Bombshell Commission Suit 1 Step Closer To Trial After Appeal Rejected
A federal appeals court on Wednesday denied a request from NAR, Anywhere, Keller Williams, RE/MAX and HomeServices of America to overturn class certification in the Moehrl lawsuit.
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A federal appeals court on Wednesday denied a request from the National Association of Realtors, Anywhere, Keller Williams, RE/MAX and HomeServices of America to overturn class certification for a lawsuit that could ultimately lead to billions in commission reimbursements to homesellers nationwide while setting the stage for a courtroom showdown.
The U.S. Court of Appeals for the Seventh Circuit denied the defendants’ petition, preventing NAR and the real estate franchisors from appealing the class certification decision and allowing the case to proceed as a class action.
This means the long simmering and closely watched case — known as Moehrl after the lead plaintiff — is likely headed to trial, though the district court has not yet set a trial date pending requests from the defendants that some class members’ claims be resolved through arbitration.
“While it’s not common for an appeal court to grant an early appeal on class certification, the National Association of Realtors is disappointed by the ruling,” NAR spokesperson Wes Shaw told Inman in an emailed statement.
“This decision is non-substantive and does not go to the merits of the case,” Shaw continued. “We look forward to making our case at trial and are confident we will prevail because pro-competitive, pro-consumer local MLS broker marketplaces ensure equity, efficiency, transparency and market-driven pricing options for home buyers and sellers.”
The May 24 ruling comes more than a month after NAR and the franchisors filed their petition seeking permission to appeal a district court ruling granting class-action status in the case, which was originally filed in 2019.
The suit alleges that some NAR rules — including one that requires listing brokers to offer buyer brokers a commission in order to list a property in a Realtor-affiliated multiple listing service (MLS) — violate the Sherman Antitrust Act by inflating seller costs. NAR has 1.5 million members nationwide; the vast majority are residential real estate agents and brokers.
Like a smaller federal case in Missouri known as Burnett (formerly, Sitzer), the Moehrl suit seeks to have homebuyers pay their brokers directly, rather than having listing brokers pay buyer brokers from what the seller pays the listing broker. Sitzer/Burnett goes to trial on Oct. 16.
At the Moehrl trial, potentially millions of homesellers in 20 MLS markets nationwide can ask to be reimbursed for an estimated $13.7 billion in damages. If the court awards treble damages, that figure could go up to $41.1 billion — an amount attorneys for the defendants stressed in their petition is “far more than the defendants’ combined market capitalization” and therefore pressures the defendants to settle to avoid “a catastrophic multibillion-dollar damages award.”
But in a response filing, attorneys for the plaintiffs said the defendants haven’t actually told the court what their assets are “which is required to show undue settlement pressure.” Plaintiffs’ attorneys also noted that the same defendants had argued they faced such pressure in the Sitzer/Burnett case, whose estimated damages are a fraction of those in the Moehrl case, but the defendants have not settled.
HomeServices, Keller Williams and RE/MAX declined to comment for this story. Anywhere (formerly, Realogy) did not respond to a request for comment.