The parties involved in the Nosalek commission lawsuit got a sweet treat for Valentine’s Day from Judge Patti B. Saris. After three weeks of going back and forth, Saris granted the plaintiffs’ motion to administratively stay the lawsuit.
As a result, the docket was listed as closed as of Thursday morning before being reopened at midday. That’s because the deadline for the Department of Justice (DOJ) to file its statement of interest in the MLS Property Information Network (MLS PIN) settlement agreement is at the end of the day Thursday.
In her order Wednesday that granted the motion to stay the case, Saris wrote that any party has the right to restore the suit to the active docket. The plaintiffs’ original motion to stay the litigation only discussed doing so for the brokerage defendants.
Named after its lead plaintiff, the Nosalek suit alleges that MLS PIN, HomeServices of America, Keller Williams, RE/MAX and Anywhere colluded to artificially inflate real estate agent commissions.
MLS PIN is broker-owned, so it is not required to abide by the rules of the National Association of Realtors (NAR), including its Participation Rule. But MLS PIN has nonetheless adopted a similar rule that requires listing brokers to offer a blanket, unilateral offer of compensation to buyer agents in order to submit a listing to MLS PIN.
The suit was first filed in 2020 in U.S. District Court in Boston.
All of the defendants in the suit, except for HomeServices of America, have settlement agreements related to the Nosalek suit.
The settlement agreements reached by Anywhere and RE/MAX with the Nosalek, Sitzer/Burnett and Moehrl plaintiffs have been preliminarily approved by Judge Stephen Bough, who oversaw the Sitzer/Burnett trial, and are awaiting their final approval hearing, which is set for May 2024.
Additionally, Keller Williams announced earlier this month that it had reached a nationwide settlement with the Sitzer/Burnett and Moehrl plaintiffs. The Keller Williams settlement has yet to receive preliminary approval.
Like the brokerage defendants, MLS PIN has also reached a settlement agreement with the plaintiffs in the Nosalek suit. But the DOJ intervened in September 2023, stating that it had “significant concerns” about the settlement.
In the proposed agreement, MLS PIN said it would pay $3 million, change its commission policies and cooperate with the remaining defendants in the lawsuit.
According to the proposed settlement, of the $3 million MLS PIN has agreed to pay, up to $900,000 will go toward attorneys fees; up to $200,000 will go to expenses; $250,000 will go toward notifying settlement class members; and each of the three lead plaintiffs will get up to $2,500 for being class representatives.
The remaining $1.64 million would be used to pay for further expenses for the litigation against the remaining defendants “for the benefit of Settlement Class Members,” according to the filing.
In mid-December, the DOJ informed Saris that it still had concerns over the second amended settlement that MLS PIN filed. The DOJ claims that the proposed settlement does not adequately open up competition.
“MLS PIN’s proposed rule changes still establish an elaborate protocol (under penalty of sanction) regulating buyer-broker commissions, including requiring the listing broker to initially set the ‘total amount of compensation offered’ (including the number zero) in the listing,” the DOJ wrote. “Thus, MLS PIN would continue to organize and facilitate brokers’ blanket, unilateral offers of compensation to buyer brokers.”
In addition to the settlements, a multidistrict litigation (MDL) panel is currently discussing whether or not to consolidate the Nosalek suit, as well as eight other commission lawsuits, for the purpose of pretrial proceedings.
Due to opposition to consolidation and its lack of a settlement, HomeServices of America was the only party that opposed the plaintiffs’ motion to stay the case.
“The ongoing settlement efforts with other Defendants does not provide a basis to stay or delay Plaintiffs’ case as to the HomeServices Defendants, which oppose a stay,” the company wrote in its opposition filed in early February. “These settlements are largely not new developments and Plaintiffs make no showing of hardship or inequity if they were required to go forward with their case against the HomeServices Defendants.”
In an email statement, Chris Kelly, an executive vice president at HomeServices of America, said that his firm does not feel that the cases are “appropriate for consolidation given the unique circumstances of every home seller and transaction. These unique characteristics make a class certification improper in any singular case, and these issues will only be exasperated in an MDL setting. We did request oral arguments in the alternative, to address appropriate venues for an MDL.”
The other defendants in the suit declined to comment on Saris’ decision.
