DOJ intervention puts MLS commission settlement on ice

Publish Date: October 03, 2023

Written by Andrea V. Brambila

- Originally published at Inman News - Andrea V. Brambila

The homeseller plaintiffs agreed to a two-month extension of deadlines related to a proposed deal with MLS PIN after the federal agency asked for time to assess the deal’s “competitive impact.”

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Well, looks like what the U.S. Department of Justice wants, it gets. Homeseller plaintiffs in an antitrust commission lawsuit filed against the largest multiple listing service in New England have agreed to a deadline extension to review a proposed settlement in the case, essentially putting the deal on ice for two months.

On Friday, attorneys for the DOJ’s Antitrust Division asked Judge Patti Saris of the U.S. District Court in Massachusetts for the extension; attorneys for the plaintiffs fired off a spirited objection the next day.

But on Tuesday, attorneys for the plaintiffs and the DOJ submitted a joint filing noting that Saris had asked them to “attempt to agree on a proposed schedule for the Court’s approval” and that they had mutually agreed to extend by two months the upcoming deadlines for reviewing the agreement between the plaintiffs and broker-owned multiple listing service MLS Property Information Network (MLS PIN). 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 filing did not say why the plaintiffs had changed their minds and agreed to the extension requested by the DOJ. Inman has reached out to plaintiffs’ attorney Seth Klein of Izard, Kindall & Raabe and to the DOJ’s Antitrust Division and will update this story if and when responses are received. MLS PIN declined to comment.

Saris approved the deadline extension in an order posted Tuesday afternoon.

As part of the 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/MAXKeller Williams and HomeServices of America.

If the court ultimately approves the settlement as-is, MLS PIN will remove a requirement that homesellers must offer compensation to buyer brokers; will require 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 will clarify that if the seller makes an offer to a buyer broker and the buyer makes a counteroffer, “then any commission to be paid is negotiated among the seller, the buyer, the seller broker, and the buyer broker,” according to the notices set to be provided to settlement class members.

But in their Friday filing, attorneys for the DOJ said they had “significant concerns with the planned rule changes under the Proposed Settlement” and asked Saris to extend deadlines for review of the settlement by two months so that the Antitrust Division could “assess the competitive impact of the Proposed Settlement.”

The plaintiffs’ attorneys objected to the requested extension on the grounds that the DOJ had “ample time to investigate and file an objection” and the delay “would prolong the life of the Rule that Plaintiffs managed to eliminate, and subject additional homebuyers in Massachusetts to its anticompetitive effect.”

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.

Due to the extension, the date the parties must start notifying settlement class members about the deal has moved from Oct. 17 to Dec. 15, the deadline to file motions for final approval of the settlement has moved from Oct. 23 to Dec. 21, the last day for objections to the settlement to be filed with the court has changed from Dec. 7 to Feb. 5, the last day to respond to any objections has moved from Dec. 21 to Feb. 20, and the hearing for final approval of the deal has changed from Jan. 4 to March 7.

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. 

The Sitzer/Burnett case is set to go to trial on Oct. 16 and end around Nov. 3. Therefore, that case is now likely to be decided well before any of the new settlement deadlines in Nosalek must be met.

Editor’s note: This story has been updated to note that the judge approved the two-month deadline extension.

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