Umpa commission lawsuit defendants look to get case dismissed

Defendants in the Umpa copycat commission lawsuit filed a slew of motions on Monday as they sought to have the class-action allegations to be struck down and dismissed.

Filed in late 2023 in the U.S. District Court for the Western District of Missouri, the lawsuit is named after its lead plaintiff, Maryland home seller Daniel Umpa. Like the other commission lawsuits, the Umpa suit alleges that the National Association of Realtors (NAR) and more than a dozen other real estate industry firms have colluded to artificially inflate agent commissions.

In addition to NAR, defendants in the suit include Keller Williams; HomeServices of America and its affiliates, eXp World Holdings and eXp Realty; Weichert Realtors; Howard Hanna; HomeSmart International; Douglas Elliman; The Real Brokerage; United Real Estate; At World Properties; Real Broker; Realty ONE Group; Compass; and Redfin.

Notably, since the Umpa suit was filed, Keller Williams has entered into a nationwide settlement agreement relating to all of the commission lawsuits.

HomeServices of America, along with its Berkshire Hathaway subsidiary Long & Foster, filed motions to strike the class-action allegations in favor of arbitration. Due to how HomeServices and its affiliates handle their client contracts, if a dispute arises, each client is entitled to individual arbitration of their claims.

In the Umpa suit — which is seeking class-action status for everyone in the U.S. who sold a house on an MLS and used an agent from one of the brokerage defendants between Dec. 27, 2019, and the present — 118 different client agreements that are subject to arbitration fall under the laws of 35 different states.

“This lawsuit falls within the scope of the Subject Arbitration and Listing Agreements, and HomeServices has the right to enforce them under state law of thirty-five states,” the motion reads. “Adjudicating the arbitration obligations of those absent putative class members who signed the Subject Arbitration and Listing Agreements will require analysis of one hundred eighteen different form agreements and applying the law of thirty-five states.

“There can be no clearer example of factual variation overwhelming any common, classwide question. No class can be certified in this scenario.”

HomeServices of America filed similar motions in the Sitzer/Burnett and Moehrl suits. The firm recently appealed to the U.S. Supreme Court regarding the Ninth Circuit’s ruling on the arbitration agreements in the Sitzer/Burnett suit.

Defendant United Real Estate also filed a motion to strike the class allegations, which it said were “to protect arbitration and class action waiver rights.” According to the motion, at least some of the putative class members in the suit would be bound by their seller agreements to arbitrate claims, similar to HomeServices’ claims.

United Real Estate also filed a motion to dismiss the suit for failure to state a claim. In its motion, the company stated that the plaintiff’s complaint alleges nothing more than United “participated in the real estate industry.”

“The Complaint is exceedingly short on factual allegations and alleges nothing that could support any inference of wrongdoing on the part of United,” the motion read.

Hanna Holdings, Douglas Elliman, Realty ONE Group and HomeSmart International also filed motions to dismiss the suit.

In its motion, Hanna Holdings claimed that it should be dismissed from the suit because it does not transact business in Missouri, and the neither the company nor any of its affiliates have Missouri contacts. Due to this, the court lacks jurisdiction under the Missouri long-arm statute and due process clause. If the court does not agree with this, Hanna Holdings suggested that the suit be transferred to the Western District of Pennsylvania, where it is a defendant in the Spring Way copycat commission suit.

Douglas Elliman also cites lack of jurisdiction in its motion to dismiss, stating that Douglas Elliman International and Douglas Elliman Realty are holding companies that are not licensed as real estate brokerages in Missouri or elsewhere. Additionally, the holding companies state that they have no employees or contacts in Missouri.

“The Complaint alleges no specific jurisdictional facts about either DEI or DER, and instead only alleges that ‘defendants’ generally — not DEI or DER specifically — have sufficient contacts with Missouri without any support whatsoever,” the motion states.

The firm also states than even though Douglas Elliman subsidiaries are not named in the suit, they should be disregarded because none of them are located or licensed in Missouri.

HomeSmart echoes this sentiment in its motion. It notes that it does not have franchisees incorporated under the laws of Missouri, it does not maintain a principal place of business in Missouri, and it does not transact business of “a substantial character” in the state.

Realty ONE Group makes similar claims in its motion, stating that there are no connections between the firm and the Western District of Missouri, so the court does not have jurisdiction.

The motion also notes that the only reference to Realty ONE in the complaint states factual information, including that it was founded in 2005; is headquartered in California and incorporated in Nevada with over 19,000 real estate professionals; and that it requires franchisees to join their local board of Realtors and maintain memberships with local MLSs.

“But neither of these basic facts about Realty ONE specifically, nor Plaintiffs’ conclusory allegations as to all Defendants generally, plausibly allege that Realty ONE agreed to an unlawful conspiracy with the NAR and twelve of the other largest real estate brokerages and franchisors to force home sellers to pay inflated commissions on the sale of their homes,” the motion states.

It remains unknown whether the court will grant any of these motions. The suit is currently being overseen by Judge Stephen Bough, who also presided over the Sitzer/Burnett trial.