeks class-action status and alleges that the sharing of commissions between listing and buyer brokers inflates seller costs and is a conspiracy in restraint of trade, a violation of the Sherman Antitrust Act.
However, Nosalek differs in one important respect from the other suits: The National Association of Realtors is not named as a defendant, although MLS PIN is. The MLS, which has a full-time staff of 60 employees, boasts approximately 46,000 subscribers in six New England states and New York.
The settlement class is made up of sellers who paid, or on whose behalf sellers’ brokers paid, buyer broker commissions starting Dec. 17, 2016, in connection with the sale of residential real estate listed on Pinergy, MLS PIN’s multiple listing service system.
Under the original proposed settlement, MLS PIN would have removed a requirement that homesellers must offer compensation to buyer brokers; would have required listing brokers to notify sellers that they’re not required to offer compensation to buyer brokers and that they can decline if a buyer broker requests compensation; and would have clarified that if the seller makes an offer to a buyer broker and the buyer makes a counteroffer, commissions would be negotiated among the seller, the buyer, the seller broker, and the buyer broker.
But in September, the DOJ’s attorneys told the court, that rather than open up competition, “MLS PIN’s proposed rule changes still establish an elaborate protocol (under penalty of sanction) regulating buyer-broker commissions, including requiring the listing broker to initially set the ‘total amount of compensation offered’ (including the number zero) in the listing.
“Thus, MLS PIN would continue to organize and facilitate brokers’ blanket, unilateral offers of compensation to buyer brokers.”
Editor’s note: This story has been updated to note that Saris granted the DOJ’s request.
Read the DOJ’s Dec. 18 letter:
