In a continued saga of antitrust commission lawsuits challenging the real estate industry’s practices, a new lawsuit dubbed “Batton 2” has taken center stage, with a unique twist—it’s brought forth by homebuyers, setting itself apart from prior cases initiated by home sellers.
The lawsuit, spearheaded by lead plaintiff Mya Batton, targets industry giants including Compass, eXp World Holdings, Redfin, Weichert Realtors, United Real Estate, Howard Hanna, and Douglas Elliman. It accuses them of collusion to artificially inflate agent commissions, consequently driving up home-buying expenses.
What sets Batton 2 apart from its predecessors, such as the Sitzer/Burnett, Moehrl, and Gibson lawsuits, is the absence of the National Association of Realtors (NAR) among the defendants. However, the influence of NAR resonates deeply within the plaintiffs’ complaint.
Filed on November 2nd in the U.S. District Court for the Northern District of Illinois Eastern Division, this lawsuit takes aim at NAR’s Clear Cooperation rule. This rule mandates listing brokers to offer compensation to buyer brokers to list properties on Realtor-affiliated MLS platforms.
The plaintiffs argue that this requirement makes it easier for buyer agents to steer clients toward properties offering higher commissions. The complaint contends that NAR’s rule fosters immense pressure on sellers to adhere to standard high commissions, dissuading anyone attempting to offer discounted rates.
The lawsuit asserts that this rule is designed to sustain high broker commissions for NAR members at the expense of homebuyers. It claims that without this regulation, buyers would negotiate agent commissions directly, prompting agents to compete by offering lower rates or superior services.
The plaintiffs claim to have incurred substantial overcharges, each amounting to thousands of dollars, due to the alleged conspiracy among defendants.
The lawsuit seeks class-action status, a jury trial, damages, and a permanent injunction to prevent the defendants from instituting similar rules in the future. Interestingly, Batton 2 introduces two proposed classes: a nationwide class covering all residential real estate buyers in the U.S. listed on NAR MLS since December 1, 1996, and a damages class encompassing specific states during the same period.
This legal battle is not unfamiliar territory for the defendants, who were also implicated in the Gibson lawsuit in Missouri. Moreover, the seven named plaintiffs in Batton 2 are involved in another ongoing lawsuit against NAR, Anywhere, Keller Williams, HomeServices of America, and RE/MAX, amplifying their legal pursuit against alleged commission inflation.
While Compass refrained from commenting on the lawsuit, other defendants remained silent or did not respond to requests for comments.
As this legal tussle unfolds, the repercussions could extend beyond the boundaries of Illinois, potentially reshaping the landscape of real estate agent commissions and MLS regulations on a national scale.
