There are pro-competitive benefits in commission sharing

by | Jul 6, 2022 | Saul's Insights, Uncategorized | 0 comments

Defendants in the Moehrl case filed a Motion in Opposition to Plaintiff’s Motion for Class Certification. The Motion did not result in an appeal in the Defendant’s favor. However, this 88 page document outlines many of the arguments that Defendants will likely make to a jury when the case goes to trial in early 2023.

MemoInOppositionToMotionForClassCertificationWithoutExhibits_06142022

Most of these pro-competitive arguments were not allowed by the motion judges in both the Sitzer/Burnett and Moehrl cases,.although Plaintiffs were allowed to demonstrate that their antitrust claim plausible enough to permit the case to go to trial.

So, Defendants will have the opportunity to argue their case – some of the points to consider are:

  • These offers of cooperative compensation by listing brokers directly benefit their seller
    clients
  • The offers of cooperative compensation are inherently valuable to sellers, as they increase
    interest in their homes, and that increased interest generally should lead to more, earlier, and
    higher purchase offers than they otherwise would have received
  • When a seller pays the buyer broker, buyers who
    otherwise would have had to put their limited cash towards paying for a buyer broker are able to
    use that money for a down payment, which allows more buyers the opportunity to compete to
    buy the seller’s property. To the extent the buyer is paying the commission in the form of an
    increased purchase price, the commission can be rolled into the buyer’s mortgage. Increased
    interest in the seller’s listing should lead to more and higher offers and shorter time on market.
  • These benefits exist independently of the NAR rules challenged in this case. The
    incentives that Plaintiffs claim lead to steering will exist as long as any seller in a relevant
    market is offering cooperative compensation, and cash-constrained buyers will continue to prefer
    listings that include buyer broker compensation
  • Plaintiffs have failed to demonstrate that they can prove, using common evidence, that
    any class member who sold to a buyer using a buyer broker would have refused to help the buyer
    compensate that broker. The question whether any particular class member might have agreed to
    offer cooperative compensation in the but-for world is an inherently individualized one and
    cannot be resolved in a class action.

 

 

 

0 Comments

Submit a Comment

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.