July 08, 2019

A massive class action concerning broker fees and a Zillow trade secrets suit are among the cases real estate lawyers will be watching in the second half of 2019.

A Chicago class action could fundamentally change the way residential brokers across the country get paid, while Zillow Inc.'s suit against Urban Compass Inc. calls into what question what exactly real estate tech trade secrets look like. And lawyers also say the second half of the year could see more retail bankruptcies.

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Broker Class Action

A suit filed earlier this year in Chicago takes aim at the nation's largest listing services, with the plaintiff arguing that the companies have violated federal antitrust laws by requiring home sellers to pay "inflated" commissions to both buy- and sell-side brokers. The suit could have a nationwide impact, lawyers say.

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The suit, brought by a recent home seller, challenges the National Association of Realtors' 1996 Buyer Broker Commission Rule that requires the seller to pay both commissions, which is often a total of roughly 6%. The suit cites lower commissions in other countries and notes that buyer brokers often have less of a role now than they once did, since many buyers now locate potential properties on their own thanks to the internet.

Jason Kellogg of Levine Kellogg Lehman Schneider & Grossman LLP said the breadth of the lawsuit is notable, since the outcome of the case could affect the way brokers across the country do business.

The plaintiff is represented by William Anderson and George Farah of Handley Farah & Anderson PLLC; Steve Berman, Elizabeth Fegan, Daniel Kurowski, Rio Pierce and Whitney Siehl of Hagens Berman Sobol Shapiro LLP; Matthew Berry, Beatrice Franklin, Marc Seltzer and Steven Sklaver of Susman Godfrey LLP; Robert Braun, Benjamin Brown, Alison Deich, Carol Gilden, Kit Pierson and Daniel Small of Cohen Milstein Sellers & Toll PLLC; Benjamin Elga and Brian Shearer of Justice Catalyst; and Marisa Katz and Vildan Teske of Teske Katz Kitzer & Rochel PLLP.

The complete article can be viewed here.