MLS PIN challenges DOJ opinion in buyer-broker commission antitrust case
MLS Property Information Network (MLS PIN) has responded to the Department of Justice’s opinion in an antitrust lawsuit concerning buyer-broker commission practices, arguing that it creates an antitrust issue for the organization and infringes on First Amendment rights.
The 29-page response addresses the National Association of REALTORS® (NAR) March settlement agreement to end ongoing broker commission litigation and its impact on the class-action Nosalek lawsuit. In particular, it discusses NAR’s opinion on the case, which dates back to 2020, asking the courts to reject the DOJ’s opinion.
In September, Boston U.S. District Court Judge Patti Saris gave preliminary approval for MLS PIN’s settlement in the Nosalek case.
But in February, NAR offered its opinion on the case asking the court to deny preliminary approval saying that it still gives sellers and their listing brokers a role in setting compensation for buyers’ brokers.
“First, the only guaranteed ‘benefit’ to class members under the settlement is an injunction mandating certain changes to MLS PIN’s buyer-broker commission rule,” the DOJ said in its response. “These changes, however, would not create competition or reduce commissions. Instead, the settlement merely prescribes cosmetic changes, authorizing sellers to offer zero-dollar commissions, instead of the current minimum of one cent. But virtually no one will exercise that option for the same reason that they don’t offer one cent now: The modified rule still gives sellers and their listing brokers a role in setting compensation for buyers’ brokers.”
As part of its March settlement agreement in the Sitzer-Burnett case, NAR agreed to amend its compensation regulations including prohibiting offers of broker compensation or commission on the MLS. Broker compensation still can be negotiated and discussed, but it can’t be done through the MLS. It also requires MLS participants working with buyers to enter into written agreements with those buyers.
Saris gave both the plaintiff and MLS in the Nosalek case time to respond to the DOJ’s opinion. MLS PIN filed its response Monday.
MLS PIN says the DOJ’s position not only goes “far far beyond what antitrust law requires; it also creates an antitrust problem for MLS PIN where none existed.”
“MLS PIN 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,” the response says. “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”.
MLS PIN also contends the DOJ provides no authority over the matter and ignores federal cases and state statutes that approved the practice here in the Bay State.
“DOJ provides no authorities establishing that such a prohibition is required as a matter of antitrust law. And DOJ ignores many authorities — from federal cases to state statutes — approving the very practice it now seeks to prohibit through a settlement of civil litigation,” the court documents read.
“Notably, the Massachusetts Supreme Judicial Court has recognized buyer-broker commissions for over one hundred years. See Alvord v. Cook, 54 N.E. 499, 507 (Mass. 1899). 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.’”
