The case is the latest of numerous antitrust lawsuits that have emerged in the wake of the October verdict in Sitzer | Burnett. It names NAR, Compass, Redfin and others as defendants.
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The year is just about done, but one more big commission lawsuit was nevertheless filed just under the wire, in this case by a Maryland homeowner who has sold properties in multiple states.
Daniel Umpa filed the case Wednesday in the United States District Court for the Western District of Missouri. Though the case was filed in Missouri — the same place where the Sitzer | Burnett suit is being litigated — Umpa is a resident of Maryland. His suit stems from sales of properties he owned in both his home state and in Ohio. The complaint in the case mentions that Redfin represented him for his Ohio sale and Compass in Maryland and that, in both cases, he “paid a substantial buyer-broker compensation.”
Similar to other major commission suits, Umpa’s case argues that the National Association of Realtors and various real estate companies engaged in a conspiracy “to impose, implement and enforce anticompetitive restraints that cause home sellers to pay inflated commissions on the sale of their homes, in violation of federal antitrust law.” The case specifically takes issue with the practice of having sellers’ brokers offer compensation to buyers’ brokers, something known as the cooperative compensation rule or Participation Rule.
“Specifically, NAR and its co-conspirators require every listing broker (i.e., the broker representing the seller) when listing a property on a Multiple Listing Service, to make a ‘blanket unilateral offer of compensation’ to any broker who may work with a buyer in purchasing that property,” the complaint argues.
This argument is essentially the same one that most other commission suits, including many that were filed after the October verdict in Sitzer | Burnett, are making.
The case names more than a dozen defendants. They include NAR, Keller Williams and HomeServices of America and its affiliates — all of whom are also defendants in Sitzer | Burnett as well. Additionally, Umpa has also named Redfin, eXp World Holdings and eXp Realty, Compass, Weichert Realtors, Howard Hanna, HomeSmart International, Douglas Elliman, the Real Brokerage and others as defendants.
In an emailed statement on the new suit, NAR spokesperson Mantill Williams told Inman “the cooperative compensation practice makes efficient, transparent, and accessible marketplaces possible.”
“Sellers can sell their home for more and have their home seen by more buyers while buyers have more choices of homes and can afford representation,” the statement added. “The National Association of Realtors will respond to this complaint in court.”
Keller Williams spokesperson Darryl Frost told Inman in an email that “we believe when it comes to the future of residential real estate, the buyers’ agent role may not be in jeopardy if not for serious errors in the Sitzer trial that was tried in Kansas City.”
“The court allowed the jury to believe that home sellers wouldn’t pay a buyers’ agent even one cent, failing to mention that this is the very practice allowed under Missouri statute,” Frost continued. “Because of the disturbing verdict, many plaintiffs’ attorneys are filing baseless copycat suits. Evidence was presented at trial but not admitted — which misinformed the jury.”
The Real Brokerage issued a statement on the case Thursday confirming that it was named as a defendant but adding that it “is currently evaluating the complaint and at this time cannot provide further details or comments.”
Compass declined to comment on the case.
Inman will update this story with any responses the other defendants in the case provide.
The case is seeking class-action status that would cover everyone in the U.S. who sold a house on a multiple listing service and used one of the defendant companies between Dec. 27, 2019, and the present. The case carves out exceptions to the class for sales in which the listing broker was affiliated with Keller Williams or HomeServices. The exceptions have to do with when those sales occurred and which MLSs were involved.
However, in seeking class-action status that would cover the entire U.S., the case is similar to Batton 1 and Batton 2, both of which seek class certification on behalf of sellers nationwide — though the Batton cases aim to go all the way back to 1996, not just 2019 as Umpa does.
It remains to be seen how the new Umpa case might play out, but whatever happens, it’s part of a growing number of similar antitrust lawsuits that challenge the way agents get paid. Sitzer | Burnett and Moehrl, a similar case in Illinois, have been in litigation for years, but many of the other cases were filed in the final quarter of 2023, after the Sitzer verdict.
The Umpa case ultimately requests a jury trial, a declaration that the defendants’ actions broke the law, and undisclosed damages, among other things.
Read the full complaint in the new case here:
Update: This post was updated after publication with comment from defendants in the case, and with a PDF of the complaint.
Jim Dalrymple II
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