NAR seeks a “complete reversal” in US commissions case

The National Association of Realtors (NAR) will seek a “complete reversal” of the guilty verdict in the Sitzer Burnett commission lawsuit, suggesting the controversial case is far from over.

According to Inman, NAR’s legal team is getting ready to file post-trial motions after a Kansas City jury found NAR, Keller Williams, Anywhere (formerly, Realogy), RE/MAX, HomeServices of America and two of its subsidiaries BHH Affiliates and HSF Affiliates, conspired to inflate broker commission rates paid by home sellers.

The plaintiffs were awarded nearly US$1.8 billion in damages, which will be tripled by law to nearly US$5.4 billion.

Speaking at the NAR NXT conference in Anaheim, NAR’s Chief Legal Officer, Lesley Muchow said they will seek a complete reversal.

“NAR will appeal this decision,” Ms Muchow said.

“We do believe that we have a very strong basis for a complete reversal of the jury’s verdict, as well as the damages awarded.

“We anticipate over the next coming months that we will file post-trial motions.” 

She said NAR will ask the court to undo the jury verdict, arguing that no reasonable jury could have come to the conclusion that it reached based on the evidence and testimony that occurred.

“We will also argue and ask for a new trial,” she said.

“If we are unsuccessful on those motions, then we will be able to advance our appeal to the Eighth Circuit.”

According to Ms Muchow, the questions the jury had to answer and their verdict is a reflection of a decision by the judge, Stephen R. Bough, that the claims in the case would be evaluated under a “per se” rule analysis rather than a “rule of reason” analysis.

That decision is “a critical issue in understanding the jury’s verdict,” Ms Muchow said.

While “rule of reason” allows a jury to consider a practice’s actual effect on the market or the intentions of the people who engaged in the practice, a “per se” violation is illegal regardless of those considerations.

She said the judge’s decision is in opposition to the fact that most modern antitrust cases are evaluated using the rule of reason analysis.

“If the jury had been able to use that rule of reason analysis, the jury would have been able to take into consideration all the pro-competitive benefits for the rule and the practice and all the evidence and testimony that the jury heard, quite frankly, over the course of 11 days, about why that cooperative compensation rule exists and benefits consumers, sellers, and buyers,” she said.

On the back of NAR’s decision to fight the decision, lead counsel for the Sitzer Burnett plaintiffs, Michael Ketchmark, of Ketchmark & McCreight, said NAR hasn’t “learned anything”.

“We keep hearing the same arguments being retreaded and rehashed,” Mr Ketchmark said.

“All they’re going to do is waste time and money pursing an outdated and broken and illegal system. 

“They’re trying to act like they didn’t really lose. 

“They had a resounding defeat.”

He said every day NAR keeps fighting change is another day of damages and pain the association will have to account for.

“I’m getting hundreds of phone calls every day from agents about the horrors of the current system,” he said.

“It’s time that we turned control of the future of real estate to the local agents.”

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Rowan Crosby

Rowan Crosby is a senior journalist at Elite Agent specialising in finance and real estate.