Lutz homebuyer commission lawsuit dismissed

Originally filed in April 2024, the suit alleges that real estate industry entities colluded to create rules such as the National Association of Realtors’ (NAR) now defunct Participation Rule, forcing homebuyers to pay artificially inflated real estate agent commissions.

The suit initially named HomeServices of America as the sole defendant after it was dismissed from the Batton 1 homebuyer commission lawsuit. Douglas Elliman was added as a defendant in June 2024 through an amended complaint. 

The ruling notes that as homebuyers, the plaintiffs were indirect purchasers of the allegedly inflated real estate agent commissions, since these were paid by the home sellers or deducted from the home sale proceeds and not directly by the plaintiffs.

“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,” the ruling states.

Additionally, Moore ruled that the plaintiffs are “not efficient enforcers of the antitrust laws,” and highlights that the claims made in this suit are almost identical to those made by home sellers in similar suits.

“Here, the Court finds that home sellers, as the directly affected individuals, are better suited to seek antitrust relief,” the ruling states. “Thus, as courts faced with the same question have found that the ‘existence of more direct victims’ or more specifically home sellers, cause Plaintiffs to lack antitrust standing under the Sherman Act.”

Moore added that the plaintiffs’ request for injunctive relief is “rendered moot” by the NAR home seller commission lawsuit settlement. Due to this, the court dismissed the plaintiffs’ claim for injunctive relief with prejudice, meaning that the case cannot be refiled.

The plaintiffs’ three other claims — which allege violations of state antitrust statutes, state consumer statutes and unjust enrichment — were dismissed without prejudice and can be refiled. The court is giving the plaintiffs 21 days from Tuesday to file a third amended complaint if they wish to pursue further litigation. 

Chris Kelly, the CEO of HomeServices of America, wrote in an email to HousingWire that he was pleased with the court’s decision to grant his firm’s motion to dismiss.

“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,” he wrote. “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. 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.”

Douglas Elliman declined to comment.