Judge M. Page Kelley pushed back against the real estate holding company formerly known as Realogy, noting that NAR’s buyer broker commission rule is “virtually identical” to that of MLS PIN.
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A federal court judge may be on the cusp of requiring Anywhere Real Estate to turn over documents on its nationwide implementation of a controversial National Association of Realtors’ commission rule after holding arguments in Massachusetts Monday morning.
The antitrust case known as Nosalek, after its lead homeseller plaintiff (formerly, Bauman), alleges that large, broker-owned multiple listing service MLS Property Information Network (MLS PIN), which boasts approximately 46,000 agent and broker subscribers, is not directly required to abide by NAR rules but has nonetheless adopted a rule similar to a NAR rule that requires listing brokers to offer a blanket, unilateral offer of compensation to buyer brokers in order to submit a listing to MLS PIN.
The plaintiffs call the rule the “Buyer Broker Commission Rule.”
In August, the plaintiffs filed a motion to compel defendant Realogy to produce all documents relating to its implementation of the rule across the country — not just in the MLS PIN service area, which includes Massachusetts, Rhode Island and New Hampshire. (Although Realogy changed its name to Anywhere earlier this year, the company is still referred to as Realogy in the legal filings including by its own attorneys.)
According to the plaintiffs’ filing, all of the other real estate franchisor defendants — RE/MAX, Keller Williams and HomeServices of America — have agreed to produce documents on their implementation of the rule nationwide, so long as those documents aren’t tied to implementation of the rule in specific geographic regions other than that of MLS PIN.
Because of the similarity of the NAR rule and the MLS PIN rule and because of the alleged power of the franchisors over both, the motion contends that the defendants’ discussions about the NAR rule may be relevant to their thoughts on the MLS PIN rule. However, Anywhere opposes the plaintiffs’ efforts to expand discovery in the case beyond MLS PIN’s service area.
“I am just a little baffled about why you wouldn’t join in the compromise that everyone else has,” Magistrate Judge M. Page Kelley told Stacey Anne Mahoney, counsel for Anywhere at the hearing.
“It just seemed like you’re kind of an outlier on that.”
Mahoney responded that discovery should address the claims in the plaintiffs’ amended complaint, in which MLS PIN’s rule is at issue and not NAR’s rule. Unlike other, similar federal commission suits Moehrl and Sitzer/Burnett, Nosalek does not name NAR as a defendant. Mahoney also noted that Realogy would not have any information about why MLS PIN adopted the rule because Realogy did not exist until 2006 and MLS PIN adopted the rule in 1996. (Realogy predecessor HFS did exist in 1996.)
But Kelley pushed back, noting that the rules are “virtually identical” and the same parties are talking about them. Moreover, because plaintiffs have to provide evidence of the defendants’ alleged conspiracy, the documents requested could be relevant, according to Kelley.
“Whether you were there at the inception or not, I agree with plaintiffs’ counsel, it still doesn’t mean that you never said anything that would be relevant to this case with regard to issues in the rest of the country to a virtually identical rule,” Kelley said.
“And if [plaintiffs’] burden is to show that these same parties had some ‘conscious commitment to a common scheme,’ I think there may well be relevant information out there where you’re discussing a rule somewhere else that’s just basically the same.”
She also observed that Realogy had been around for “a long time” and participating in at least the carrying out of the commission rule.
“So even if you weren’t there at the inception … I do think [plaintiffs’ attorney Seth Klein’s] argument is broader than that,” Kelley said.
Kelley asked why the Nosalek lawsuit was filed separately from the Moehrl and Sitzer/Burnett lawsuits. Klein said that the Nosalek plaintiffs were “not coordinating with the other plaintiffs’ counsel” and that they filed their suits in other geographic regions.
Kelley ended the hearing by saying she would not make her decision immediately.
“I’m going to just take this under advisement at this time and not rule right this second and take a closer look at all of this,” she said.