HomeServices of America and Douglas Elliman can now breathe easy after a Florida judge granted their request to dismiss a homebuyer commission complaint against them.
U.S. District Judge Michael K. Moore dismissed Count 1, injunctive and equitable relief under the Sherman Act, with prejudice. Meanwhile, Count 2 (violation of state antitrust statutes), Count 3 (violation of state consumer protection statutes), and Count 4 (unjust enrichment) have been dismissed without prejudice.
Counts that are dismissed with prejudice cannot be refiled. Dismissing counts without prejudice, on the other hand, means that they can be filed again later.
Christian Kelly | Credit: LinkedIn
“We believe the Court reached the right decision in granting the motion to dismiss the Lutz case, and we appreciate the Court’s thoughtful and well-reasoned opinion,” Christian Kelly, president and CEO of HomeServices, told Inman in an emailed statement. “While some state law claims were dismissed without prejudice, the ruling highlights the significant legal and factual hurdles the plaintiffs face in pursuing those claims.”
“From the beginning, the buyer-side and seller-side class actions have presented conflicting legal theories, further underscoring the complexity of these matters.”
James Lutz filed the complaint against HomeServices of America and Douglas Elliman in May 2024, alleging that the brokerages and other members of the National Association of Realtors (NAR) fixed commissions and misled homebuyers about how commissions are paid.
Lutz purchased a home in 2021 and was represented by a Berkshire Hathaway HomeServices agent. Lutz claimed Berkshire Hathaway HomeServices misrepresented the cost of purchasing a home, due to NAR’s now-defunct “Free Service Rule,” which, in the past, allowed buyers’ agents to represent their services as free of cost since listing agents, in most cases, share a portion of their commission with buyers’ agents.
Lutz claimed homebuyers could save “$30 billion or more annually” in broker fees if there were “effective price competition,” and sought class-action status for the complaint.
“For decades, homebuyers across America have been unwittingly paying too much for, and receiving too little from, services offered to them by Defendants and other real estate agent members of National Association of Realtors (‘NAR’),” the initial complaint read. “Despite agent representations (which NAR permits and encourages) that such services do not cost homebuyers anything, homebuyers in fact pay a hefty cost for these services — namely, supracompetitive commissions at levels fixed by the Defendants, NAR, and other real estate brokers, which in turn lead to higher home prices paid by buyers.”
However, the Court felt Lutz’s argument fell flat, saying that homesellers — not homebuyers — are “efficient enforcers of the antitrust laws” and “better suited to seek antitrust relief.”
“Plaintiffs allege that home sellers agree to pay their seller agents a total commission, and under the NAR Rules, buyers never learn how much of the total commission their buyer agents are ultimately paid,” the order read. “The ‘implication,’ then, is that buyers ‘will never be expressly or directly charged that commission.’” Furthermore, Plaintiffs’ belief that the Realtor services were “free and not reflected in the home price,” is immaterial where, even if that belief were justified, the commissions were paid for by the home sellers.”
As for the other counts, the Court agreed that Lutz failed to adequately “spell out alleged anticompetitive conduct in detail and alleged how that conduct violated the identified laws,” and did not give HomeServices of America and Douglas Elliman, which was only included in Count 2, “adequate notice of the claims against them and the grounds upon which each claim rests.”
Lutz has 21 days to file a third amended complaint, which cannot include Count 1, since it was dismissed with prejudice.
Kelly said HomeServices is prepared to keep defending itself if Lutz files another complaint.
“We remain confident in our position and will continue to defend against claims that misrepresent how the real estate industry and our agents serve consumers,” he said.
Douglas Elliman did not respond to Inman’s request for comment.
Read the full order below:
