HomeServices Hit by New Buyer Suit Days After Seller Settlement

HomeServices of America, after paying $250 million to settle seller suits and being dropped from the largest buyer suit, for a few short days was maybe the only large real estate company not directly facing commission litigation.

That changed Monday, when lawyers behind the largest buyer suit (known as Batton) re-filed their accusations in a new federal district court, skirting the jurisdictional technicality that HomeServices had used to shrug off the original litigation.

In an email to RISMedia, HomeServices executive vice president Chris Kelly says that while the company is “just beginning to analyze this buyer antitrust case,” it continues to assert that “HomeServices’ conduct and business practices were at all times lawful and procompetitive.”

“We also note that Plaintiffs’ theory of damages in this follow-on lawsuit is directly at odds with the damages theory accepted by the jury in the Burnett case and could potentially result in a duplicative recovery that would be unfair, unjust, and violative of HomeServices’ rights,” Kelly adds.

While Batton had been filed in Illinois—where lawyers for HomeServices successfully argued the company had no real presence—the new suit was filed in Florida, which plaintiffs argue is the correct venue, naming a handful of HomeServices affiliates or franchises including EWM Realty, Florida Realty, Florida Network Realty, Beach Properties of Florida and Roberts Brothers.

HomeServices is the only named defendant in the suit, even as it also names the other Batton defendants (Anywhere, RE/MAX, Keller Williams, Compass, eXp, Redfin, Weichert, United Real Estate, Howard Hanna and Douglas Elliman) as “coconspirators.”

Most class-action commission litigation filed so far has been filed by recent homesellers, a handful of suits have originated with homebuyers, who have made broadly similar allegations—that big brokerages conspired with the National Association of REALTORS® (NAR) on rules that inflated commissions. 

No settlements agreed to so far have resulted in protection from the buyer lawsuits, meaning everyone—even NAR—can still be sued by buyers for the same conduct that allegedly harmed sellers. At the same time, no judge has yet certified a class of buyers that suffered damages, meaning these lawsuits have significant hurdles to overcome before reaching a trial.

As Kelly noted, plaintiffs in the buyer suits, including this one (known as Lutz lead plaintiff James Lutz, who bought a home using a BHHS agent in 2021) are relying on a different theory to seek damages, and are also basing their lawsuit off of state laws rather than federal statutes. The judge in Batton, Andrea Wood, threw out an earlier version of that  suit, ruling that buyers are “indirect purchasers” of real estate services and therefore could not not sue under federal law.

But Wood later affirmed that plaintiffs had made a convincing argument for why buyers as well as sellers were harmed by the NAR rules and policies in question, and that relying on a variety of state laws as a foundation made sense—at least at a relatively early stage in the litigation.

Notably, the Lutz suit is also seeking injunctive relief—meaning court-ordered changes in policies and practices—despite the fact that Wood ruled in Batton that buyers could not seek to change real estate rules, as direct purchasers like homesellers are better suited to sue for those forced changes.

Like Batton, Lutz is attempting to certify a class of buyers going back to 1996 and spread across over 30 states.

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