NAR Litigation Update

Following the Moehrl v. NAR litigation filed in March that challenges the MLS system and the way that broker commissions are paid, two additional lawsuits with similar allegations have been filed against NAR and the same four franchisor firms that were sued in Moehrl.

NAR has provided the following update in regards to this news:

“The two new suits are quite similar to the Moehrl litigation. Plaintiffs in all three cases allege home sellers unfairly pay the commissions of buyers’ brokers. They ignore how commissions are subject to negotiation. And they question the value buyers’ brokers deliver in the home buying and selling process.

Often referred to as copycat lawsuits because the allegations are substantially similar to lawsuits already filed, such litigation is commonly brought by additional law firms whose ultimate goal is to combine their suits with others, in hopes they receive a portion of attorney’s fees.

NAR remains confident these lawsuits are without merit. They are wrong on the facts, wrong on the law, and wrong on the economics. As each of you know, the MLS system is designed first and foremost with the buyer and seller in mind. It is pro-competitive and pro-consumer. And buyers’ brokers play a very real and critical role in the home buying and selling process. In the best interests of consumers, NAR will aggressively defend all three lawsuits – and any others that may be filed in the future.

As mentioned in March, NAR plans to file a motion to dismiss the Moehrl v. NAR case on May 17. In that motion, NAR will point out the commission offered to the buyer’s broker is determined by the seller and listing broker and is very much subject to negotiation. NAR will also note that courts have repeatedly held the MLS system promotes competition, increases the efficiency of the market and serves the best interests of sellers and buyers alike. In due course, NAR will file similar motions to dismiss in the other two cases.

Please note courts are often reluctant to grant motions to dismiss. If NAR’s motion to dismiss is denied, they expect a years-long litigation process. However, NAR will continue to aggressively defend the right of American home buyers and sellers to continue to have access to a highly efficient home buying market supported by brokers who help navigate a complex transaction.”

Update, May 30, 2019:

In response to NAR’s motion to dismiss the Moehrl v. NAR lawsuit, the plaintiff’s attorneys this week let the court know they are amending their complaint. Although the case is ongoing, this a sign the class action attorneys recognize the legal viability of our position and are regrouping to try to salvage their baseless case.

This means the court will no longer rule on NAR’s motion to dismiss the case and instead wait for the amended complaint.  NAR will continue to fight these meritless claims and continue to make it clear the MLS system is pro-competitive and pro-consumer and functions to the benefit of both buyers and sellers. In order to best represent the interests of consumers and our members, NAR will continue to aggressively defend against this lawsuit.

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