In a legal brief filed on Monday, MLS Property Information Network (MLS PIN) made it clear that it does not agree with the Department of Justice‘s position on the banning of cooperative compensation, as outlined in the DOJ’s statement of interest in the Nosalek commission lawsuit.
The DOJ became involved in the Nosalek suit in late September 2023, intervening over what it described as “significant concerns” about the terms of the settlement agreement that MLS PIN and the Nosalek plaintiffs reached in June 2023.
In its most recent brief, MLS PIN stated that it had reached a “fair and reasonable settlement that fully resolves the disputed antitrust claims plaintiffs have asserted in this litigation.” It added that it believes the DOJ is effectively looking to hold a trial on the merits of the settlement.
“DOJ never denies that courts should avoid deciding uncertain legal questions at the settlement stage,“ the brief states. “And DOJ even tacitly acknowledges that approving a class settlement does not require resolving good-faith disagreements as to whether the settlement perpetuates allegedly anticompetitive practices.
“To the contrary, a class settlement in an antitrust action should be rejected as anticompetitive only when it perpetuates obvious ’per se’ antitrust violations under previously decided cases.”
According to the reply brief, MLS PIN believes that the DOJ’s core position is that “no settlement should be approved unless it affirmatively prohibits home sellers from offering compensation to buyer-side brokers — no matter whether the offer occurs on the MLS or off it (for example, on a broker’s website).”
The multiple listing service noted that the Massachusetts Supreme Judicial Court has recognized buyer-broker commissions for more than 100 years.
“Not only are these practices approved; they are widely recognized as beneficial to consumers, particularly first-time home buyers and others at risk of exclusion from the housing market. It is little wonder that DOJ’s position has been met with swift criticism by experts who say that it is the ‘worst possible outcome for millions of homebuyers.’”
MLS PIN also contends that “nothing in the proposed settlement between Plaintiffs and MLS PIN would limit DOJ’s ability to pursue changes to real estate market practices, in Massachusetts or anywhere else, through legislative advocacy or administrative rulemaking.”
The reply goes on to state that the “entirety of DOJ’s Statement sounds in the realm of policy and should be addressed to those bodies responsible for crafting statutes and regulations: namely, Congress or the Federal Trade Commission.”
Additionally, MLS PIN claims that the statistics the DOJ uses to defend its arguments “fail to measure up,” arguing that the DOJ’s “economic analysis is not replicable, and therefore, little more than junk economics.”
In contrast, MLS PIN argues that the amicus briefs filed by the Council of Multiple Listing Services and Northwest MLS “provide compelling explanations for why DOJ’s policy arguments fail on their own terms.” MLS PIN also noted that it fully adopts these two briefs.
Furthermore, the brief states that the policies proposed by the DOJ in its statement of interest go “far beyond what antitrust law requires,” and that they create an antitrust problem for MLS PIN, as it claims that it “cannot enter into an agreement to ban the publication of free-market compensation offers without offending the very antitrust principles DOJ claims to be protecting.
“To impose such a ban through a federal injunction would also suppress speech that is protected under the First Amendment. DOJ never denies that sellers have the right to compensate buyer brokers; it only advocates arbitrary restraints on the communication of compensation offers. But the payment of buyer-broker commissions has long been legal under Massachusetts and federal law,” the reply continues.
“This proposal to ban truthful and non-misleading speech made in furtherance of a lawful activity runs headlong into a string of Supreme Court cases recognizing that such bans cannot survive First Amendment scrutiny.”
As a result of these perceived issues, MLS PIN argues that the court should reject the DOJ’s policy arguments and “instead advance transparency in the Massachusetts real estate market by approving the proposed settlement.”
The Nosalek suit was originally filed in 2020 in U.S. District Court in Boston. The suit alleges that MLS PIN, Keller Williams, RE/MAX, Anywhere and HomeServices of America colluded to artificially inflate real estate agent commissions.
Eacch of the parties have since settled the lawsuit, and the settlements reached by Keller Williams, RE/MAX and Anywhere have been granted final approval by the court.
