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This post will be updated as new lawsuits are filed.
Back in 2017, Minnesota resident Christopher Moehrl sold a house.
Moehrl paid a total broker commission of 6 percent, with 3.3 percent going to his own listing broker and 2.7 percent to the buyer’s agent. It was pretty standard.
But Moehrl apparently wasn’t happy about having to pay the buyer’s agent, and by 2019 he — represented by a handful of different attorneys — had filed a lawsuit. At the time, Inman described the case as the “bombshell lawsuit that could undo the U.S. real estate industry.”
It was a big deal, but in the years since a slew of other, similar cases have followed. Instead of one bomb, there’s a hail of metaphorical explosives raining down on real estate’s status quo. In general, the allegations in many of the cases are similar, raising antitrust concerns and claiming that major real estate players — both private companies and industry trade groups — conspire together to keep fees high.
Litigation in the initial cases moved slowly through the courts for the first few years. But since late October, when a jury sided with homeseller-plaintiffs in one of the highest profile suits, consumers have filed a string of new lawsuits in various states. The jury verdict, in other words, appears to have unleashed the floodgates for additional antitrust cases. While some critics have dismissed such cases as “copycat lawsuits,” that does not mean they may not end up having an impact; the recent verdict came in a case that itself was once called a copycat suit but is now sending shockwaves through the industry.
All of which is to say that the real estate industry is currently facing a multi-front assault from consumers and regulators across the U.S. And while it remains to be seen what happens when the dust settles, the industry is increasingly bracing for major disruption.
What follows is a list of the major bombshell cases and generally where in the litigation process they currently stand. Inman will update this list as the cases evolve and if additional suits are filed.
Sitzer | Burnett
Sitzer | Burnett has been the highest profile case lately because it went to trial in October in Missouri. A jury ultimately ruled in favor of the homeseller-plaintiffs in the case, agreeing that the National Association of Realtors (NAR) and various large franchisors conspired to keep commissions high. At issue was NAR’s cooperative compensation rule, also known as the Participation Rule, which requires listing brokers to make an offer of compensation to buyer brokers in order to submit a listing to a Realtor-affiliated MLS.
The jury awarded $1,785,310,872 in damages, which, under the law, will be automatically trebled to $5.356 billion.
Though a verdict was reached in the case, the defendants have vowed to appeal. But in the meantime, the outcome has shocked the real estate industry and apparently opened the door for a number of other, similar cases.
It’s worth noting that Anywhere and RE/MAX were both among the defendants in the case, but ended up filing settlement proposals before the trial began. They consequently did not participate in the defense during the trial. Defendants Keller Williams, HomeServices and HomeServices subsidiaries BHH Affiliates and HSF Affiliates did not file settlements.
Moehrl
The Moehrl case had been the biggest and highest profile of the various bombshell lawsuits until Sitzer | Burnett beat it to trial. The case revolves around the same issues raised in Sitzer | Burnett: The Participation Rule, as well as the claim that NAR and the same group of franchisors have conspired to keep agent commissions and consumer costs high.
The case is playing out in Illinois and is expected to go to trial next year.
As with Sitzer | Burnett, Anywhere and RE/MAX have submitted proposed settlements to Moehrl.
Gibson
This was the first of the so-called “copycat” suits filed in the immediate wake of the Sitzer | Burnett verdict on Oct. 31, 2023. The same legal team that represented the homeseller-plaintiffs in Sitzer | Burnett filed the case — mere minutes after the verdict no less — but it names a new group of defendants: Compass, eXp World Holdings, Redfin, Weichert Realtors, United Real Estate, Howard Hanna Real Estate, Douglas Elliman and the National Association of Realtors.
The Missouri-based suit promises to be much bigger than either Sitzer | Burnett or Moehrl in terms of scope; it seeks class-action status on behalf of “all persons who listed properties on a Multiple Listing Service in the United States using a listing agent or broker affiliated with” the corporate defendants and who paid a buyer broker commission from October 31, 2019 until the present.
Batton 1
This case began in early 2021. It’s especially significant because unlike Sitzer | Burnett, Moehrl and Gibson, it involves homebuyer-plaintiffs, not sellers. The New Jersey-based case was originally known as Leeder after its first lead defendant. A judge dismissed the case in May 2022, but the buyer-plaintiffs then filed an amended complaint in July 2022, bringing it back to life. Another homebuyer, Mya Batton, became the lead plaintiff at that time — hence the case’s name, “Batton.”
The suit names as defendants NAR, Anywhere, HomeServices of America and a pair of its affiliates, the Long and Foster Companies, RE/MAX, and Keller Williams. Motions to dismiss this suit are currently pending.
Batton 2
Mya Batton and other consumers filed another antitrust lawsuit on Nov. 2, 2023. The case is thus brand new, but right now is seeking class-action status and names as defendants Compass, eXp World Holdings, Redfin, Weichert Realtors, United Real Estate, Howard Hanna Real Estate and Douglas Elliman.
This case is significant because, as with Batton 1, it involves homebuyers rather than sellers, and because it’s potentially massive in scope: If the plaintiffs get their way, the class it represents could include consumers across the U.S. who bought a house anytime between 1996 and the present.
Similar to the other cases, Batton 2 targets NAR’s Participation Rule.
Burton
This is yet another brand new antitrust case filed in the wake of the Sitzer | Burnett verdict. Homeseller Shauntell Burton filed the suit in South Carolina on Nov. 6, 2023. Burton is seeking class status, and has named NAR and Keller Williams as defendants.
Like other, similar cases, the main policy the Burton suit challenges is NAR’s Participation Rule. Also like other antitrust cases, the Burton complaint accuses the defendants of carrying out a conspiracy that ultimately inflates costs for consumers. The scope of Burton is considerably smaller than the other suits, seeking class certification only for people who used a Keller Williams agent from Nov. 6, 2019, through the present to sell a home via “one of the MLSs that comprise the real estate market of the District of South Carolina.”
March
New York City homeseller Monty March filed a federal antitrust lawsuit Nov. 7, 2023 against the Real Estate Board of New York (REBNY) and more than two dozen real estate companies including Compass, Coldwell Banker, The Agency and others. The case is thus part of the flood of new lawsuits coming in the wake of the Sitzer | Burnett verdict.
The March suit challenges REBNY rules governing the multiple listing service in Manhattan, claiming that such rules kept commissions high and violated state and federal antitrust laws. The case seeks class certification for Manhattan homesellers who transacted between Nov. 8, 2019, and the present.
Nosalek
The Nosalek case began in 2020 and names as defendants MLS Property Information Network (MLS PIN), Anywhere, HomeServices and its affiliates, RE/MAX and Keller Williams.
This case centers on the so-called “Buyer Broker Commission Rule.” The plaintiffs in the case have argued that the broker-owned multiple listing service MLS PIN wasn’t required to follow NAR rules — but still adopted a policy similar to NAR’s that requires sellers’ brokers to offer compensation to buyers’ brokers in order to submit a listing to the service.
Anywhere and RE/MAX agreed to settle the case in late October. However, all the parties asked for a stay, or temporary pause, of 30 days to determine the “appropriate treatment” of the plaintiffs in the case.
The Department of Justice case
Simmering in the background of all these lawsuits is an ongoing legal battle between NAR and the Department of Justice. The battle began in 2020, when the DOJ sued NAR over what it characterized as illegal constraints on competition. The DOJ announced a settlement with NAR at the same time as it revealed the suit, which initially made it seem like an open-and-shut situation.
However, in 2021, the DOJ said it was pulling out of the settlement — reigniting a legal fight that continues to this day. Shortly after withdrawing from the settlement, the DOJ also resumed its investigation into NAR, including the Participation Rule that’s also at the center of many consumer-led lawsuits.
Since 2021, NAR has argued in court that the original settlement should stand.
New public developments in the DOJ case slowed as the Sitzer | Burnett trial came and went. However, it was a constant issue looming over the proceedings. And in October, attorneys for the DOJ intervened in the Nosalek case and raised concerns about the proposed settlements. The intervention put the settlements on ice for a couple of months.
The plaintiffs’ attorneys in the Sitzer | Burnett case have also lately been in talks with the DOJ.
It remains to be seen what may happen with the DOJ, but some industry experts have speculated that the feds could ultimately force greater disruption on the real estate industry than any of the consumer-led commission lawsuits.
Correction: This post initially included a reference to Christopher Moehrl as a buyer. His lawsuit stems from his experience as a seller.
Email Jim Dalrymple II
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