Parent company of Howard Hanna Real Estate Services argues plaintiff agreed to a mediation clause and, as a buyer, doesn’t have standing to sue under federal and state antitrust laws.
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Hanna Holdings is fighting back against an antitrust lawsuit alleging it conspired with other members of the National Association of Realtors to inflate buyer agent commissions, leading to inflated home prices paid by buyers.
On Aug. 5, the parent company of the brokerage Howard Hanna Real Estate Services filed a motion to dismiss the suit, which is one of several commission suits brought by homebuyers. While nationwide settlements have been announced in major commission cases brought by homesellers, such as Sitzer | Burnett and Moehrl, none cover buyer claims.
The filing asked the U.S. District Court for the Eastern District of Pennsylvania to either toss the case “with prejudice” (meaning permanently) or to transfer it to the Western District of Pennsylvania, where Howard Hanna is based.
“This is a case that should not have been brought, and if it had to be brought, it should not have been brought here,” the filing reads.
“The Complaint is nearly identical to amended complaints filed in another court by the same counsel, also on behalf of home buyers, bringing the same claims challenging National Association of Realtors (NAR) guidelines.”
Homebuyer Scott Davis filed the suit, which seeks class-action status, on May 31. Davis’s counsel, Korein Tillery and Lowey Dannenberg, also represent plaintiffs in three other buyer commission suits known as, Batton 1, Batton 2 and Lutz, after their lead plaintiffs. In March, the Batton 2 plaintiffs dismissed Howard Hanna from their suit without prejudice, meaning the claims could be filed at a later time.
Davis, a North Carolina resident, bought a home in Greensboro in 2022 using a buyer broker from Hanna Holdings subsidiary Allen Tate Real Estate. Hanna’s motion to dismiss argues that Davis’s agreement with Allen Tate included a mediation clause that states “[i]f a dispute arises out of or [is] related to this Agreement or the breach thereof . . .the parties agree first to try in good faith to settle the dispute by mediation before resorting to arbitration, litigation, or some other dispute resolution procedure.”
“Plaintiff failed to honor his contractual requirement to mediate before filing this lawsuit” and therefore the suit should be dismissed, the motion says.
The complaint alleges Hanna Holdings violated federal and state antitrust laws by participating “in the establishment, maintenance, and implementation” of several NAR rules alleged to be anti-competitive, including the trade group’s cooperative compensation rule, also known as the Participation Rule, which requires listing brokers to make an offer of compensation to buyer brokers in order to submit a listing to a Realtor-affiliated multiple listing service.
Hanna’s motion to dismiss contends that Davis doesn’t have the right to sue under those laws.
“Plaintiff lacks standing to bring nearly all of his state law claims because plaintiffs may only sue under the laws of states in which they reside or were injured,” the motion reads.
“Plaintiff sues under the laws of 35 states but resides and purchased his home in just one: North Carolina. All other state law claims must therefore be dismissed.
“Plaintiff also lacks antitrust standing to sue under the Sherman Act and many state laws — including North Carolina law — because, as the Batton court recognized, home buyers are not direct purchasers of the allegedly overpriced buyer-broker services.
“Accordingly, not only are home buyers barred from seeking damages under the Sherman Act and many state laws …, they also cannot obtain an injunction under the Sherman Act or damages under North Carolina’s antitrust statute (or its consumer protection statute) because home seller plaintiffs are more efficient enforcers of the antitrust laws …”
Attorneys for Hanna also argued that Davis “has not plausibly alleged either an agreement among Defendant and the purported coconspirators or a relevant antitrust market.” Davis’s complaint does not name any other defendants but does list several parties as co-conspirators of Hanna, including Anywhere (formerly Realogy), RE/MAX, Keller Williams, HomeServices of America, Compass, eXp World Holdings, Redfin, Weichert Realtors, United Real Estate Group, Douglas Elliman, NAR, local Realtor associations, Realtor-affiliated MLSs, and franchisees and brokers of Hanna Holdings.
A pretrial conference in the case is set for Aug. 20. A trial has not yet been scheduled.
Inman has reached out to the plaintiff’s attorney, Carol O’Keefe of Korein Tillery, for comment and will update this story if and when a response is received.
Read the motion to dismiss:
Email Andrea V. Brambila.
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