Some Quick Thoughts on the Dismissal of Leeder v. NAR

I saw the news that the court dismissed the complaint in Leeder v. NAR, the antitrust lawsuit filed against the same defendants on the same legal theories as Moehrl and Sitzer, but from the buyer’s perspective. I didn’t comment on it as I was waiting to read the opinion, and because I didn’t think it was really that big a deal.

But multiple readers have emailed, texted, and even called to ask my opinion on this. So here it is, very briefly.

I did read through the Memorandum Opinion, available on Inman.

Without getting into the legal weeds, basically the court said that Leeder as the buyer is an indirect purchaser, and there’s precedent that doesn’t allow an indirect purchaser to sue in antitrust. The seller is the direct purchaser, and the seller’s is already suing NAR and those other defendants in Moehrl, so… GTFO is basically the holding.

There is one interesting things to consider here.

Even while dismissing the case, the court does say that the buyer plaintiffs here would be vindicated thanks to Moehrl:

Moreover, home sellers are, in fact, vindicating the public interest in antitrust enforcement as they are actively challenging the same NAR rules as Leeder before this Court in Moehrl v. The National Association of Realtors, No. 19-cv-01610 (N.D. Ill.). Not only are the plaintiffs in Moehrl asserting a claim for damages (which has not been subject to an Illinois Brick challenge), they are also requesting the exact injunction that Leeder requests here. Thus, denying Leeder antitrust standing to seek injunctive relief will not “leave a significant antitrust violation undetected or unremedied.” [Line breaks and emphasis added]

To briefly explain, the whole point of private anti-trust litigation is to incentivize private litigants to do what the government would have to do otherwise. This is the idea of the “private attorney general”. Companies do bad things, and normally, you’d want the government (some state’s attorney general, or the Dept. of Justice) to bring a lawsuit to correct said bad thing. But even governments have limited resources, only so many lawyers, etc. so you want private lawyers using their own money to bring lawsuits to correct a problem.

Since the sellers are suing NAR and others, the court here is saying to the buyers, “Your problems will be taken care of, if/when the sellers win their case.” Justice will be done… but you and your lawyers can’t make money from it.

Part of this is, of course, the legal principle of indirect purchasers can’t sue. Part of it is likely the plain logistics of Judge Wood not wanting to listen to the same dang arguments against the same dang defendants; that’s a waste of time.

But maybe I’m feeling particularly paranoid here, doesn’t it feel like Judge Wood is implying that the plaintiffs in Moehrl would prevail? Because if the sellers lose in Moehrl, then the buyers in Leeder won’t be vindicated. If there was an antitrust violation, it would go unremedied.

I feel like Judge Wood here is telling the buyers to go away, because she knows the sellers will win.

Still, this is a victory for NAR and the other defendants. It’s one fewer lawsuit they have to fight, a few million they don’t have to spend on legal fees.

One thing to watch for is to see if the DOJ intervenes after this dismissal. They did just that in Rex v. Zillow and the court did a 180 afterwards. I kinda doubt it, since Moehrl is still going on, but if the DOJ did intervene… that would be significant in and of itself.

-rsh

 

 

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Rob Hahn

Rob Hahn

Managing Partner of 7DS Associates, and the grand poobah of this here blog. Once called "a revolutionary in a really nice suit", people often wonder what I do for a living because I have the temerity to not talk about my clients and my work for clients. Suffice to say that I do strategy work for some of the largest organizations and companies in real estate, as well as some of the smallest startups and agent teams, but usually only on projects that interest me with big implications for reforming this wonderful, crazy, lovable yet frustrating real estate industry of ours.

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