On May 31, 2024, Scott Davis filed a class action complaint against Hanna Holdings, Inc. in the United States District Court for the Eastern District of Pennsylvania. The lawsuit accuses Hanna Holdings and other real estate brokers of conspiring to impose anticompetitive restraints that inflate commissions for buyer-agent services, leading to higher home prices.
Scott Davis, individually and on behalf of all others similarly situated, initiated the complaint asserting that Hanna Holdings and its co-conspirators have violated federal antitrust laws, state antitrust statutes, consumer protection laws, and common law. According to the filing, these violations stem from practices endorsed by the National Association of Realtors (NAR), which allegedly enable brokers to maintain artificially high commission rates. Davis contends that these supracompetitive commissions are hidden within home prices paid by buyers.
The complaint outlines several key points regarding how NAR's rules facilitate this alleged conspiracy. For instance, it highlights the "Buyer-Agent Commission Rule," which mandates that seller-brokers make blanket offers of compensation to buyer-agents. This rule purportedly discourages price competition among brokers and results in inflated commissions unrelated to the quality or quantity of services provided. Additionally, NAR’s "Commission Concealment Rule" prevents disclosure of total broker commissions to buyers, further obscuring the true cost of these services.
The lawsuit also addresses how these practices harm consumers. By steering buyers towards higher-commission homes and away from properties offering lower commissions, brokers can manipulate market dynamics to their advantage. This steering not only inflates home prices but also degrades the quality of buyer-agent services since agents are incentivized more by potential earnings than by matching clients with suitable homes.
Davis’s legal team argues that Hanna Holdings has played an active role in perpetuating these anticompetitive practices through its control over local Multiple Listing Services (MLSs) and participation in NAR’s governance structures. The company is accused of enforcing compliance with NAR's rules among its franchisees and agents as a condition for accessing MLS data crucial for marketing properties.
The plaintiff seeks various forms of relief from the court including treble damages for overcharges incurred due to inflated commissions, injunctive relief to prevent further enforcement of these anticompetitive rules, and reimbursement for legal costs including reasonable attorneys' fees.
Representing Scott Davis is a team of attorneys specializing in antitrust litigation. The case has been assigned Case No.: 24-cv-2374 and will be presided over by Judge Wendy Beetlestone.