Real estate brokerage HomeServices of America and two affiliates have filed for a summary judgement in a class action lawsuit about buyer broker commissions known as the Nosalek case.
Originally filed in December 2020, the lawsuit, named after its lead plaintiff, alleges that the broker-owned MLS Property Information Network (MLS PIN) is not directly required to abide by the National Association of Realtors (NAR) rules. However, it has nonetheless adopted a rule similar to an NAR rule requiring listing brokers to offer a blanket, unilateral offer of compensation to buyer brokers in order to submit a listing to MLS PIN.
Other defendants in the lawsuit include Anywhere, RE/MAX, and Keller Williams.
In the motion, filed on Friday in a U.S. District Court in Boston, the HomeServices defendants ask the court to issue a summary judgement “with respect to the element of conspiracy critical to plaintiffs’ Sherman Act claim.”
In March 2021, the HomeServices defendants filed a motion to dismiss the lawsuit. In her ruling, Judge Patti Saris agreed with the plaintiff’s allegations that the HomeServices defendants “agreed to participate in the claimed conspiracy by ‘requiring [their] franchisees and agents to participate in MLS PIN and follow its rules,’ including the Rule at issue,” and that “’HomeServices was represented on the MLS PIN board of directors by at least one Realtor from a related franchise,’ who ‘represent[ed] HomeServices’ interests.’”
In the most recent filing, the HomeServices defendants claim that their records show that these allegations are false, meaning that the plaintiffs have no evidence that the HomeServices defendants were part of a conspiracy to create, implement or enforce MLS PIN’s buyer broker commission rule.
According to the filing, of the three HomeServices defendants, two are holding companies and the third is a real estate franchisor. As such, HomeServices argues that it is not responsible for the alleged conduct of independently owned and operated franchises. In addition, HomeServices says that it does not require franchisees to join any MLS, including MLS PIN. However, BHH Affiliates, of which there are 14 of in MLS PIN’s service area, requires independent franchisees to provide BHH Affiliates with access to a data feed of whatever MLSs they use, but this only applies to MLSs they are already using.
“The record shows that BHHS franchisees made any decision to join MLS PIN independently, in most cases well before the brokerages even became affiliated with the BHHS or Real Living brand and that decision created whatever obligation exists to follow MLS PIN rules,” the filing reads. “Virtually all the Independent Franchisees were fully operational brokerages before entering into a franchise agreement with BHH Affiliates and made independent decisions to join MLSs.”
The filing also states that Patrick Fortin, who is an executive at Commonwealth Realty Group LLC, a Berkshire Hathaway HomeServices affiliate, and serves on the MLS PIN board of directors, joined the board in January 2018, when his firm was a Century 21 franchise.
“The HomeServices defendants were not aware that Fortin was serving on the Board before this lawsuit was filed. Indeed, Fortin has not had any material discussions about MLS PIN activities or rules with CRG. Further, neither he nor CRG has had any discussions with the HSDs about the Buyer-Broker Rule or cooperative compensation more generally,” the motion states.
In addition, the MLS PIN rule being called into question by the lawsuit was set in place in 1998, 20 years prior to when Fortin joined the board, and the HomeServices defendants claim the MLS PIN has never invited them to enter into an agreement pertaining to the so-called buyer broker commission rule.
The HomeServices defendants also claim that the Nosalek lawsuit differs from the two other class action commission related lawsuits, Burnett and Moehrl because there are no HomeServices of America subsidiaries in the MLS PIN network, and that MLS PIN is not a NAR MLS, so the allegations in the lawsuit that the HomeServices defendants encourage their agents to join local or state Realtor associations have no relevance.
Due to these reasons, the HomeServices defendants claim that the plaintiffs “cannot demonstrate a triable issue of fact as to their claim, that the HomeServices defendants made a ‘conscious commitment’ to the alleged conspiracy, and that due to this, the HomeServices defendants should not be subject “to broad discovery or class certification proceedings.”
In late June, MLS PIN signed a settlement agreement that would force it to pay $3 million, overhaul its policies and cooperate against the remaining real estate franchisor defendants in the suit.
MLS PIN denied any wrongdoing of liability in the settlement agreement but stated that it agreed to the settlement in order “to avoid the further risk, expense, inconvenience, and distraction of burdensome and protracted litigation, and thereby to resolve this controversy, to avoid the risks inherent in complex litigation, and to obtain complete dismissal of the Action as to MLS PIN.”
HomeServices of America, MLS PIN, Anywhere and Keller Williams declined to comment on the latest update to the lawsuit and RE/MAX had not returned a request for comment by the time of publication.
