Policy & Legal Matters: NAR Secures

NAR Secures Courtroom Victory in Leeder Case

By Jordan Grice The National Association of REALTORS® (NAR) can put at least one of its commission-related lawsuits in the rearview mirror.

The U.S. District Court for Northern Illinois ordered to dismiss the Leeder v. The National Association of Realtors et al. antitrust case on May 2 after more than a year of both sides duking it out in court.

“Although other district courts have permitted indirect purchasers to proceed with their injunctive relief claims even when the direct purchasers are seeking the same relief, the Court finds those cases inapposite to the circumstances here,” wrote U.S. District Court Judge Andrea R. Wood in a memo accompanying her decision to dismiss the lawsuit.

“Moreover, in both cases allowing indirect purchasers and direct purchasers to seek injunctive relief simultaneously, the indirect purchasers remained participants in the affected market,” Wood wrote. “Leeder has already purchased his home and does not allege that he intends to purchase a new home in the future.

“It, therefore, does not appear that Leeder faces ‘a significant threat of injury from an impending violation of the antitrust laws or from a contemporary violation likely to continue or recur,’” she added.

The ruling was met with a celebration by NAR, which claimed that it was pleased with Judge Andrea R. Wood’s decision to lay the “baseless complaint” to rest.

“The pro-competitive, pro-consumer local broker marketplaces serve the best interests of buyers and sellers,” said NAR spokesperson Mantill Williams in an emailed statement. “Sellers making offers of compensation to buyer brokers gives first-time, low/middle-income and all homebuyers a better shot at affording a home and professional representation to navigate this critical purchase.”

The lawsuit took issue with a longstanding MLS policy called the Participation Rule—also known as the “Buyer Broker Commission Rule”— which mandates that brokers list buyer agent compensation as a prerequisite to listing a property on certain multiple listing services.

The plaintiff, Judah Leeder, bought a home listed on a local MLS with the help of an agent and alleged that the policy was anti-competitive and led to “artificially inflated, supracompetitive commission rates being incorporated into purchase prices for homes.”

The case also named Realogy Holdings Corp., HomeServices of America, Inc., HSF Affiliates, LLC, Long & Foster Companies, Inc., BHH Affiliates, LLC, RE/MAX LLC, and Keller Williams Realty, Inc. as defendants.

The lawsuit claimed that the companies “engaged in a conspiracy” that violated the Sherman Act.

Leeder’s case is similar to a pair of antitrust lawsuits challenging the same MLS rule—Moehrl v. The National Association of Realtors and Sitzer et al. v. National Association of Realtors et al.—but both cases argue that the rule directly harmed the home sellers.

While Wood ruled in favor of NAR in the Leeder case, she also appeared to agree with the notion that sellers were at risk by the alleged violations in her memo.

“The Court agrees that home sellers, as the direct purchasers of buyer-broker services, are necessarily more directly injured by Defendants’ alleged antitrust violations,” Wood wrote. RE

Jordan Grice is an associate online editor at RISMedia. Email your real estate news ideas to him at jgrice@rismedia.com.