By Mike Scarcella
WASHINGTON, Feb 3 (Reuters) - U.S. real estate brokerage Keller Williams has agreed to pay $20 million to resolve a nationwide homebuyer class action accusing the company of conspiring to fix commissions and inflate home prices, marking the first settlement in the case.
The preliminary settlement with Keller Williams was disclosed on Monday in the federal court in Chicago, and requires a judge’s approval.
Texas-based Keller Williams, which markets itself as the largest real estate franchise by agent count, said it would cooperate with the buyers as they pursue related claims against brokerages Anywhere Real Estate, RE/MAX, and industry trade group National Association of Realtors.
The homebuyer plaintiffs contend that sellers are inflating home prices to offset the cost of commissions they must pay to the buyers' agents under industry rules and practices implemented by the defendants. U.S. home sellers often pay commissions of upwards of 5% to 6% of the cost of a house. Part of that commission is paid to the broker for the buyer.
Keller Williams chief executive officer and president Chris Czarnecki in a statement on Monday said “we are the first defendant to resolve this litigation with the goal of eliminating uncertainty for our franchisees and agents.” He said the accord will allow Keller Williams to focus on its mission.
Lead attorneys for the homebuyers did not immediately respond to a request for comment. Keller Williams denied any wrongdoing in agreeing to settle.
The National Association of Realtors in a statement said the settlement does not directly affect its position in the litigation, and that it will "pursue all potential resolutions, both non-litigation and litigation, to reach a result that is in the best interest of our members, the industry and consumers.”
RE/MAX and Anywhere did not immediately respond to requests for comment. They too have denied participating in the alleged price-fixing conspiracy according to their court filings.
Lawyers for the homebuyers said in their request for approval that settling would provide a “substantial benefit” to class members, especially given the risk of continued litigation.
Keller Williams will cooperate with the plaintiffs through deposition testimony, trial testimony and documents, the filing said. The plaintiffs’ lawyers said they will seek up to about 33% of the settlement, or $6.7 million, for legal fees.
The National Association of Realtors and some major brokerages have been hit with separate antitrust lawsuits by home sellers claiming damages in connection with commission fees. Many of those cases have resulted in settlements totaling hundreds of millions of dollars.
The case is Mya Batton et al v. National Association of Realtors et al, U.S. District Court for the Northern District of Illinois, No. 1:21-cv-00430.
For plaintiffs: Vincent Briganti of Lowey Dannenberg, and George Zelcs of Korein Tillery
For Keller Williams: Boris Bershteyn of Skadden Arps, and David Kully of Holland & Knight
Read more:
CoStar asks US Supreme Court to hear real estate antitrust case
US Supreme Court declines to revive antitrust lawsuit against Zillow
National realtors group defeats Utah brokerage’s antitrust lawsuit
Realtor association hit with new antitrust lawsuit over ‘pocket listings’
(Reporting by Mike Scarcella)
((Email: mike.scarcella@thomsonreuters.com; Phone: 202-985-8228.))
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