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The plaintiffs and the multiple listing service defendant in a major antitrust commission suit are joining forces against a common foe: The U.S. Department of Justice.
On Wednesday, plaintiffs Jennifer Nosalek, Randy Hirschorn and Tracey Hirschorn and defendant MLS Property Information Network (MLS PIN) asked the U.S. District Court for the District of Massachusetts for permission to respond to a statement of interest the DOJ filed in the case on Feb. 15.
In that filing, the federal agency rejected rule changes in a proposed settlement between the plaintiffs and MLS PIN and instead called for “an injunction that would prohibit sellers from making commission offers to buyer brokers at all,” thereby promoting competition and innovation between buyer-brokers because buyers would be empowered to negotiate directly with their own brokers.
While the plaintiffs and MLS PIN have previously gone back to the drawing board and rejiggered their settlement after the DOJ expressed concerns about the deal, it seems that after hearing the antitrust enforcer’s specific objections, they have decided instead to fight.
“Plaintiffs and MLS PIN dispute the factual and legal arguments made in the DoJ’s Statement of Interest,” attorneys for both say in a joint court filing.
“Accordingly, Plaintiffs and MLS PIN respectfully request the opportunity to file separate responses to the DoJ’s Statement of Interest no later than March 28, 2024.”
March 28 is the date of oral arguments before a multi-district litigation (MDL) panel. On Dec. 27, attorneys for the plaintiffs in other, similar suits called Gibson and Umpa requested that the United States Judicial Panel on Multidistrict Litigation consolidate any cases nationwide asserting similar claims — which would include this Nosalek case — in the U.S. District Court for the Western District of Missouri. That court was the first to hold a trial in a similar case known as Sitzer | Burnett, which ended in a multibillion-dollar verdict for the homeseller plaintiffs.
The judge in Nosalek, Judge Patti B. Saris, paused the case on Feb. 14, pending a ruling from the MDL panel, but reopened it temporarily the next day to allow the DOJ to submit its statement of interest.
“Plaintiffs and MLS PIN do not expect the MDL Panel to issue a decision on or by that date [March 28], and understand that the stay of this action, including with regard to the MLS PIN settlement and all proceedings related thereto, will remain in effect for at least several more weeks until the MDL panel does so,” the joint court filing says.
“However, Plaintiffs and MLS PIN propose submitting their responses by March 28 so that, once the MDL Panel does rule and should the stay in this Court thereafter be lifted, the DoJ, the parties, and this Court will be in a position to proceed expeditiously.”
Like federal commission suits Moehrl and Sitzer | Burnett, Nosalek 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 many of the other suits: The National Association of Realtors is not named as a defendant, while 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 Nosalek case, like ever-multiplying antitrust lawsuits across the country, challenges a rule that requires listing brokers to make blanket, unilateral offers of compensation to buyer brokers in order to submit a listing in an MLS. Most of the suits target NAR’s version of this rule, known as the cooperative compensation rule or the Participation Rule, which is in effect for all Realtor-affiliated MLSs nationwide and has thus attracted the attention of the DOJ.
Whether the plaintiffs and MLS PIN will specifically oppose the DOJ’s call to decouple commissions remains to be seen. A week after the DOJ’s filing, NAR broke its silence on the agency’s proposal, stating it would harm consumers by making it more costly for homebuyers to get capable representation and by reducing access to fair housing.
Read the joint court filing:
