California hit with yet another commission lawsuit

Real estate professionals in California are facing yet another commission lawsuit. Filed on Thursday in U.S. District Court in Sacramento by Willsim Latham, LLC., the copycat suit alleges that real estate industry players have colluded to artificially inflate real estate agent commissions.

The lawsuit names MetroList Services, the area’s MLS, Sacramento Association of Realtors, Placer County Association of Realtors, El Dorado County Association of Realtors, Lodi Association of Realtors, Yolo County Association of Realtors, Central Valley Association of Realtors, Amador County Association of Realtors, Nevada County Association of Realtors, and Sutter-Yuba Association of Realtors as defendants. Brokerages RE/MAX, Anywhere, Keller Williams, eXp World Holdings, NorCal Gold, Williams L. Lyon & Associates, Guide Real Estate, Paul M. Zagaris Real Estate, and Anywhere franchise Century 21 Select Real Estate, are also defendants in the lawsuit.

Unlike other MLSs, MetroList is not exclusively owned or operated by Realtor associations affiliated with the National Association of Realtors. Instead MetroList is owned and operated by local Realtor associations and California Real Estate Brokers, Inc.

Despite not being affiliated with NAR, MetroList adopted a rule similar to NAR’s Participation Rule, requiring listing agents to make a blanket offer of compensation to buyers’ brokers in order to list a property on the MLS.

“By agreeing to adopt, implement, and enforce the Anticompetitive Broker Rules, the Defendants participated in a conspiracy to restrain trade by requiring Class Members to pay the broker representing the buyer of their homes, and to pay inflated commissions,” the complaint states. “Defendants’ conspiracy inflated buyer broker commissions, which in turn inflated the total commissions paid by Class Members. Plaintiff and Class Members each incurred, on average, thousands of dollars in overcharges and damages due to Defendants’ conspiracy.”

The lawsuit is seeking class action status for all persons in the U.S. who paid a buyer broker commission in connection with the sale of residential real estate listed on MetroList MLS between Jan. 18, 2020, and the present.

The plaintiffs in the suit are demanding a jury trial, as well as damages and a permanent injunction that prevents the defendants from retiring that sellers pay the buyer broker.

Both eXp and Keller Williams now face several of these copycat commission lawsuits.

In an emailed statement, a spokesperson for eXp wrote that the firm has been tracking the initial Sitzer/Burnett suit for years and is confident in its ability to defend itself.

“We are 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,” the spokesperson wrote. “Our agile business model allows us to make adjustments seamlessly and effectively, no matter the jurisdiction.”

Over at Keller Williams, which was found liable for colluding to inflate agent commissions in the Sitzer/Burnett trial, Darryl Frost, a spokesperson for the firm said the company is focused on post-trial motions in the Sitzer/Burnett suit.

“There were serious errors in the Sitzer trial that was tried in Kansas City,” Frost wrote in an email. “Because of the disturbing verdict, many plaintiffs’ attorneys continue to file baseless copycat suits.” 

Defendants RE/MAX and Anywhere, as well as Anywhere franchise Century 21 Select Real Estate, are all part of settlement agreements in the Sitzer/Burnett, Moehrl and Nosalek commission suits, which has been preliminarily approved by the court.

The other defendants in the suit did not return a request for comment.