March 29, 2023
An Illinois federal judge certified two classes of home sellers accusing the National Association of Realtors and several real estate brokerage firms of conspiring to charge “inflated” commission rates for buyer-brokers who sold homes, ruling on Wednesday that the suit’s claims meet several class certification requirements.
In her ruling, U.S. District Judge Andrea R. Wood certified the suit’s damages and injunctive relief classes after determining that there was commonality due to a “central, common question” of whether there was an antitrust conspiracy for inflating commission rates by using the National Association of Realtors rules, described as “challenged restraints.” The presiding judge also ruled that the home sellers listing their homes on multiple listing services, or MLS, that differed from those used by other class members didn’t negate typicality.
“That some class members listed their homes on different MLSs than plaintiffs does not create a typicality issue because all covered MLSs implemented the challenged restraints,” Judge Wood wrote. “As a result, plaintiffs’ claims share the same essential characteristics as the rest of the class and typicality is established.”
Judge Wood further ruled that the damages class has met the predominance requirement of class certification, which requires the “common question” of the suit to “predominate” individual claims. According to the ruling, the defendants had argued that the claims of the home sellers were so individualized that predominance was precluded.
“First, defendants improperly conflate the existence of individualized proof as to each defendant’s conduct with the need for individualized inquiries,” the judge ruled. “While the evidence might vary as to the nature of each defendant’s participation in the conspiracy, the same evidence will be relied upon by plaintiffs and members of the class.”
The judge added that the defendants’ arguments dealt with the merits of the class action, and those arguments are “inapplicable at the class certification stage.”
Additionally, Judge Wood ruled that the two expert opinions that supported the suit’s claims sufficiently showed that the alleged antitrust conspiracy affected the home sellers. One area where the defendants attacked the expert opinions was on the experts’ use of “steering theory.”
The experts for the home sellers found that the alleged conspiracy made buyer-brokers “steer” their clients away from using multiple listing services that offered commission rates lower than the “inflated” rates, according to the ruling. But the defendants argued that, even without the alleged conspiracy, buyer-brokers would still try to get paid as much as possible for home sales and that home sellers would offer “similar” commission rates to get their homes sold.
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The home sellers are represented by Susman Godfrey LLP, Hagens Berman Sobol Shapiro LLP, Handley Farah & Anderson PLLC, Cohen Milstein Sellers & Toll PLLC, Justice Catalyst Law and Teske Katz PLLP.
The complete story can be read on Law360 (subscription required).