US home brokers face new lawsuits after $1.8 billion verdict

Agnt

03/11/2023 19:14

By Mike Scarcella
       Nov 3 (Reuters) - A pair of class action lawsuits filed
this week against major U.S. real estate brokerages are placing
new pressure on the industry following a $1.8 billion verdict in
Kansas City federal court for home sellers who claimed sales
commissions were artificially inflated.
    In one of the new cases, a prospective national class of
home buyers on Thursday sued companies including Douglas Elliman
 DOUG.N , Compass  COMP.N , eXp World Holdings  EXPI.O  and
Redfin  RDFN.O  in Chicago federal court. 
    In the other, the same plaintiffs' lawyers who won the
Missouri home sellers' trial verdict on Tuesday filed new
national claims on the same day in Kansas City federal court.
    The new Kansas City complaint also named Douglas Elliman,
Redfin, Compass, eXp World Holdings and other companies.
    The lawsuits challenge the longstanding industry practice of
requiring sellers to pay the commission, sometimes upwards of 5%
to 6%, to brokers representing the buyers in a home sale. The
cases allege a conspiracy in violation of U.S. antitrust law.
    "Our goal is to take the message from the state of Missouri
and take it nationwide so that homeowners in our country can
finally reap the benefits of technology and get these corporate
real estate giants' hands out of the homeowners' equity," said
plaintiffs' lawyer Michael Ketchmark, lead trial attorney in the
Missouri case and the national class action.
    The plaintiffs' firms in the new Chicago lawsuit, Korein
Tillery and Lowey Dannenberg, also filed a class action in 2021
for home buyers against other brokerages. That case is pending.
    An attorney for the plaintiffs in the new case declined to
comment on Friday.
    Douglas Elliman on Friday declined to comment, and Compass
did not immediately respond to a request for comment.
    Redfin on Friday declined to comment on the litigation. Its
CEO Glenn Kelman on Oct. 31 said the company has "campaigned
tirelessly for lower fees, commission transparency, and broader
consumer access to real estate listings."
    In a statement, eXp said it was "committed to upholding fair
and transparent practices compliant with law and we already have
mechanisms and a plan in place that enables buyers and sellers
to negotiate commissions."
    Other defendants in the new cases include Weichert Realtors,
United Real Estate and Howard Hanna Real Estate. Representatives
for those companies on Friday did not immediately respond to
requests for comment.
    The National Association of Realtors and other defendants in
the Missouri home sellers' class action trial have vowed to
challenge Tuesday's verdict. They have denied wrongdoing.
    Any appeal would land in the St. Louis-based 8th U.S.
Circuit Court of Appeals, which oversees federal cases in
Missouri and several other states.
    
    Read more:
    Shares of Elliman, other realtors fall after $1.78 billion
broker commission verdict
    US jury finds realtors liable for inflating commissions,
awards $1.78 bln damages

 (Reporting by Mike Scarcella)
 ((Mike.Scarcella@thomsonreuters.com;))