In Lutz v. HomeServices of America, Inc. et al., No. 4:24-cv-10040-KMM, the U.S. District Court for the Southern District of Florida dismissed antitrust claims brought by a proposed class of homebuyers seeking to enjoin implementation of rules promulgated by the National Association of Realtors (NAR) relating to commissions paid to real estate brokers representing homebuyers.
The Lutz case is one of a series of class actions brought against the NAR and its real estate brokerage members across the country. Cases brought by home sellers resulted in a $1.78 billion jury verdict in October 2023 against the NAR in Burnett v. National Association of Realtors, No. 4:19-cv-00332-SRB (W.D. Mo.), which was later resolved through a comprehensive settlement agreement. That settlement eliminated many of the NAR’s challenged rules, including one that required such home sellers to unilaterally offer nonnegotiable commissions to all homebuyer-brokers to be paid by the home sellers from the sales price.
Additional plaintiffs have pursued follow-on litigation against different defendants, including a class of home buyer plaintiffs in Davis v. Hanna Holdings, Inc., 2:24-cv-02374-WB, whose horizontal antitrust claims were dismissed without prejudice for reasons discussed in this recent Inside Class Actions blog post.
Unlike in Hanna, the court dismissed the Lutz homebuyers’ federal antitrust claims with prejudice, holding that they lacked “antitrust standing” under standards set by the Supreme Court in Associated General Contractors of California, Inc. v. California State Council of Carpenters, 459 U.S. 519, 545 (1983). The court based its reasoning on the fact that home sellers ultimately paid the allegedly anticompetitive commissions, not home buyers. That made the Lutz homebuyers “indirect purchasers” and thus not “efficient enforcers” of the antitrust laws under Associated General Contractors. The court further determined the homebuyers were not “efficient enforcers” because the home sellers were more directly injured than the home buyers by the NAR commission rules and thus had greater incentives to challenge them.
The Lutz decision shows how courts apply the law of antitrust standing to limit the universe of potential plaintiffs who may pursue a federal antitrust claim under the Sherman Act. The court also dismissed various state law antitrust claims. But, notably, the court allowed the homebuyers to amend their complaint replead those claims, and on August 5, the home buyers filed an amended complaint to continue pursuing their state law claims.