In a long-awaited MLS PIN preliminary hearing Tuesday, U.S. District Court Judge Patti Saris, after a lengthy discussion, decided to grant preliminary approval for the proposed settlement, but cited concerns over class expansion. Calling for a revised agreement, Judge Saris tentatively planned for an August or September date for the next hearing.
Though Saris did say—and continued to say for the majority of the hearing—that she did not want to approve the settlement, preliminarily, because she didn’t want to expand the class to commercial and mobile homes, she ultimately agreed to approve it.
“Well at this point, my job is very, very preliminary, which is to find that there’s enough there to find reasonable—and, as I’ve mentioned, I cannot certify a class of the commercial and the mobile homes,” she said. “I am inclined, as a preliminary—and let me underscore preliminary matter—otherwise approve the class. However, I am open at the final stage to information. The thing that raises the biggest red flag is ‘why did NAR agree to it, and the court approve it, and you’re not.’”
A major issue, added Saris, is whether or not the seller’s offer to the buyer’s broker should be allowed on MLS PIN. Both the Biden and Trump Department of Justice (DOJ) agreed that wasn’t a good idea, she said.
Notably, while the NAR settlement banned offers of compensation on the MLS, the deal MLS PIN struck (months before the NAR deal was announced) still allows offers to a buyer agent on its platform, as MLS PIN is independent of NAR.
Representing the DOJ’s antitrust division, Katherine E. Clemons confirmed that the government’s position is that “blanket upfront offers of compensation, anywhere, are bad for competition in brokerage services. But certainly, on the MLS, as it pertains to this case, it’s not good for competition, and it harms both home buyers and sellers.”
Citing the plaintiffs’ recent supplemental response to the DOJ’s supplemental statement of interest, Judge Saris noted that “only 25% of sellers have made offers on the site.”
This data goes back to July 2024, when the rules were changed to make compensation-related fields blank, said Seth Klein, representing the plaintiffs.
“They could offer zero, or they could offer some level of non-zero compensation, and since we did that in July last year, three-quarters of the listings have either a blank or zero offer of compensation,” said Klein. “We think the DOJ position (is) that, for some reason, if you need this option on there, that people would just be compelled to compensation. We just don’t think there’s a basis for that.”
The issue the defendants have with the DOJ’s position, added Matt Goodin, the defendant’s attorney, is the “blanket offer of compensation.” The old system was a blanked, irrevocable offer of compensation that was placed, but now, it is fully negotiable, he said.
“There is nothing blanket or irrevocable about it, and that’s why we would compare the offer of compensation to any other concession that might be included in the listing. If a seller says, ‘I want to sell this house for $500k, and I’m offering $15k to refinish the floors and paint the inside of the house,’ that is no different than listing a house for $500k and offering a 3% compensation to the broker. In response, the counter offer, the actual commission that would be paid to the buyer’s broker is negotiated between the buyer and their broker.”
Goodin’s above argument, countered Saris, “in a way, proved (her) point.”
In response to Goodin’s claim that prohibiting sellers from offering that compensation has “a number of legal problems,” Saris challenged the defendant’s counsel asking why they cared so much.
The sellers should have the choice and freedom to list the deal terms they want to offer, countered Goodin.
All in all, Saris noted that the 25% stat surprised her, but she does not have enough information to preliminarily approve the class to exclude “commercial and mobile-home people,” but she can’t do that without prejudice to the DOJ’s information at the final stage since it could raise anti-competitive concerns.
Even though the 25% number lays out how many listings are making the blanket upfront offers of compensation, Clemons stated that that number doesn’t “tell us anything about whether those listings are making offers of compensation in other areas of the MLS or off the MLS.”
Citing the First Amendment, Saris told Clemons that she did not understand why that was a violation since it is pure speech.
“That is commercial speech,” said Saris. “That’s part of their selling point. I don’t know if I could stop that, and you haven’t asked me to stop it either.”
Pointing out previous rulings, Clemons told Saris that the Supreme Court has stated very clearly that the First Amendment does not stop the courts from prohibiting speech that restrains trade.
“So the First Amendment argument—when the speech is part of a broader scheme to prevent or suppress competition—that is not a concern, and that was something that the Supreme Court has held repeatedly,” Clemons said.
Given that the DOJ is not a party to the case, Clemons noted that the DOJ’s role here is to advise the court with the benefit of their expertise.
Saris asked if there was any way the DOJ could file an amicus brief with an economist because “it can’t just be an attorney argument.”
Once again bringing up the 25% stat, Saris said she was “completely in the government’s (DOJ’s) camp” until she heard that number.
Goodin assured the judge that the offers are indeed fully negotiable.
“Now, if the argument is that buyers won’t negotiate with their brokers—I can’t speak to that, but MLS PIN is not the party to police that, and that is, frankly, not an antitrust issue,” he added. “If what they (the DOJ) want to do is restructure the real estate industry, they have the mechanisms to do that. They should pursue them, but continuing to stand in the way of our settlement and allowing this case to move forward is the real problem here.”
Moreso, the DOJ is refusing to tell the defendants what they find non-objectionable, all while “refusing to get out of the way and let the settlement move forward,” said Goodin.
Before ending the preliminary hearing, Saris clarified that everything she said was not an April Fool’s joke.