BAM Key Details:

  • A new lawsuit was filed in Chicago federal court on November 2nd on behalf of home buyers alleging the defendants—real estate companies including Compass, eXp, Redfin, and Douglas Elliman, among others—have caused homebuyers “to pay inflated prices for the homes they purchase, and to receive reduced quality broker services.”
  • The defendants listed are the same as those listed in the Gibson lawsuit filed the same week by Michael Ketchmark, lead attorney for the Sitzer/Burnet plaintiffs. 

After the Sitzer/Burnett verdict was announced, plaintiffs’ lead counsel, Michael Ketchmark, eagerly announced his intention of filing another class action suit with a list of new corporate defendants. 

So, the news of yet another class action lawsuit against real estate companies doesn’t come as a shock. 

That said, the new Batton lawsuit filed in Illinois does offer a new twist. Because the plaintiffs in this lawsuit—and the classes they represent—are home buyers rather than sellers.

Here’s what we know so far. 

Who are the plaintiffs—and why are they suing? 

According to the court filing (labeled as “Class Action Complaint: Jury Trial Demanded”), the plaintiffs in the Batton case include the following—“individually and on behalf of all others similarly situated”: 

  • Mya Batton
  • Aaron Bolton
  • Michael Brace 
  • Do Yeon Irene Kim 
  • Anna James
  • James Mullis 
  • Theodore Bisbicos

As to their complaint against Compass,.et al: 

Defendants’ unlawful, anticompetitive conduct causes America’s home buyers to pay inflated commissions for broker services they misrepresent as free, to pay inflated prices for the homes they purchase, and to receive reduced quality broker services…Plaintiffs and the other Class members have each incurred at least thousands of dollars in overcharges as a result of Defendants’ conspiracy.

The plaintiffs currently have a lawsuit pending in the same district against the National Association of Realtors (NAR), Anywhere (fka Realogy), Keller Williams, RE/MAX, HomeServices of America, and three HomeServices subsidiaries, alleging that the rules imposed by the National Association of Realtors (NAR)—including the cooperative compensation rule—have resulted in buyers paying higher home prices. 

That lawsuit (Batton 1) was originally filed in January 2021 by Judah Leeder and amended in July 2022 with Batton as the lead plaintiff. Motions to dismiss Batton 1 are currently pending. 

Plaintiffs in both Batton lawsuits are represented by Korein Tillery and Lowey Dannenberg. 

Who are the defendants? 

According to the court filing (labeled as “Class Action Complaint: Jury Trial Demanded”), the defendants are— 

  • Compass, Inc. 
  • eXp World Holdings, Inc. 
  • Redfin Corporation 
  • Weichert Realtors
  • United Real Estate Group
  • Howard Hanna Real Estate Services
  • Douglas Elliman, Inc.

With one exception, the defendants for Batton 2 are the same as those listed in a case filed last week—Gibson—by the same attorneys who filed the Sitzer/Burnett lawsuit. 

That one exception is the National Association of Realtors (NAR), which is listed among the defendants for the Gibson case. 

Michael Ketchmark of Ketchmark & McCreight, lead counsel for the plaintiffs in Sitzer/Burnett, told Inman none of the legal teams representing the Batton plaintiffs had contacted him about the suit, so he knew nothing about it. 

Biggest Industry Lawsuit to Date

Judging from the details in the complaint, the scope of Batton 2 is “exponentially larger” than Sitzer/Burnett, Moehrl, or the newer Gibson lawsuit. 

Both Batton lawsuits—Batton 1 (formerly Leeder) and Batton 2—seek class certification on behalf of two proposed classes: 

  • A “Nationwide Class” representing “All persons who, since December 1, 1996 through the present, purchased in the United States residential real estate that was listed on an NAR MLS.” For this class, the plaintiffs are seeking injunctive relief—meaning either a court-ordered prohibition or a requirement altering the defendants’ behavior, 
  • A “Damages Class” representing “All persons who, since December 1, 1996 through the present, purchased in the Indirect Purchaser States residential real estate that was listed on an NAR MLS.” For this class, plaintiffs are seeking damages under “antitrust, unfair competition, consumer protection, and unjust enrichment laws.”

The “Indirect Purchaser States” referenced are Arizona, Arkansas, California, Connecticut, Florida, Hawaii, Idaho, Illinois, Iowa, Kansas, Maine, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Nebraska, Nevada, New Hampshire, New Mexico, New York, North Carolina, North Dakota, Oregon, Rhode Island, South Carolina, South Dakota, Tennessee, Utah, Vermont, Virginia, West Virginia, Wisconsin, Puerto Rico, and Washington D.C.

All told, the Batton 2 complaint seeks class certification, a jury trial, an award of damages, and a permanent injunction preventing the named defendants “from establishing the same or similar rules, policies, or practices as those challenged in this action in the future.”

Like the other cases (Batton 1, Sitzer/Burnett, and Moehrl), Batton 2 takes aim at NAR’s cooperative compensation rule—aka the Participation Rule—which requires listing brokers to include an offer for buyer agent compensation in the listing agreement in order to submit it to a Realtor-affiliated MLS. 

What’s the latest on Michael Ketchmark’s new case?

In the second commission lawsuit filed last week, the same attorneys who won the Sitzer/Burnett lawsuit filed new national claims on the same day the jury reached a verdict, naming Douglas Elliman, Redfin, Compass, eXp World Holdings, and other companies as defendants—including the National Association of Realtors (NAR)

All five commissions lawsuits—Sitzer/Burnett, Moehrl, Gibson, Batton 1, and Batton 2—challenge the longstanding industry practice of having the seller pay the full commission, which is sometimes 6% or more, for not only their own agent but that of the buyer. 

The legal team for the plaintiffs in Sitzer/Burnett succeeded in convincing the jury that this practice amounts to a conspiracy among the defendants that violates U.S. antitrust laws. 

Our goal is to take the message from the state of Missouri and take it nationwide so that homeowners in our country can finally reap the benefits of technology and get these corporate real estate giants’ hands out of the homeowners’ equity.

Michael Ketchmark

Lead attorney for the Sitzer/Burnett plaintiffs

What’s the latest on NAR’s appeal

As of now, all we know for certain is that NAR and other defendants in the Sitzer/Burnett trial have vowed to appeal last Tuesday’s verdict. They’ve steadfastly denied any wrongdoing and seem fairly optimistic that the verdict will be overturned. 

Any appeal for Sitzer/Burnett would land in the 8th U.S. Circuit Court of Appeals, based in St. Louis, which oversees federal cases in Missouri and several other U.S. states.

Stay tuned for more as the case develops.