Tar Lawsuit 2023

Case 4:23-cv-01013 Document 1 Filed 11/13/23 Page 1 of 35 PageID #: 1
IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF TEXAS
SHERMAN DIVISION
QJ TEAM, LLC, AND FIVE POINTS §

§
HOLDINGS, LLC, individually and on
§
behalf of all other persons similarly
situated, §
§
Plaintiffs, §
§
V. §
§ Case No.
TEXAS ASSOCIATION OF §
REALTORS, INC., AUSTIN BOARD §
OF REALTORS, SAN ANTONIO §
BOARD OF REALTORS, INC., §
METROTEX ASSOCIATION OF §
REALTORS, INC., HOUSTON §
ASSOCIATION OF REALTORS, ABA §
MANAGEMENT, L.L.C., PENFED §
REALTY, LLC, EBBY HALLIDAY §
REAL ESTATE, LLC, THE DAVE §
PERRY-MILLER COMPANY, KELLER §
WILLIAMS REALTY, INC., HEYL §
GROUP HOLDINGS LLC, THE §
LOKEN GROUP, INC., HEXAGON §
GROUP, LLC, DMTX, LLC, KELLER §
WILLIS SAN ANTONIO, INC., SAN §
ANTONIO LEGACY GROUP, LLC, §
FATHOM REALTY, LLC, GRACE §
REALTY GROUP LLC, SIDE, INC., §
CITIQUEST PROPERTIES, INC., §
HOMESERVICES OF AMERICA, §
INC., JP PICCININI REAL ESTATE §
SERVICES, LLC, TEAM BURNS, LLC, §
ABRE CAPITAL LLC, REALTY §
AUSTIN, LLC, ATX WIR LLC, THE §
MICHAEL GROUP, LLC, SQUARE §
MB, LLC, MARK ANTHONY DIMAS, §
GREENWOOD KING PROPERTIES §
II, INC., TURNER MANGUM LLC §
§
Defendants. §
Plaintiffs’ Original Class Action Complaint Page 1

PLAINTIFFS’ ORIGINAL CLASS ACTION COMPLAINT
Comes Now QJ Team, LLC, and Five Points Holdings, LLC, Plaintiffs herein, and
bring this action on behalf of themselves and on behalf of the Class consisting of all
persons who listed properties on a Multiple Listing Service in Texas (“the MLS”) using a
listing agent or broker affiliated with one of the Defendants named herein and paid a
buyer broker commission from November 13, 2019, until the present (“the Class Period”).
In support thereof, Plaintiffs respectfully allege as follows:
I. INTRODUCTION TO THE CONSPIRATORIAL SCHEME
1. In the realm of Texas real estate lies a concealed conspiracy that has
adversely impacted countless home buyers and sellers. Plaintiffs, who have listed their
homes on Multiple Listing Services (MLS) in Texas, stand as the voice of those who have
borne the brunt of the Defendants' unlawful collaboration and anticompetitive practices.
This conspiracy centers around the enforcement of an anticompetitive restraint that
compels home sellers to provide an inflated fee to the broker representing the buyer of
their properties, thus violating federal antitrust regulations. Notably, the United States
Department of Justice's Antitrust Division is currently conducting a thorough
investigation into the residential real estate brokerage sector, with a specific focus on
broker compensation and related practices.
2. The creator of the conspiracy is the National Association of Realtors
(“NAR”), a trade association for real estate brokers with over 1.5 million individual
members. Nar conspired with NAR’s largest affiliated associations in Texas and some of

the largest real estate brokerages that worked in Texas during the Class Period.
A. NAR’s Regulatory Dominion
3. At the core of this alleged conspiracy lies NAR, an organization with
considerable influence in shaping the real estate landscape.
4. NAR wields its regulatory authority to impose a rule known as the
"Mandatory Offer of Compensation Rule." This rule dictates that every property seller,
when listing their home on an MLS affiliated with a local NAR association, must make a
sweeping, non-negotiable offer of compensation to buyer brokers. The Defendants, acting
in concert with NAR, pressurize or incentivize their franchisees, brokers, and agents to
become NAR members and adhere to its regulatory regime. Through this concerted
effort, they ensure the implementation and enforcement of the Mandatory Offer of
Compensation Rule.
B. MLS Control and Competition Suppression
5. MLSs acting as reservoirs of property listings available for sale in defined
geographic regions, play a pivotal role in the real estate ecosystem. Most homes in the
United States are traded through MLS platforms, where brokers are often obligated to
include all properties. These MLSs are primarily governed by local NAR associations,
and access is granted contingent upon broker compliance with NAR's mandatory
regulations outlined in the Handbook on Multiple Listing Policy. This handbook
explicitly incorporates the Mandatory Offer of Compensation Rule.
6. The Defendants and NAR, along with their alleged collaborators, wield
significant control over local real estate markets due to their influence in MLSs.

C. Stifling Competitive Markets
7. In many MLSs, NAR compels broker compliance with rules that curtail
competition. Furthermore, each Defendant mandates or encourages their franchisees,
brokerages, and individual realtors to join NAR and implement its anticompetitive
regulations, including the Mandatory Offer of Compensation Rule, as a prerequisite for
enjoying the benefits of Defendants' branding, brokerage support, and other resources.
8. As prominent brokers in Texas, their involvement in the alleged conspiracy,
manifested through the implementation and enforcement of its rules and policies, is
indispensable to the conspiracy's prosperity.
9. These anticompetitive measures favor the Defendants by enabling brokers
to impose charges on home sellers beyond competitive thresholds and thwarting
competition from innovative or lower-cost alternatives.
D. Home Seller Burden
10. The alleged conspiracy compels home sellers to bear a cost that, in a
competitive market and in the absence of the Defendants' anticompetitive restraint,
would typically be borne by the homebuyer.
11. Further, this has led to an industry-recognized practice called “steering,”
where homeowners are pressured into accepting inflated or stabilized rates out of fear
that buyer brokers will not show their home to prospective buyers.
E. Competitive Imbalance
12. In the absence of NAR's Mandatory Offer of Compensation Rule, the
expense of buyer broker commissions would be incurred by the clients (homebuyers).

This would lead to competition among buyer brokers to offer lower commission rates.
13. Consequently, the Mandatory Offer of Compensation Rule stifles price
competition among buyer brokers because the actual party retaining the buyer broker—
the homebuyer—doesn't negotiate or pay the commission for their broker.
F. Anticompetitive Effects
14. Adding to the anticompetitive implications of the Mandatory Offer of
Compensation Rule, NAR’s rules also forbid buyer brokers from making home purchase
offers that hinge on reducing the buyer broker’s commission.
15. The conspiracy has led to various illogical, harmful, and anticompetitive
effects, including: (a) requiring sellers to pay overcharges for services provided by buyer
brokers to the buyer; (b) maintaining, fixing, and stabilizing buyer broker compensation
at levels that would not exist in a competitive market; and (c) promoting steering and
actions that hinder innovation and entry by new, lower-cost real estate brokerage service
providers.
16. In competitive overseas markets, when homebuyers opt to use a broker,
they personally cover the cost, which is less than half of what American buyer brokers
receive.
17. As a result, Defendants' conspiracy has inflated and stabilized buyer broker
commissions, resulting in higher total commissions paid by home sellers like Plaintiffs
and Class members. Plaintiffs and Class members have each incurred, on average,
thousands of dollars in overcharges and damages due to Defendants' alleged conspiracy.

G. Defendants' Alleged Roles
18. Defendants leverage their control over MLSs, their agreements with local
franchisees and agents, their employee policies, and their active roles within NAR and
local realtor associations to compel local residential real estate brokers to comply with
NAR's regulations, including the Mandatory Offer of Compensation Rule.
19. Defendants also play a part in implementing the conspiracy by reviewing
NAR's Rules and consenting to them at annual meetings, and NAR perpetuates the
conspiracy by periodically reissuing its Rules, which include the Mandatory Offer of
Compensation Rule. Additionally, Defendants are involved in the conspiracy by serving
on boards and committees that oversee compliance with NAR Rules.
20. Plaintiffs, on behalf of themselves and the Class, bring this lawsuit against
Defendants for alleged violations of federal antitrust laws, seeking treble damages,
injunctive relief, and the costs of this lawsuit, including reasonable attorneys' fees.
II. JURISDICTION AND VENUE
21. This Court has subject matter jurisdiction under 28 U.S.C. §1332(d)(2),
because the Class defined herein contains more than 100 persons, the aggregate amount in
controversy exceeds $5,000,000, and at least one member of the Class is a citizen of a State
different from Defendants. Subject matter jurisdiction over this action also exists under 15
U.S.C. § 4 and under 28 U.S.C. §§ 1331, 1337.
22. This Court has personal jurisdiction over Defendants. They have: (1)
transacted substantial business in the United States, including in this District; (2)
transacted business with members of the Class throughout the United States, including in

this District; (3) had substantial contacts with the United States, including in this District;
and (4) committed substantial acts in furtherance of their unlawful scheme in the United
States, including in this District.
23. Each Defendant has received revenue attributable to business transacted in
Texas and in this District from the brokerage operations of their respective subsidiaries,
franchisees, affiliates, and/or transaction counterparts that transact business in Texas and
in this District.
24. Venue is proper in this District under 15 U.S.C. § 22 and under 28 U.S.C.
§1391(b), (c), and (d). Each Defendant transacted business, was found, had agents and/or
resided in this District; a substantial part of the events giving rise to Plaintiffs’ claims
arose in this District; and a substantial portion of the affected interstate trade and
commerce described herein has been carried out in this District.
25. The Mandatory Offer of Compensation Rule and other anticompetitive
rules promulgated by NAR have been extended and enforced by Defendants and their
co-conspirators in interstate commerce, including this District. These rules govern local
NAR associations, local brokers, and local sales agents across the entire nation.
Defendants' conduct, as alleged, has led to the inflation of buyer broker commissions
nationwide, causing harm to home sellers in numerous regions. Through Defendants,
other NAR members, and additional co-conspirators, NAR conducts business in
interstate commerce, engaging in activities that substantially impact interstate trade
within the United States.

III. PARTIES
A. Plaintiffs.
26. Plaintiff QJ Team, LLC (“QJ”) is a limited liability company organized
under the laws of the state of Texas. On or about August 9, 2023, QJ sold real property
commonly described as 3917 Legend Trail, Granbury, TX 76049. QJ used the Hexagon
Group, LLC (dba Keller Williams Central) as its listing broker. The buyer’s broker, whom
QJ paid a 3% commission to, was Square MB, LLC (dba Magnolia Realty).
27. Plaintiff Five Points Holdings, LLC (“FPH”) is a limited liability company
organized under the laws of the state of Texas. On or about July 2, 2020, FPH sold real
property commonly described as 7522 Azalea Lane, Dallas, TX, 75230. FPH used The
Michael Group LLC as its listing broker. The buyer’s broker, whom FPH paid a 3%
commission to, was Keller Williams Urban Dallas.
B. Defendants.
28. Defendant Texas Association of Realtors, Inc. (“TAR”) is a non-profit
corporation organized under the laws of the state of Texas. TAR was founded in 1920 and
is composed of over 153,000 realtors and has over 160,000 total members. 1 Over 85% of
licensed real estate agents in Texas are members of TAR.2 TAR may be served by serving
its registered agent, Travis Kessler, at 11115 San Jacinto Boulevard, Suite 200, Austin, TX
78701, or wherever he may be found.
29. Defendant Austin Board of Realtors (“ABOR”) is a non-profit corporation
1 See https://www.texasrealestate.com/wp-content/uploads/2023_TR_Fact_Sheet.pdf.
2 See id.

organized under the laws of the state of Texas. ABOR was established in 1926 and has
over 14,000 members.3 Defendant may be served by serving its registered agent, Emily
Chenevert, at 4800 Spicewood Springs Rd., Austin, TX 78759, or wherever she may be
found.
30. Defendant San Antonio Board of Realtors, Inc. is a non-profit corporation
organized under the laws of the state of Texas. Defendant may be served by serving its
registered agent, Gilbert S. Gonzales, at 9110 IH 10 West, San Antonio, TX 78230, or
wherever he may be found.
31. Defendant MetroTex Association of Realtors, Inc. (“MetroTex”) is a non-
profit corporation organized under the laws of the state of Texas. MetroTex was
established in 1917 and has over 26,000 members.4 Defendant may be served by serving
its registered agent, Janet L. Kane, at 1701 Kinwest Parkway, Irving, TX 75063, or
wherever she may be found.
32. Defendant Houston Association of Realtors, Inc. (“HAR”) is a non-profit
corporation organized under the laws of the state of Texas. HAR is the largest individual
dues-paying membership trade association in Houston, and the second largest local
association/board of realtors in the United States.5 Defendant may be served by serving
its registered agent, Grant P. Harpold, at 2229 San Felipe, Suite 1000, Houston, TX 77019,
or wherever he may be found.
3 See www.aceableagent.com/blog/what-is-austin-board-of-realtors.
4 See https://www.mymetrotex.com/are-you-ready-to-be-a-metrotex-leader/.
5 See https://cms.har.com/association_facts/.

33. Defendant ABA Management, L.L.C. (“ABA”) is a limited liability
company organized under the laws of the state of Texas. ABA does business as Allie Beth
Allman & Associates. ABA is considered one of North Texas’ top real estate firms, with
over 425 agents.6 Defendant may be served by serving its registered agent, CT
Corporation System, 1999 Bryan St., Suite 900, Dallas, TX 75201.
34. Defendant PenFed Realty, LLC (‘PenFed”) is a limited liability company
organized under the laws of the state of Virgina, with its principal place of business in
Alexandria, Virgina. It is a wholly owned subsidiary of PendFed Credit Union and it is
the largest independently owned brokerage in the Berkshire Hathaway HomesServices
network, placing it in the top 1% of all real estate brokerages in the country. It has almost
70 offices, over 2000 professionals, and provides services in Texas. 7 Defendant may be
served by serving its registered agent, Corporation Service Company dba CSC – Lawyers
Incorporating Service Company, at 211 E. 7th Street, Suite 620, Austin, TX 78701.
35. Defendant Ebby Halliday Real Estate, LLC (“Ebby”), is a limited liability
company organized under the laws of the state of Texas. Ebby Halliday Real Estate, LLC
is the largest private residential real estate company in Texas by sales volume and has
been in operation since 1945.8 Defendant may be served by serving its registered agent,
CT Corporation System, at 1999 Bryan St., Suite 900, Dallas, TX 75201.
36. Defendant The Dave Perry-Miller Company (“DPMC”), is a corporation
6 See https://www.texasmonthly.com/news-politics/allie-beth-allman-queen-of-highland-park-homes/.
7 See https://www.penfedrealty.com/real-estate-about-us.
8 https://www.housingwire.com/articles/43579-warren-buffetts-berkshire-hathaway-affiliate-buys-
ebby-halliday/

registered agent, Davidson A. Perry-Miller, at 5956 Sherry Lane, Ste 510, Dallas, TX 75225.
37. Defendant Keller Williams Realty, Inc. (“Keller Williams”) is a corporation
organized under the laws of the state of Texas. Keller Williams is a prominent real estate
franchise and brokerage firm. It was founded in Austin, Texas in 1983.9 By 2015, Keller
Williams became the largest real estate franchise in the world by agent count.10 Keller
Williams Realty is headquartered in Austin, Texas.11 Defendant may be served by serving
its registered agent, Cogency Global, Inc., at 1601 Elm Street, Suite 4360, Dallas, TX 75201.
38. Defendant Heyl Group Holdings LLC is a limited liability company
registered agent, Tim M. Heyl, at 1801 S Mopac Expy., Ste 100, Austin, TX 78746.
39. Defendant The Loken Group, Inc. is a corporation organized under the laws
of the state of Texas. Defendant may be served by serving its registered agent, Lance
Loken, at 8726 Ridgebury Circle, Houston, TX 77095, or wherever he may be found.
40. Defendant Hexagon Group, LLC is a limited liability company organized
under the laws of the state of Texas. Defendant may be served by serving its registered
agent, William E. Webb, at 3401 Lantz Circle, Plano, TX 75025, or wherever he may be
found.
41. Defendant DMTX, LLC is a limited liability company organized under the
9 https://thrive.kw.com/our-story/
10 https://thrive.kw.com/our-story/
11 https://headquarters.kw.com/contact-us/

laws of the state of Texas. Defendant may be served by serving its registered agent, Dave
Murray, at 1904 Georgia Landing Cove, Austin, TX 78746, or wherever he may be found.
42. Defendant Keller Willis San Antonio, Inc. is a corporation organized under
the laws of the state of Texas with its principal place of business in San Antonio, Texas.
Defendant may be served by serving its registered agent, Amy Clifton, at 10999 I-10 W,
Suite 175, San Antonio, TX 78230, or wherever she may be found.
43. Defendant San Antonio Legacy Group, LLC is a limited liability company
registered agent, Jerri Smallwood, at 1102 E. Sonterra Blvd., Ste. 106, San Antonio, TX
78258, or wherever she may be found.
44. Defendant Fathom Realty, LLC (“Fathom”) is a limited liability company
registered agent, Joshua Harley, at 2150 S. Central Expressway, Ste 200, McKinney, TX
75070, or wherever he may be found.
45. Defendant Grace Realty Group LLC is a limited liability company formed
agent, Steven Richards, at 5113 Trinity Landing Dr. W. Fort Worth, TX 76132, or wherever
he may be found.
46. Defendant Side, Inc. is a corporation organized under the laws of the state
of Delaware with its principal place of business in San Francisco, California. Defendant
may be served by serving its registered agent, InCorp Services, Inc., at 815 Brazos St.,
Suite 500, Austin, TX 78701.

47. Defendant Citiquest Properties, Inc. is a corporation organized under the
laws of the state of Texas with its principal place of business in Houston, Texas.
Defendant may be served by serving its registered agent, Steven P. Burbidge, at 6807
Wynwood LN., Houston, TX 77008, or wherever he may be found.
48. Defendant HomeServices of America, Inc. is a corporation organized under
the laws of the state of Delaware with its principal place of business in Edina, Minnesota.
Defendant may be served by serving its registered agent, C T Corporation System, at 1999
Bryan Street, Suite 900, Dallas, TX 75201.
49. Defendant JP Piccinini Real Estate Services, LLC (“JPP”) is a limited liability
company organized under the laws of the state of Texas. JPP is a Texas real estate firm
that was founded by Giuseppe ‘JP’ Piccinini in 2011. It is a full-service real estate brand
and franchise platform. The company has approximately 4,000 agents operating in 60
offices across 25 states and closes $8 Billion annually in sales volumes.12 It is
headquartered in Plano, Texas.13 It is considered one of America’s fastest growing 100%
commission brokerages and top 2023 franchises.14 Defendant may be served by serving
its registered agent, Cogency Global Inc., at 1601 Elm St., Suite 4360, Dallas, TX 75201.
50. Defendant Team Burns, LLC d/b/a Monument Realty (“Burns”) is a
limited liability company organized under the laws of the state of Texas. Burns is a
licensed real estate service provider in Frisco, Texas.15 It has 1,076 active agents. It has
12 See https://www.jpar.com/about-jpar/.
13 See https://www.jpar.com/about-jpar/
14 See https://www.jpar.com/about-jpar/.
15
See https://licensee.io/real-estate/9006556-team-burns-llc-tx/.

closed approximately 4,167 transactions and closed about $2.2 Billing in sales. 16
Defendant may be served by serving its registered agent, United States Corporation
Agents, Inc., at 9900 Spectrum Drive, Austin, TX 78717.
51. Defendant ABRE Capital LLC d/b/a Real Broker, LLC (“ABRE”) is a
limited liability company organized under the laws of the state of Texas. ABRE has over
12,000 agents and has sold 18.7 billion in home sales in 12 months as of June 30, 2023.
Defendant may be served by serving its registered agent, Legal Inc Corporate Services
Inc., at 10601 Clarence Dr., Ste. 250, Frisco, TX 75033.
52. Defendant Realty Austin, LLC is a limited liability company organized
agent, Maggie Simoneaux-Cuaso, at 3355 Bee Caves Road, #505, Austin, TX 78746, or
wherever she may be found.
53. Defendant ATX WIR LLC is a limited liability company organized under
the laws of the state of Texas. Defendant may be served by serving its registered agent,
Christopher Watters, at 6850 Austin Center Blvd., #320, Austin, TX 78731, or wherever
he may be found.
54. Defendant The Michael Group LLC is a limited liability company organized
agent, Corporation Service Company, at 211 E. 7th Street, Suite 620, Austin, TX 78701.
55. Defendant Square MB, LLC is a limited liability company organized under
16
See https://www.monumentrealtytx.com/.

the laws of the state of Texas. Defendant may be served by serving its registered agent,
Corporation Service Company d/b/a CSC – Lawyers Incorporating Service Company, at
211 E. 7th Street, Suite 620, Austin, TX 78701.
56. Defendant Mark Anthony Dimas is an individual who is a citizen of Texas.
Defendant may be served at his usual place of business located at 16700 Huffmeister Rd,
Cypress, TX 77429, or wherever he may be found.
57. Defendant Greenwood King Properties II, Inc. is a corporation organized
under the laws of the state of Texas with its principal place of business in Houston, Texas.
Defendant may be served by serving its registered agent, Shannon J. Skurner, at 3201
Kirby, Houston, TX 77098, or wherever she may be found.
58. Defendant Turner Mangum LLC is a limited liability company organized
agent, Jared S. Turner, at 2310 Peters Rd., Crosby, TX 77532, or wherever he may be found.
C. Co-Conspirators.
59. Defendants’ co-conspirators not named as defendants include two of the
four17 largest real estate brokers in the country: Anywhere Real Estate Inc. (f/k/a Realogy
Holdings Corp.) and RE/MAX Holdings, Inc. along with the National Association of
Realtors (“NAR”).
60. Franchisees and brokers of Defendants also participated as co-conspirators
in the violations alleged herein and performed acts and made statements in furtherance
17Keller Williams is one of the four largest real estate brokers in the country, but it is a named defendant
herein.

thereof. Specifically, each complied with and implemented the Buyer-Agent Commission
Rule in the geographic areas where the NAR MLSs operate. In addition, other brokers in
these areas have participated as co-conspirators in the violations alleged herein and
performed acts and made statements in furtherance thereof. These other brokers
complied with and implemented the Buyer-Agent Commission Rule in Texas.
61. Defendants are jointly and severally liable for the acts of their co-conspirators,
whether named or not named as Defendants herein.
IV. FACTS
A. Real Estate Market in Texas.
62. The state of Texas governs the real estate industry through its licensing
regulations. In 2022, approximately 86% of home sellers and buyers in the United States
utilized the services of real estate brokers.18 These regulations classify real estate
professionals into two primary categories: (1) real estate brokers, often referred to as
"brokerage firms," and (2) individual real estate licensees or agents. These brokers license
and assume legal responsibility for the actions of individual real estate realtors or agents
63. According to Texas law, only licensed brokers are authorized to receive
compensation for representing home buyers or sellers in real estate transactions.
Consequently, all real estate brokerage contracts must be established with brokers, not
agents, and payments to individual agents or realtors are routed through brokers. Many
brokers, along with their respective agents, often operate in dual roles, acting as seller
18 https://www.nar.realtor/research-and-statistics/quick-real-estate-statistics

brokers for some property sales and as buyer brokers for others.
64. In standard residential real estate transactions, brokers and agents receive
compensation in the form of commissions, calculated as a percentage of the property's
sale price, with the payment being realized upon the sale's completion.
65. Compensation for seller brokers is stipulated in a listing agreement, a
contract signed between the seller and the seller broker. This agreement outlines the
listing terms and often grants the seller broker exclusive marketing rights to the property.
The listing agreement also specifies the total commission to be paid by the seller.
66. When a buyer engages a broker's services, they typically enter into a
contract with that broker. If a buyer retains a broker, the seller remits the buyer broker's
compensation. Historically, NAR's Code of Ethics espoused a conduct standard that
falsely suggested to buyers that their agent's services are provided at no cost.
67. The net effect of these agreements and the Mandatory Offer of
Compensation Rule is that buyer brokers, who are tasked with representing the buyers'
interests against the sellers, receive their compensation from the overall commission paid
by the seller, not from the buyers they represent. This has led to significant confusion
regarding the functioning of commissions within the real estate market such that many
sellers do not understand how and why they are paying the buyer’s agent a 3%
commission.
68. Without the Mandatory Offer of Compensation Rule and in a competitive
market context (where sellers have no incentive to compensate a buyer broker who works
against their interests), buyers would directly pay their brokers. Sellers, in turn, would

exclusively pay a commission to their seller broker. Consequently, the seller's total broker
commission would amount to approximately half or less of the customary commission
paid to remunerate both their seller broker and the buyer's broker, who is advocating for
the buyer's interests.
B. Role of Multiple Listing Services (MLSs) and the Mandatory Offer of

Compensation Rule
69. MLSs serve as central repositories for available properties within specific
geographic areas, offering access to real estate brokers and their affiliated realtors or
agents who adhere to MLS regulations. Many MLSs are owned and managed by local
realtor associations, which are members of NAR.
70. NAR regulations mandate that seller brokers must list their clients'
properties on an MLS. Notably, the failure to list a client's property on an MLS results in
diminished visibility for that property, as it is less likely to be presented to potential
buyers by buyer brokers.
71. The Mandatory Offer of Compensation Rule imposes an obligation on seller
brokers, acting on behalf of their clients, to make a comprehensive, non-negotiable offer
of compensation to buyer brokers whenever they list a property on an MLS affiliated with
a local NAR association. In the event that a buyer, who is represented by a broker,
ultimately purchases the property, the buyer broker is entitled to the offered
compensation.
C. Anticompetitive NAR Rules
72. NAR introduced the Mandatory Offer of Compensation Rule in 1996,

incorporating it into the Handbook on Multiple Listing Policy. This rule has remained in
effect since its inception.
73. Before the adoption of the Mandatory Offer of Compensation Rule in 1996,
upon information and belief, NAR played a central role in structuring, implementing,
and enforcing a similar and equally flawed market structure. Under this system of sub-
agency, brokers representing buyers were legally obligated to act in the interest of sellers,
even when primarily working with buyers. As a result, the practice of sellers
compensating both their selling broker and the buyer's broker persisted.
74. The inefficiency and confusion inherent in this sub-agency system
ultimately led to its collapse when widely exposed in the media.
75. Following the collapse of the sub-agency system, NAR and its co-
conspirators devised and enforced an anticompetitive scheme aimed at perpetuating
supra-competitive commissions, impeding innovation, and hindering lower-priced
competition. This was accomplished through the Mandatory Offer of Compensation
Rule, officially adopted in November 1996.
76. NAR’s Board of Directors and associated committees periodically evaluate
and revise the policies in the Handbook. The Mandatory Offer of Compensation Rule has
been retained despite criticism from economists and industry experts, who argue that the
rule contributes to anticompetitive market conditions and inflated commission rates.
77. Defendants have actively participated in this anticompetitive scheme by
agreeing to follow, promote, and implement the Mandatory Offer of Compensation Rule.
These actions have established an environment that perpetuates high commissions and

restricts market competition. Indeed, in the Inman Survey (2014), 56% of agents reported
that their brokerages require a minimum total commission level to list homes for sellers
and brokerages specify a minimum commission rate that must be offered to buyer agents
when the brokerages represents the seller.
78. Furthermore, NAR has invited Defendants and other co-conspirators to join
an agreement, whereby participation in the MLS system is contingent upon compliance
with anticompetitive restraints set forth in the Handbook. Regardless of their initial
involvement in drafting or adopting the Mandatory Offer of Compensation Rule,
Defendants have since joined the conspiracy and committed to upholding and enforcing
the rule.
79. The Handbook explicitly states the Mandatory Offer of Compensation Rule,
requiring participants to make unilateral compensation offers when filing properties with
an MLS. The Handbook also stipulates that MLSs should not publish listings that do not
include compensation offers or invitations for participants to discuss cooperative
relationships.
80. The Mandatory Offer of Compensation Rule transfers a cost that would
ordinarily be paid by the buyer, in a competitive market, to the seller. Home sellers
effectively become obligated to hire a buyer broker if they want to list their property on
an MLS. The system violates antitrust laws by keeping buying agents compensated
despite offering limited services. Indeed, in the age of the internet where a buyer is able
to search and locate their next house on their computer or smartphone without the
assistance of a real estate agent—and they often do just that—a competitive market

should have forced lower buyer broker commissions as a reflection of the decreasing need
for their services.
81. In their efforts to steer clients towards homes offering higher commissions,
buyer brokers utilize the offered compensation amounts. This steering practice is
confirmed by economic literature and has clear anticompetitive effects, making it difficult
for brokers to compete based solely on the services they provide to clients.
82. Defendants and other co-conspirators also employ technology to facilitate
steering based on MLS commission information.
D. Defendants’ Participation in the Conspiracy
83. Defendants, in collaboration with NAR, have actively supported,
implemented, and enforced the Mandatory Offer of Compensation Rule. They have
required their franchisees, brokers, agents, and employees to comply with NAR rules,
including the Mandatory Offer of Compensation Rule.
84. Therefore, Defendants and their franchisees, along with their agents, have
furthered the conspiracy by agreeing to implement, follow, and enforce NAR's rules,
including the Mandatory Offer of Compensation Rule.
E. Effects of the Conspiracy
85. The conspiracy led by Defendants and NAR have had several
anticompetitive effects in Texas, including:
• Inflated Costs and Compelled High Commissions for Home Sellers: The
Defendants' conspiracy in Texas has resulted in inflated costs for home sellers.
They are compelled to pay commissions to buyer brokers who, paradoxically,
represent their adversaries in property negotiations. This practice also compels
home sellers to set high buyer broker commissions, which in turn diminishes their

control over expenses and market competitiveness.
• Payment of Inflated Commissions and Price Competition Restraint: The

conspiracy perpetuates the payment of inflated buyer broker commissions and
total commissions by home sellers, reducing the financial benefit sellers derive
from property transactions. This anticompetitive conduct significantly restrains
price competition among brokers in Texas. Both buyers seeking to retain broker
services and sellers seeking to list their properties find their choices constrained
by this manipulative environment.
• Separation of Buyer Broker Retention and Commission Setting: The conspiracy has
effectively separated the retention of buyer brokers from the setting of broker
commissions. In this distorted system, the home buyer now directly retains the
services of a buyer broker, while the seller's agent determines the compensation
for the buyer broker, exacerbating inefficiencies within the market.
86. There are no pro-competitive effects stemming from the conspiracy, which
is unequivocally anticompetitive and detrimental to the competitive landscape. And any
alleged pro-competitive benefits within the MLS system do not justify the Mandatory
Offer of Compensation Rule, as they are substantially outweighed by its anticompetitive
effects.
87. Comprehensive economic evidence supports the notion that the conspiracy
has resulted in inflated total commissions and buyer broker commissions paid by home
sellers, far exceeding what a competitive market would dictate.
88. In comparison to other countries with competitive real estate markets,
commission rates in the United States are significantly higher, including in Texas where
in 2022 the average commission was 5.59%. In fact, only 0.5% or less of sellers offer a
buyer’s agent commission below 2% in Austin, Houston, Dallas, and San Antonio. This
high commission rate prevails in the face of the realities of modern home buying where
51% of buyers find by themselves the homes they ultimately purchase on the internet, a

fact that should have radically driven down the cost of a buyer’s agent’s fee. Nonetheless,
a large majority (73%) of agents say they will not negotiate their commissions, a stance
that would be untenable in a competitive market.
89. Other economists have reached similar conclusions, highlighting the
Mandatory Offer of Compensation Rule's role in restraining price competition and
encouraging steering.
F. Defendants’ Market Power in Texas
90. The relevant market for the claims herein is the bundle of services provided
to home buyers and sellers by residential real estate brokers with access to MLSs.
Defendants' control of MLSs allows them to impose anticompetitive NAR rules on Class
members and other market participants.
91. The relevant geographic market for the claims is Texas. The vast majority
of homes sold in Texas were listed on MLSs by brokers subject to MLS and NAR
regulations.
92. Defendants and their co-conspirators collectively possess significant
market power within each relevant market. Their influence is achieved through their
participation and control over the local MLS and their substantial share of the local
market.
93. Non-conspiring brokers who aim to compete outside the conspiracy face
insurmountable barriers:
• Access to MLS is essential for brokers to effectively serve buyers and sellers in the
market.

• An alternative listing service aiming to compete with an MLS would require

listings that are as comprehensive as an MLS, but brokers within the conspiracy
lack the incentive to participate in such a service.
• Home buyers and sellers would be reluctant to utilize a new alternative listing
service without a proven track record.
• NAR advises MLSs to enter into non-compete agreements with third-party
websites.
G. Continuous Accrual.
94. Over the course of the last four years leading up to the filing of this
Complaint, Defendants, in collaboration with brokers operating within MLS-covered
regions, systematically applied and received buyer broker commissions and total
commissions at inflated rates, all due to their ongoing conspiracy. During this timeframe,
Plaintiffs and other members of the Class were obliged to remit these inflated
commissions in conjunction with the sale of residential real estate listed on MLSs. Each
such payment over the past four years resulted in harm to Plaintiffs and their fellow Class
members, giving rise to new causes of action stemming from these injuries.
95. Throughout the preceding four years, Defendants, alongside their co-
conspirators, have consistently upheld, executed, and enforced the Mandatory Offer of
Compensation Rule and various other anticompetitive NAR directives on a nationwide
scale.
V. CLASS ACTION ALLEGATIONS
96. Plaintiffs bring this action on behalf of themselves, and as a class action
under Federal Rule of Civil Procedure 23(a) and (b)(3), on behalf of the members of the
Class defined as:

All persons in Texas who, from November 13, 2019, through

the present, used any Defendant or their affiliates (with the
exception of Keller Williams Realty, Inc.) as the listing broker
in the sale of a home listed on an MLS, and who paid a
commission to the buyer’s broker in connection with the
sale of the home.
97. For Defendant Keller Williams Realty, Inc. and HomeServices of America,
Inc., those Defendants were already included in a class certified in the matter styled
Christopher Moehrl, et al. v. The National Association of Realtors, et al., Case No. 19-cv-
01610, pending in the United States District Court for the Northern District of Illinois,
Eastern Division. However, that prior class did not include sales during the entirety of
the proposed class period. Hence, a subclass for Keller Williams an HomeServices of
America, Inc. should be certified as follows:
All persons in Texas who, from January 1, 2021, through

March 29, 2023, used a listing broker affiliated with Keller
Williams Realty, Inc. or HomeServices of America, Inc. in the
sale of a home listed on an MLS, and who paid a commission
to the buyer’s broker in connection with the sale of the home.
98. Excluded from the Class are Defendants, their officers, directors and
employees; any entity in which Defendant has a controlling interest; and any affiliate, legal
representative, heir or assign of any Defendant. Also excluded from the Class are any
judicial officer(s) presiding over this action and the members of his/her/their immediate
family and judicial staff, jurors, and Plaintiffs’ counsel and employees of their law firms.
99. The Class is readily ascertainable because records of the relevant
transactions exist.
100. Class members are so numerous that individual joinder of all its members

is impracticable. Due to the nature of the trade and commerce involved, Plaintiffs believe
that the Class has many thousands of members, the exact number and their identities
being known to Defendants and their co-conspirators.
101. Plaintiffs will fairly and adequately protect the interests of the members of
the Class. Plaintiffs’ interests are aligned with, and not antagonistic to, those of the other
members of the Class.
102. Common questions of law and fact exist as to all members of the Class and
predominate over any question affecting only individual Class members. These common
legal and factual questions, each of which also may be certified under Rule 23(c)(4),
include but are not limited to the following:
a. Whether Defendants engaged in the alleged conspiracy;
b. Whether the conduct of Defendants’ and their co-conspirators
caused injury to the business or property of Plaintiffs and the other
members of the Class;
c. Whether the effect of Defendants’ conspiracy was to inflate
both total commissions and buyer broker commissions;
d. Whether the competitive harm from the conspiracy substantially
outweighs any competitive benefits;
e. Whether Defendants’ conduct is unlawful; and
f. The appropriate class-wide measures of damages.
103. Plaintiffs’ claims are typical of the claims of the members of the Class because
their claims arise from the same course of conduct by Defendants and the relief sought

within the Class is common to each member.
104. Plaintiffs have retained counsel competent and experienced in the
prosecution of antitrust class action litigation to represent themselves and the Class.
Together Plaintiffs and their counsel intend to prosecute this action vigorously for the
benefit of the Class. The interests of Class members will be fairly and adequately
protected by Plaintiffs and their counsel.
105. A class action is superior to other available methods for the fair and efficient
adjudication of this controversy. The prosecution of separate actions by individual
members of the Class would impose heavy burdens on the Court and Defendants, and
would create a risk of inconsistent or varying adjudications of the questions of law and
fact common to the Class. A class action, on the other hand, would achieve substantial
economies of time, effort, and expense, and would assure uniformity of decision as to
persons similarly situated without sacrificing procedural fairness or bringing about other
undesirable results. Absent a class action, it would not be feasible for the members of the
Class to seek redress for the violations of law alleged herein.
106. Additionally, the Class may be certified under Rule 23(b)(1) and/or (b)(2)
because:
a. The prosecution of separate actions by individual Class members
would create a risk of inconsistent or varying adjudications with
respect to individual Class members that would establish
incompatible standards of conduct for Defendants;
b. The prosecution of separate actions by individual Class members

would create a risk of adjudications with respect to them which
would, as a practical matter, be dispositive of the interests of other
Class members not parties to the adjudication, or substantially
impair or impede their ability to protect their interests; and/or
c. Defendants have acted or refused to act on grounds generally
applicable to the Class, thereby making appropriate final and
injunctive relief with respect to the Class members as a whole.
VI. ANTITRUST INJURY
107. Defendants’ anticompetitive agreements and conduct have had the
following effects, among others:
a. Sellers of residential property have been forced to pay inflated costs
to sell their homes through forced payments of commissions to
buyer brokers;
b. Home sellers have been faced with the fear of steering, such that they
set buyer broker commissions to induce buyer brokers to show the
sellers’ homes to prospective buyers;
c. Price competition has been restrained among brokers seeking to be
retained by home buyers, and by brokers seeking to represent home
sellers; and
d. Defendants and their franchisees and subsidiaries have inflated
their profits by a significant margin by the increased total
commissions and increased buyer broker commissions.

108. By reason of the alleged violations of the antitrust laws, Plaintiffs and the
Class have sustained injury to their businesses or property, having paid higher total
commissions than they would have paid in the absence of Defendants’ anticompetitive
conspiracy, and as a result have suffered damages.
109. There are no pro-competitive effects of Defendants’ conspiracy that are not
substantially outweighed by the conspiracy’s anticompetitive effects.
110. Significant economic evidence supports concluding that Defendants’
conspiracy has resulted in Class members paying buyer broker commissions and total
commissions that have been inflated to a supra-competitive level.
111. This is an antitrust injury of the type that the antitrust laws were meant to
punish and prevent.
VII. CAUSES OF ACTION
A. Count 1: Violation of Section 1 of the Sherman Act, 15 U.S.C. § 1 – Against all

Defendants (brought on behalf of Plaintiffs and the Class).
112. Plaintiffs repeat and incorporate by reference each paragraph above and in
any other count of this Complaint.
113. Beginning more than four years before the filing of this Complaint, and
continuing into the present, Defendants engaged in a continuing contract, combination,
or conspiracy to unreasonably restrain interstate trade and commerce in violation of
Section 1 of the Sherman Act, 15 U.S.C § 1.
114. The conspiracy alleged herein consists of a continuing agreement among
Defendants and Defendants’ co-conspirators to require sellers of residential property

to make inflated payments to the buyer broker.
115. In furtherance of the contract, combination, or conspiracy, Defendants and
their co- conspirators have committed one or more of the following overt acts:
a. Participated in the creation, maintenance, re-publication, and
implementation of the Mandatory Offer of Compensation Rule and
other anticompetitive NAR rules;
b. Participated in the establishment, maintenance, and implementation
of rules by local NAR associations and MLSs that implemented the
Mandatory Offer of Compensation Rule and other anticompetitive
NAR rules; and
c. Requiring franchisees of Defendants and others to implement the
Mandatory Offer of Compensation Rule and other anticompetitive
NAR rules, which each Defendant does through its franchise
agreements, policy manuals, and other contracts with its franchisees,
affiliates, subsidiaries, and realtors.
116. Defendants’ conspiracy has required sellers to pay buyer brokers, to pay an
inflated buyer broker commission and an inflated total commission, and it has restrained
price competition among buyer brokers. This harm to competition substantially
outweighs any competitive benefits arising from the conspiracy.
117. Defendants’ conspiracy has caused buyer broker commissions and total
commissions to be inflated. Plaintiffs and the other members of the Class paid these
inflated commissions during (and before) the last four years in connection with the sale

of residential real estate. Absent Defendants’ conspiracy, Plaintiffs and the other Class
members would have paid substantially lower commissions because the broker
representing the buyer of their homes would have been paid by the buyer.
118. Defendants’ conspiracy is a per se violation under the federal antitrust laws,
specifically 15 U.S.C. § 1.
119. In the alternative, Defendants’ conspiracy is illegal under the federal
antitrust laws and violates 15 U.S.C. § 1 under a rule-of-reason analysis.
120. As a direct and proximate result of Defendants’ past and continuing
violation of Section 1 of the Sherman Act, 15 U.S.C. § 1, Plaintiffs and the other Class
members have been injured in their business and property and suffered damages in an
amount to be proven at trial.
B. Count 2: Violations of the Texas Deceptive Trade Practices Act – Against

Hexagon Group, LLC and The Michael Group and (brought on behalf of
Plaintiffs)
121. Plaintiffs repeat and incorporate by reference each paragraph above and in
any other count of this Complaint.
122. Defendants acts and omissions violated the following provisions of the
DTPA:
a. Tex. Bus. & Com. Code § 17.46(b)(12), which prohibits
representing that an agreement confers or involves rights,
remedies, or obligations which it does not have or involve, or
which are prohibited by law; and
b. Tex. Bus. & Com. Code § 17.50(a)(3) which makes a defendant

liable for any unconscionable action or course of action.
123. Defendants’ acts and omissions giving rise to the above violations cannot
be characterized as advice, judgment, or opinion.
124. Defendants’ acts and omission giving rise to the above violations did not
arise from a transaction involving total consideration by Plaintiffs of more than $500,000.
125. Defendants’ violations were knowing.
126. Plaintiffs seek recovery of their economic damages, additional damages in
an amount up to three times their economic damages, reasonable attorneys’ fees, and
costs of court.
VIII. JURY DEMAND
127. Plaintiffs, on behalf of themselves and all others similarly situated, hereby
demand a jury trial of all issues so triable.
IX. PRAYER FOR RELIEF
WHEREFORE, Plaintiffs, on behalf of themselves and all others similarly situated,
request relief and pray for judgment against Defendants as follows:
a. An Order certifying the Class under the appropriate provisions of Rule 23
of the Federal Rule of Civil Procedure, and appointing Plaintiffs and their
counsel to represent the Class;
b. Declarations that the actions of Defendants, as set forth above, are unlawful;
c. A permanent injunction under Section 16 of the Clayton Act enjoining
Defendants from (1) requiring that sellers pay the buyer broker, (2)
continuing to restrict competition among buyer brokers and seller brokers,

and (3) engaging in any conduct determined to be unlawful;
d. Appropriate injunctive and equitable relief;
e. An award to Plaintiffs and the other members of the Class for damages
and/or restitution in an amount to be determined at trial;
f. An award of pre- and post-judgment interest to Plaintiffs;
g. An award to Plaintiffs for their costs of suit, including reasonable attorneys’

fees and expenses;
h. An award of such other relief as the Court may deem just and proper.

Respectfully submitted,
/s/ Julie Pettit

Julie Pettit
State Bar No. 24065971
[email protected]
David B. Urteago
[email protected]
THE PETTIT LAW FIRM
2101 Cedar Springs, Suite 1540
Dallas, Texas 75201
Telephone: (214) 329-0151
Facsimile: (214) 329-4076
Michael K. Hurst
[email protected]
Chris Schwegmann
[email protected]
Yaman Dasai
[email protected]
LYNN PINKER HURST & SCHWEGMANN, LLP
2100 Ross Avenue, Suite 2700
Dallas, Texas 75201
Telephone: (214) 981-3800
Facsimile: (214) 981-3839
Laurence D. King
KAPLAN FOX & KILSHEIMER LLP
1999 Harrison Street, Suite 1560
Oakland, CA 94612
Telephone: (415) 772-4700
Facsimile: (415) 772-4707
[email protected]

Frederic S. Fox
Jeffrey P. Campisi
Matthew P. McCahill
KAPLAN FOX & KILSHEIMER LLP
800 Third Avenue, 38th Floor
New York, NY 10022
Telephone: (212) 687-1980
Facsimile: (212) 687-7714
[email protected]
[email protected]
[email protected]
Attorneys for Plaintiffs and the Proposed

Class

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Case 4:23-cv-01013 Document 1 Filed 11/13/23 Page 1 of 35 PageID #: 1

IN THE UNITED STATES DISTRICT COURT

QJ TEAM, LLC, AND FIVE POINTS §

Plaintiffs’ Original Class Action Complaint Page 1

PLAINTIFFS’ ORIGINAL CLASS ACTION COMPLAINT

In support thereof, Plaintiffs respectfully allege as follows:

I. INTRODUCTION TO THE CONSPIRATORIAL SCHEME

This conspiracy centers around the enforcement of an anticompetitive restraint that

Department of Justice's Antitrust Division is currently conducting a thorough

broker compensation and related practices.

2. The creator of the conspiracy is the National Association of Realtors

Plaintiffs’ Original Class Action Complaint Page 2

A. NAR’s Regulatory Dominion

3. At the core of this alleged conspiracy lies NAR, an organization with

considerable influence in shaping the real estate landscape.

4. NAR wields its regulatory authority to impose a rule known as the

sweeping, non-negotiable offer of compensation to buyer brokers. The Defendants, acting

B. MLS Control and Competition Suppression

5. MLSs acting as reservoirs of property listings available for sale in defined

regulations outlined in the Handbook on Multiple Listing Policy. This handbook

explicitly incorporates the Mandatory Offer of Compensation Rule.

Plaintiffs’ Original Class Action Complaint Page 3

C. Stifling Competitive Markets

competition. Furthermore, each Defendant mandates or encourages their franchisees,

regulations, including the Mandatory Offer of Compensation Rule, as a prerequisite for

8. As prominent brokers in Texas, their involvement in the alleged conspiracy,

indispensable to the conspiracy's prosperity.

9. These anticompetitive measures favor the Defendants by enabling brokers

to impose charges on home sellers beyond competitive thresholds and thwarting

competition from innovative or lower-cost alternatives.

D. Home Seller Burden

competitive market and in the absence of the Defendants' anticompetitive restraint,

would typically be borne by the homebuyer.

11. Further, this has led to an industry-recognized practice called “steering,”

12. In the absence of NAR's Mandatory Offer of Compensation Rule, the

expense of buyer broker commissions would be incurred by the clients (homebuyers).

Plaintiffs’ Original Class Action Complaint Page 4

13. Consequently, the Mandatory Offer of Compensation Rule stifles price

the homebuyer—doesn't negotiate or pay the commission for their broker.

14. Adding to the anticompetitive implications of the Mandatory Offer of

offers that hinge on reducing the buyer broker’s commission.

16. In competitive overseas markets, when homebuyers opt to use a broker,

thousands of dollars in overcharges and damages due to Defendants' alleged conspiracy.

Plaintiffs’ Original Class Action Complaint Page 5

G. Defendants' Alleged Roles

NAR's regulations, including the Mandatory Offer of Compensation Rule.

19. Defendants also play a part in implementing the conspiracy by reviewing

Compensation Rule. Additionally, Defendants are involved in the conspiracy by serving

on boards and committees that oversee compliance with NAR Rules.

II. JURISDICTION AND VENUE

U.S.C. § 4 and under 28 U.S.C. §§ 1331, 1337.

Plaintiffs’ Original Class Action Complaint Page 6

States, including in this District.

23. Each Defendant has received revenue attributable to business transacted in

commerce described herein has been carried out in this District.

25. The Mandatory Offer of Compensation Rule and other anticompetitive