What is the lawsuit about?
The primary allegation is that home sellers are unfairly being required to pay the commissions of buyers’ brokers while falsely suggesting the role of buyer broker has diminished over time. The complaint also contradicts itself and falsely asserts that NAR rules injure competition by requiring sellers and listing brokers to offer MLS participants cooperative commissions as a way to incentivize those participants to show their clients the property in question.
Where is the litigation right now?
In May NAR filed a motion to dismiss the Moehrl v. NAR lawsuit, which we believe demonstrated that the plaintiff's case was not legally viable. In response, the class action attorneys filed an amended complaint in June. While the new complaint presents additional plaintiffs and allegations, as well as revised arguments, the underlying foundation of it remains the same. The plaintiffs' attorneys continue to misunderstand and mischaracterize the pro-competitive, pro-consumer MLS system, which – as you know – is designed first and foremost with the best interests of buyers and sellers in mind. As expected, the amended complaint also consolidated one of the copycat lawsuits filed in Illinois after Moehrl v. NAR. NAR will file a motion to dismiss the consolidated Moehrl v. NAR complaint on August 9. NAR also filed a motion to dismiss the remaining copycat lawsuit, Sitzer v. NAR, in August too.
What is the significance of additional, similar lawsuits and more law firms signing onto the plaintiff’s case?
After NAR’s motion to dismiss the Moehrl v. NAR lawsuit demonstrated the plaintiff’s case was not legally viable, the class action attorneys filed an amended complaint in June. That amended complaint consolidated one of the copycat lawsuits filed after Moehrl v. NAR, therefore adding more law firms to the plaintiff’s representation in hopes they can receive a portion of attorney’s fees. This kind of legal maneuvering and piling on is very common among these career class action attorneys. NAR remains confident these lawsuits are baseless; therefore, we will continue with our plan to file a motion to dismiss Moehrl v. NAR on August 9. We filed a similar motion to dismiss in another copycat case that was filed in Missouri.
What is the motivation for the plaintiffs bringing this case?
We can’t speculate on motivation. What we can tell is that this lawsuit is wrong on the facts, wrong on the law, and wrong on the economics. The reality is that the MLS system works in the best interests of both buyers and sellers, and the way commissions are paid plays a key role in maximizing this benefit.
What would be the impact on the home buying market if the plaintiffs are successful?
We can’t speculate on what may or may not happen. What we can tell you is how confident we are in our position about the clear pro-competitive, pro-consumer benefits of the MLS system. The MLS has been around for well over 100 years and has contributed to an orderly and efficient marketplace. We are going to aggressively defend ourselves, along with the rights that benefit home buyer and sellers to continue to have access to a pro-consumer, highly efficient market.
Why did NAR file a motion to dismiss?
The National Association of REALTORS® (NAR) moved to dismiss the Moehrl v. NAR lawsuit on the basis that the complaint misrepresents NAR rules for the operation of Multiple Listing Services (MLSs), which have long been recognized by the courts across the country as protecting consumers and creating competitive, efficient markets that benefit home buyers and sellers. Our brief points out that the seven class action law firms who represent one plaintiff have resorted to fundamentally mischaracterizing NAR’s rules. That mischaracterization led the class action attorneys to dream up purportedly anticompetitive rules that simply do not exist in NAR’s Handbook or Code of Ethics. In reality, NAR rules specifically direct listing brokers to determine – in consultation with their clients – the amount of compensation to offer buyers’ brokers in connection with their MLS listings. Furthermore, under NAR rules, a buyer’s broker is free to negotiate a commission from the listing broker that is different from what appears in the MLS listing. Neither NAR nor any MLS has any say in setting broker commissions.
What is the likelihood this lawsuit will go to court, and if so, how long is this likely to go on?
If the court allows the plaintiffs to proceed, we may be looking at a very long, drawn out process. Class action lawsuits like this one have been known to go on for years – sometimes more than a decade.
Is there any chance NAR would settle with the plaintiffs out of court?
This lawsuit strikes at the heart of the MLS system that has greatly benefitted literally millions of home buyers and sellers for 100 years. Given the potential harm to consumers, we do not see an avenue for settlement.
What other kinds of anti-trust challenges have there been based on other MLS rules?
Various MLS rules have been tested over time from who can access the MLS to what information MLS participants must be able to display publicly. From where NAR sits, we continue to be motivated by rules and actions we believe to be pro-consumer and pro-competitive.
Is it okay to discuss the lawsuit with my clients?
Absolutely. Brokers and agents are encouraged to have transparent conversations with current and prospective clients about the services they will provide and how they will get paid for those services. This lawsuit doesn’t change that. Brokers are compensated for their services and the Multiple Listing Service (MLS) system is uniquely designed to facilitate successful closings in the best interest of home buyers and sellers.