Case: 1:19-cv-01610 Document #: 325 Filed: 06/14/22 Page 1 of 88 PageID #:17681
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`
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`UNITED STATES DISTRICT COURT
`NORTHERN DISTRICT OF ILLINOIS
`EASTERN DIVISION
`
`CHRISTOPHER MOEHRL, MICHAEL
`COLE, STEVE DARNELL, VALERIE
`NAGER, JACK RAMEY, SAWBILL
`STRATEGIC, INC., DANIEL UMPA, and
`JANE RUH, on behalf of themselves and all
`others similarly situated,
`
`
`
`Plaintiffs,
`
`
`
`v.
`
`
`THE NATIONAL ASSOCIATION OF
`REALTORS, REALOGY HOLDINGS
`CORP., HOMESERVICES OF AMERICA,
`INC., BHH AFFILIATES, LLC, HSF
`AFFILIATES, LLC, THE LONG &
`FOSTER COMPANIES, INC., RE/MAX
`LLC, and KELLER WILLIAMS REALTY,
`INC.,
`
`
`
`
`Defendants.
`
`
`
`
`
`
`
`Civil Action No.: 1:19-cv-01610
`
`Judge Andrea R. Wood
`
`)
`)
`)
`)
`)
`)
`)
`) Magistrate Judge M. David Weisman
`)
`)
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`
`DEFENDANTS’ MEMORANDUM
`IN OPPOSITION TO
`PLAINTIFFS’ MOTION FOR
`CLASS CERTIFICATION AND
`APPOINTMENT OF CLASS COUNSEL
`
`DEFENDANTS’ MEMORANDUM IN OPPOSITION TO PLAINTIFFS’ MOTION FOR
`CLASS CERTIFICATION AND APPOINTMENT OF CLASS COUNSEL
`
`
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`

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`Case: 1:19-cv-01610 Document #: 325 Filed: 06/14/22 Page 2 of 88 PageID #:17682
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`TABLE OF CONTENTS
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`Page
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`TABLE OF AUTHORITIES ......................................................................................................... iv
`
`INTRODUCTION .......................................................................................................................... 1
`
`STATEMENT OF FACTS ............................................................................................................. 5
`
`I.
`
`II.
`
`III.
`
`IV.
`
`V.
`
`VI.
`
`Residential Real Estate in the United States. .......................................................... 5
`
`The National Association of REALTORS® and the Challenged
`Rules. ...................................................................................................................... 7
`
`A.
`
`B.
`
`C.
`
`D.
`
`MLS Policy Statement 7.23 ........................................................................ 8
`
`Standards of Practice (“SOPs”) 16-16 and 3-2 ........................................... 8
`
`“One Sided Commission Transparency” and Steering. ............................ 10
`
`The “Free” Rule ........................................................................................ 11
`
`Plaintiffs’ Experts’ Theories of Harm. .................................................................. 11
`
`The Natural Experiments of Northwest MLS, West Penn MLS, and
`REBNY. ................................................................................................................ 15
`
`Home Services of America ................................................................................... 16
`
`Keller Williams ..................................................................................................... 18
`
`VII. Realogy ................................................................................................................. 19
`
`VIII. RE/MAX, LLC ..................................................................................................... 21
`
`ARGUMENT ................................................................................................................................ 23
`
`I.
`
`Plaintiffs Have Failed To Meet Their Burden to Prove That
`Common Issues Predominate Over Purely Individual Issues. .............................. 23
`
`A.
`
`Plaintiffs Have Proposed No Valid Method of Proving
`Class-Wide Impact Using Common Proof. .............................................. 25
`
`1.
`
`Plaintiffs Have No Class-Wide Evidence to Show
`They Are “Forced” to Offer Cooperative
`Compensation By the Challenged Rules. ...................................... 26
`
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`-i-
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`a)
`
`b)
`
`Plaintiffs’ “Steering” Theory Cannot Serve
`As Class-wide Proof Of Impact. ....................................... 28
`
`The Evidence Contradicts Plaintiffs’ Claims
`of Class-wide Impact. ....................................................... 30
`
`Plaintiffs Have No Class-Wide Evidence that
`Buyers Would No Longer Use Buyer Brokers or
`that Sellers Would No Longer Be Incentivized to
`Pay For Them. ............................................................................... 32
`
`a)
`
`b)
`
`Buyers Would Still Use Buyer Brokers. ........................... 32
`
`Because Sellers Would Be Incentivized To
`Offer Cooperative Compensation Even
`Without the Rule, Individual Issues
`Predominate. ..................................................................... 37
`
`Plaintiffs Have Not Met Their Burden in Providing
`Class-Wide Evidence That Uninjured Sellers Don’t
`Exist, But Instead, Only Offer the Unreliable Say-
`So Of Their Experts. ..................................................................... 39
`
`a)
`
`b)
`
`The Elhauge and Economides Reports
`Cannot Be Considered Because They Are
`Inadmissible under Daubert. ............................................. 39
`
`Even If Considered, The Elhauge and
`Economides Reports Do Not Support Class
`Certification. ..................................................................... 41
`
`Plaintiffs Have No Common, Class-wide Proof that
`Class Members Would be Better Off in the But-For
`World. ........................................................................................... 52
`
`Plaintiffs’ Mode of Class-wide Impact Fails to
`Account for Real-world Variation in Commission. ...................... 57
`
`2.
`
`3.
`
`4.
`
`5.
`
`B.
`
`C.
`
`Plaintiffs’ Claimed Common Class-wide Evidence of
`Conspiracy Ignores Predominant Individualized Issues
`Raised in Defense. .................................................................................... 58
`
`The Fatal Flaws in Plaintiffs’ Class-Wide Damages Model
`Preclude Class Certification. ..................................................................... 61
`
`1.
`
`Plaintiffs’ Liability and Damages Theories Fail
`Under Comcast. ............................................................................. 62
`
`-ii-
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`
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`2.
`
`3.
`
`Plaintiffs’ Damages Model Fails To Consider the
`Impact of Eliminating the Offer of Cooperative
`Compensation ............................................................................... 62
`
`Plaintiffs’ Damages Model Fails to Account for
`Individualized Factors That Explain Class
`Members’ Commission Rates ....................................................... 63
`
`D.
`
`E.
`
`Plaintiffs Cannot Show that a Class Action is a Superior
`Method of Adjudication. ........................................................................... 64
`
`Plaintiffs Incorrectly Argue that Per Se Analysis is
`Appropriate Here. ..................................................................................... 65
`
`II.
`
`Plaintiffs Have Failed To Satisfy The Rule 23(a) Factors. ................................... 66
`
`A.
`
`B.
`
`Plaintiffs Have Failed to Satisfy Commonality. ....................................... 66
`
`Plaintiffs Have Failed to Satisfy Typicality. ............................................. 66
`
`The Court Should Not Certify The Proposed Rule 23(b)(2)
`Injunctive Relief Class. ......................................................................................... 68
`
`Plaintiffs’ Proposed Class Definition is Overbroad, Because It
`Fails to Exclude Sellers Who Have Agreed to Arbitrate This and
`Related Disputes. .................................................................................................. 70
`
`The Western District of Missouri’s Decision in Burnett v. NAR is
`Not Persuasive. ..................................................................................................... 73
`
`III.
`
`IV.
`
`V.
`
`CONCLUSION ............................................................................................................................. 74
`
`
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`Case: 1:19-cv-01610 Document #: 325 Filed: 06/14/22 Page 5 of 88 PageID #:17685
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`
`
`TABLE OF AUTHORITIES
`
`Cases
`Advanced Aerofoil Techs., Inc. v. Todaro,
`No. 11-cv-7866, 2011 U.S. Dist. LEXIS 137230 (N.D. Ill. Nov. 30, 2011) ............................. 72
`AD/SAT, Div. of Skylight, Inc. v. Associated Press,
`181 F.3d 216 (2d Cir. 1999) ..................................................................................................... 58
`Affymax, Inc. v. Johnson & Johnson,
`420 F. Supp. 2d 876 (N.D. Ill. 2006) ......................................................................................... 72
`Am. Honda Motor Co. v. Allen,
`600 F.3d 813 (7th Cir. 2010) ........................................................................................ 39, 73, 74
`Avilez v. Pinkerton Gov. Servs., Inc.,
`596 F. App’x 579 (9th Cir. 2015) .............................................................................................. 71
`Barber v. United Airlines, Inc.,
`17 F. App'x 433 (7th Cir. 2001) ................................................................................................ 52
`Bell Atl. Corp. v. AT&T Corp.,
`339 F.3d 294 (5th Cir. 2003) .................................................................................................... 25
`Berni v. Barilla S.p.A.,
`964 F.3d 141 (2d Cir. 2020) ..................................................................................................... 69
`Blades v. Monsanto,
`400 F.3d 562 (8th Cir. 2005) .................................................................................. 30, 36, 37, 39
`Blanton v. Domino’s Pizza Franchising LLC,
`962 F.3d 842 (6th Cir. 2020) .................................................................................................... 71
`Butler v. Sears, Roebuck & Co.,
`727 F.3d 796 (7th Cir. 2013) .................................................................................................... 63
`Cates v. Whirlpool Corp.,
`2017 WL 1862640 (N.D. Ill. May 9, 2017) ........................................................................ 48, 52
`Chen v. Yellen,
`2021 WL 4192078 (N.D. Ill. Sept. 15, 2021) ........................................................................... 52
`Chicago Teachers Union, Local No. 1 v. Board of Educ.,
`797 F.3d 426 (7th Cir. 2015) .................................................................................................... 70
`Clark v. Bumbo Int’l Trust, No. 15-C-2725,
`2017 WL 370825 (N.D. Ill. Aug. 28, 2017) ............................................................................. 68
`Colby v. J.C. Penney Co.,
`811 F.2d 1119 (7th Cir. 1987) .................................................................................................. 73
`
`
`
`
`
`-iv-
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`
`

`

`Case: 1:19-cv-01610 Document #: 325 Filed: 06/14/22 Page 6 of 88 PageID #:17686
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`
`
`Comcast Corp. v. Behrend,
`569 U.S. 27 (2013) ............................................................................................................. passim
`Concord Boat Corp. v. Brunswick Corp.,
`207 F.3d 1039 (8th Cir. 2000) .................................................................................................. 30
`DePaepe v. GMC,
`141 F.3d 715 (7th Cir. 1998) .................................................................................................... 43
`Dime Grp. Int’l, Inc. v. Soyuz-Victan USA, LLC,
`No. 07-c-4178, 2008 U.S. Dist. LEXIS 11488 (N.D. Ill. Feb. 13, 2008) .................................. 72
`Elorac, Inc. v. Sanofi-Aventis Canada, Inc.,
`No. 14-C-1859, 2017 WL 3592775 (N. D. Ill. Aug. 21, 2017) ................................................ 43
`Exhaust Unlimited, Inc. v. Cintas Corp.,
`223 F.R.D. 506 (S.D. Ill. 2004) .................................................................................... 30, 31, 41
`Gatore v. United States Dep't of Homeland Sec.,
`327 F. Supp. 3d 76 (D.D.C. 2018) ........................................................................................... 69
`Gumwood HP Shopping Partners, LP v. Simon Prop. Group., Inc.,
`221 F. Supp. 3d 1033 (N.D. Ind. 2016) .................................................................................... 29
`Hanover Shoe Inc. v. United Shoe Mach. Corp.,
`392 U.S. 481 (1968) .................................................................................................................. 55
`Hathaway v. Bazany,
`507 F.3d 312 (5th Cir. 2007) .................................................................................................... 52
`Hawkins v. Groot Indus., No. 01 C 1731,
`2003 WL 22057238 (N.D. Ill. Sept. 2, 2003) ........................................................................... 68
`Hettinger v. Glass Specialty Co., Inc.,
`59 F.R.D. 286 (N.D. Ill. 1973) .................................................................................................. 28
`Hughes Masonry Co. v. Greater Clark Cty. Sch. Bldg. Corp.,
`659 F.2d 836 (7th Cir. 1981) ..................................................................................................... 72
`In re Aluminum Warehousing Antitrust Litig.,
`336 F.R.D. 5 (S.D.N.Y. 2020) ...................................................................................... 41, 57, 65
`In re Aluminum Warehousing Antitrust Litig.,
`833 F.3d 151 (2d Cir. 2016) ..................................................................................................... 67
`In re Bridgestone/Firestone, Inc.,
`288 F.3d 1012 (7th Cir. 2002) .................................................................................................. 29
`In re Dairy Farmers of Am., Inc. Cheese Antitrust Litig., No. 09-CV-3690,
`2013 WL 4506000 (N.D. Ill. Aug. 23, 2013) ........................................................................... 67
`
`
`
`v
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`Case: 1:19-cv-01610 Document #: 325 Filed: 06/14/22 Page 7 of 88 PageID #:17687
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`
`
`In re Dealer Mgmt. Sys. Antitrust Litig., No. 18-CV-864,
`2020 WL 832365 (N.D. Ill. Feb. 20, 2020) .............................................................................. 71
`In re Dynamic Random Access Memory Antitrust Litig.,
`No. M 02-1486 PJH, 2007 WL 9752971 (N.D. Cal. Feb. 20, 2007) ........................................ 61
`In re Flash Memory Antitrust Litig., No. C-070086,
`2010 WL 2332081 (N.D. Cal. Jun. 9, 2010) ....................................................................... 32, 64
`In re Fluidmaster Inc. Product Liab. Litig.,
`No 14-CV-5696, 2017 WL 1196990 (N.D. Ill. Mar. 31, 2017) ............................................... 68
`In re Graphics Processing Units Antitrust Litig.,
`235 F.R.D. 478 (N.D. Cal. 2008) .............................................................................................. 30
`In re Lamictal Direct Purchaser Antitrust Litig.,
`957 F.3d 184 (3d Cir. 2020) ............................................................................................... 39, 57
`In re New Motor Vehicles Canadian Exp. Antitrust Litig.,
`522 F.3d 6 (1st Cir. 2008) ................................................................................................... 28, 29
`In re Optical Disk Drive Antitrust Litig.,
`303 F.R.D. 311 (N.D. Cal. 2014) .............................................................................................. 30
`In re Pharmacy Benefit Managers Antitrust Litig.,
`No. CV 03-4730, 2017 WL 275398 (E.D. Pa. Jan. 18, 2017) .................................................. 63
`In re Photochromic Lens Antitrust Litig.,
`2014 WL 1338605 (M.D. Fla. April 3, 2014) ........................................................................... 30
`In re POM Wonderful LLC,
`No. ML 10-02199 DDP RZX, 2014 WL 1225184 (C.D. Cal. Mar. 25, 2014) ......................... 63
`In re Publ’n Paper Antitrust Litig.,
`690 F.3d 51 (2d Cir. 2012) ....................................................................................................... 61
`In re Rail Freight Surcharge Antitrust Litig.,
`775 F.3d 244 (D.C. Cir. 2013) .................................................................................................. 39
`In re Steel Antitrust Litig.,
`No. 08-C-5214, 2015 WL 5304629 (N.D. Ill. Sept. 9, 2015) ....................................... 24, 25, 30
`In re Titanium Dioxide Antitrust Litig.,
`962 F. Supp. 2d 840 (D. Md. 2013) .......................................................................................... 73
`In re Wholesale Grocery Prod. Antitrust Litig.,
`No. 09-MD-2090 ADM/AJB, 2012 WL 3031085 (D. Minn. Jul. 25, 2012), aff’d in rel. part,
`752 F.3d 728 (8th Cir. 2014), aff’d, 946 F.3d 995 (8th Cir. 2019) ........................................... 32
`In re Zurn Pex Plumbing Prods. Liab. Litig.,
`644 F.3d 604 (8th Cir. 2011) .................................................................................................... 74
`
`
`
`vi
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`Case: 1:19-cv-01610 Document #: 325 Filed: 06/14/22 Page 8 of 88 PageID #:17688
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`
`
`In re: Online Travel Co.,
`953 F. Supp. 2d 713 (N.D. Tex. 2013) ..................................................................................... 73
`Kendall v. Visa U.S.A., Inc.,
`518 F.3d 1042 (9th Cir. 2008) .................................................................................................. 60
`Kenosha Liquor Co. v. Heublein, Inc.,
`895 F.2d 418 (7th Cir. 1990) .............................................................................................. 42, 43
`Kleen Prods. LLC v. Int’l Paper,
`276 F. Supp. 3d 811 (N.D. Ill. 2017) ........................................................................................ 59
`Kleen Products LLC v. Int’l Paper Co.,
`831 F.3d 919 (7th Cir. 2016) .................................................................................................... 24
`Kohen v. Pacific Investment Management Co. LC & PIMCO Funds,
`571 F.3d 672 (7th Cir. 2009) .................................................................................................... 68
`Los Angeles Mem’l Coliseum Comm’n v. Nat’l Football League,
`791 F.2d 1356 (9th Cir. 1986) .................................................................................................. 55
`Marrese v. Am. Acad. of Orthopaedic Surgeons,
`No. 80 C 1405, 1991 WL 5827 (N.D. Ill. Jan. 15, 1991),
`aff'd, 977 F.2d 585 (7th Cir. 1992) ........................................................................................... 60
`Messner v. Northshore Univ. Health Sys.,
`669 F.3d 802 (7th Cir. 2012) .................................................................................. 13, 24, 25, 39
`Minpeco, S.A. v. Conticommodity Servs., Inc.,
`676 F. Supp. 486 (S.D.N.Y. 1987) ........................................................................................... 55
`Nichols v. Mobile Board of Realtors, Inc.,
`675 F.2d 671 (5th Cir. 1982) .................................................................................................... 36
`O’Connor v. Uber Techs.,
`904 F.3d 1087 (9th Cir. 2018) .................................................................................................. 71
`O’Shea v. Littleton,
`414 U.S. 488 (1974) .................................................................................................................. 69
`Oshana v. Coca-Cola Bottling Co.,
`225 F.R.D. 575 (N.D. Ill. 2005) ................................................................................................ 68
`People Who Care v. Rockford Bd. Of Educ., Sch. Dist. No. 205,
`111 F.3d 528 (7th Cir. 1997) .................................................................................................... 51
`Randall v. Rolls-Royce Corp.,
`637 F.3d 818 (7th Cir. 2011) .................................................................................................... 70
`Reed v. Advocate Health Care,
`268 F.R.D. 573 (N.D. Ill. 2009) ......................................................................................... passim
`
`
`
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`Case: 1:19-cv-01610 Document #: 325 Filed: 06/14/22 Page 9 of 88 PageID #:17689
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`
`
`Reifert v. S. Cent. Wis. MLS Corp.,
`450 F.3d 312 (7th Cir. 2006) .................................................................................................... 65
`Retired Chi. Police Ass'n v. City of Chi.,
`7 F.3d 584 (7th Cir. 1993) ........................................................................................................ 68
`Riffey v. Rauner,
`910 F.3d 314 (7th Cir. 2018) .................................................................................. 13, 26, 57, 64
`Robinson v. Texas Auto. Dealers Ass’n,
`387 F.3d 416 (5th Cir. 2004) .................................................................................................... 32
`Santangelo v. Comcast Corp., No. 15-cv-0293,
`2017 WL 6039903, 2017 U.S. Dist. LEXIS 200935 (N.D. Ill. Dec. 6, 2017) .......................... 71
`Seals v. Nashville Bd. of Realtors,
`No. 79-3245-NA-CV, 1980 WL 1896 (M.D. Tenn. May 5, 1980) .......................................... 36
`Suchanek v. Sturm Foods, Inc.,
`764 F.3d 750 (7th Cir. 2014) ........................................................................................ 13, 24, 66
`Tan v. Grubhub, Inc.,
`No. 15-cv-05128-JSC, 2016 WL 4721439 (N.D. Cal. July 19, 2016) ...................................... 71
`Tepper Realty Co. v. Mosaic Tile Co.,
`259 F. Supp. 688 (S.D.N.Y. 1966) ............................................................................................ 72
`Texaco v. Dagher,
`547 U.S. 1 (2006) ...................................................................................................................... 65
`TransUnion LLC v. Ramirez,
`141 S. Ct. 2190 (2021) .............................................................................................................. 68
`Truesdell v. Thomas,
`889 F.3d 719 (11th Cir. 2018) .................................................................................................. 28
`Tseng v. Nordstrom, Inc.,
`No. 2:11-CV- 08471-CAS, 2014 WL 174946 (C.D. Cal. Jan. 15, 2014) ................................. 28
`Tyson Foods, Inc. v. Bouaphakeo,
`577 U.S. 442 (2016) .................................................................................................................... 3
`United States v. Bestfoods,
`524 U.S. 51, 61 (1998) ............................................................................................................. 60
`United States v. Realty Multi-List, Inc.,
`629 F.2d 1351 (5th Cir. 1980) .................................................................................................. 65
`Wal-Mart Stores Inc. v. Dukes,
`564 U.S. 338 (2011) .................................................................................................................. 70
`
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`
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`Winstar Comms., LLC v. Equity Office Props., Inc.,
`170 F. App’x 740 (2d Cir. 2006) .............................................................................................. 67
`
`
`Other Authorities
`6 Newberg on Class Actions § 20:23 (5th ed.).............................................................................. 36
`
`Rules
`Fed. R. Civ. P. 23 ................................................................................................................... passim
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`Case: 1:19-cv-01610 Document #: 325 Filed: 06/14/22 Page 11 of 88 PageID #:17691
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`INTRODUCTION
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`Plaintiffs brought this lawsuit based on the unsupported and untested hypothesis that a
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`rule requiring real estate brokers representing home sellers to offer compensation to buyer
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`brokers is all that stands between our current system and the things they claim to observe in
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`certain cherry-picked markets outside the United States. Instead of the current system, Plaintiffs
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`offer a radical proposal: Plaintiffs would have the Court embrace an amalgamation of the real
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`estate systems in three somewhat random countries—Australia, the United Kingdom, and the
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`Netherlands—as the way homes should be sold in the United States, and (according to Plaintiffs)
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`would be if not for the rules of the National Association of REALTORS® (“NAR”) they
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`challenge in this case. If Plaintiffs’ hypothesis was correct, the practices prevailing in those
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`countries would replace the manner in which residential real estate has been sold in the United
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`States for more than 100 years, a system that aligns the interests of home sellers and home
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`buyers alike, helps cash-constrained and first-time buyers achieve the dream of home ownership,
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`and is supported by sound economic principles. But Plaintiffs offer no reliable evidence, much
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`less evidence common to the class of home sellers they purport to represent, to support their
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`hypothesis that the NAR rules they challenge caused any home seller or his or her real estate
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`broker to offer to pay the buyer broker’s commission, or was the source of any of the market
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`characteristics they like less than what they claim to see overseas.
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`Plaintiffs’ case generally, and their class certification motion specifically, suffers from
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`many defects. At the outset, the NAR rule challenged by Plaintiffs has nothing whatsoever to do
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`with the amount of commission charged by listing brokers. This NAR rule—the “Cooperative
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`Compensation Rule”—does not require listing brokers to make any specific offer of
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`compensation; compensation offers as low as one penny or one dollar are permitted. Plaintiffs
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`nonetheless claim that this Rule is somehow responsible for uniformly inflating the commissions
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`every home seller in twenty widely different geographic areas agreed to pay to their listing
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`brokers—without regard to the facts of any specific transaction.
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`Not only do Plaintiffs demand a wholesale change to the United States residential real
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`estate system because of a rule that does not require any specific level of compensation, they also
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`seek to certify a massive class covering perhaps millions of home sellers and seek to recover
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`upwards of $40 billion. Plaintiffs’ class action gambit is doomed. Plaintiffs face an
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`insurmountable class certification hurdle in establishing antitrust impact with common class-
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`wide evidence. Most critically, how will Plaintiffs establish that, in the absence of the
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`Cooperative Compensation Rule, sellers in the putative class would have acted differently? In
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`other words, how will Plaintiffs prove at a class trial that class members would not have offered
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`the same cooperative compensation to the buyer’s broker short of a mini-trial with questions
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`posed to each seller? On this key issue Plaintiffs have failed to provide a trial plan showing how
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`the Court might try these claims on a class-wide basis. And this is not some hypothetical
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`concern. That is because every real estate transaction is unique. Every buyer and seller are
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`unique, every property is unique, every home is unique, and every transaction (including the
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`negotiation over commission amount) is unique. Plaintiffs’ effort to try to characterize a highly
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`localized and individualized process implemented by hundreds of thousands of independent
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`contractor real estate agents as a supposedly common, uniform course of conduct, in which all
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`agents and consumers make precisely the same decisions and evaluate homes, pricing, contract
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`terms, and service offerings in the same way, will not be able to run the gauntlet of obstacles that
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`Rule 23 poses here.
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`Thinking about the proofs needed in an individual plaintiff case helps illustrate the
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`impossible task facing the Court if the class were certified. To connect the Cooperative
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`Case: 1:19-cv-01610 Document #: 325 Filed: 06/14/22 Page 13 of 88 PageID #:17693
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`Compensation Rule to a home seller’s alleged “overpayment,” an individual plaintiff would need
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`to show that the Rule affected the behavior of at least four different, and independent, parties: (1)
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`Plaintiff home sellers themselves; (2) the sellers’ listing brokers; (3) the individual buyers who
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`bought Plaintiffs’ homes; and (4) the individual buyer brokers. Each Plaintiff would need to
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`show that, absent the Rule, he or she would have demanded that the listing broker accept a
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`smaller commission than what the plaintiff actually agreed to pay, and that each Plaintiff’s
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`listing broker would have acceded to that demand. Each Plaintiff would also need to show that,
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`absent the Rule, his or her listing broker would have agreed to list the house for sale without an
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`offer of cooperative compensation to the buyer broker; that the purchaser of each of their homes
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`would have agreed to compensate his or her buyer broker out of the buyer’s own pocket (or
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`would have forgone using a buyer broker entirely); and that each purchaser had the means to do
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`so and complete the purchase at the same ultimate purchase price. Defendants would be entitled
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`to introduce evidence of their own on all of these topics, including testimony from each of the
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`brokers and purchasers involved in the sale transactions that give rise to each of the Plaintiffs’
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`claims. Trying just the claims of the handful of named Plaintiffs would require days of
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`inherently individualized evidence.
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`This factual complexity cannot be ignored just because Plaintiffs want to proceed on
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`behalf of a class. Tyson Foods, Inc. v. Bouaphakeo, 577 U.S. 442, 458 (2016) (class certification
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`cannot give “plaintiffs and defendants different rights in a class proceeding than they could have
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`asserted in an individual action”). And Plaintiffs have utterly failed—in fact, not even really
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`tried—to show how these claims could be tried on behalf of their massive proposed class based
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`on common evidence. Plaintiffs’ motion is completely silent on how the facts underlying their
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`Case: 1:19-cv-01610 Document #: 325 Filed: 06/14/22 Page 14 of 88 PageID #:17694
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`claims might be introduced or adjudicated on behalf of the class as a whole; indeed, Plaintiffs
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`have not even addressed the facts underlying each of their own, personal claims.
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`Nor do the opinions of Plaintiffs’ proposed experts, Einer Elhauge and Nicholas
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`Economides, supplant the need for individualized inquiries into antitrust impact from the
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`Cooperative Compensation Rule. First, as Defendants establish in their separate motion, neither
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`of those expert reports is admissible under Daubert. Second, even if those reports are
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`admissible, they fall far short of the standard that Plaintiffs need to satisfy to obtain class
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`certification. Neither Elhauge nor Economides purports to analyze the actual facts and data
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`presented in this case as “proof” that the Rule had an actual effect on the commissions paid by
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`each named Plaintiff and each and every putative class member. Instead, both experts simply
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`provide lengthy argument that U.S. residential real estate purchases and sales should operate
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`differently when it comes to broker compensation, and if they did operate differently, Plaintiffs
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`would have been better off. But the opinions of Plaintiffs’ experts do not resolve the issue of
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`antirust impact. Even those experts admitted that in their imagined but-for world some sellers
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`would compensate the buyer’s broker. And there is no way of figuring out whether any given
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`seller in the proposed class would have done so without individual evidence from each class
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`member. That individualized inquiry into whether a seller would have offered cooperative
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`compensation if his or her agent were not required to do so under MLS rules would overwhelm
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`common evidence and Plaintiffs’ expert testimony is no substitute for such individualized proof.
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`Because Plaintiffs cannot establish predominance as well as other Rule 23 requirements,
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`Plaintiffs’ motion should be denied.1
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`1 It is of no moment that a damages class was recently certified by the Western District of Missouri in
`Burnett v. National Association of Realtors, No. 19-cv-00332-SRB. While that case addresses the same
`Cooperative Compensation Rules in four Missouri MLSs, the decision is not persuasive, is based on
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`Case: 1:19-cv-01610 Document #: 325 Filed: 06/14/22 Page 15 of 88 PageID #:17695
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`I.
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`STATEMENT OF FACTS2
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`Residential Real Estate in the United States.
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`Consumers in the United States typically use real estate agents or brokers when they buy
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`or sell a home.3 Sellers ret