By Gerald L. Maatman, Jr. and Sean P. McConnell
Duane Morris Takeaways: On February 20, 2024, Judge Andrea R. Wood of the U.S. District Court for the Northern District of Illinois granted Defendants’ motion to dismiss with respect to a federal antitrust claim seeking injunctive relief for violations of Section 1 of the Sherman Act, among other claims, in Batton, et al. v. The National Association of Realtors, et al., No. 21-CV-00430 (N.D. Ill. Feb. 20, 2024). The Court accepted defense arguments that the members of the putative class were only indirect purchasers of buyer-broker services; therefore the Court opined that they were barred from seeking damages under federal antitrust law by Illinois Brick Co. v. Illinois, 431 U.S. 720, 729 (1977), and dismissed the claim for injunctive relief under Section 1 because the more directly injured home sellers are challenging the same rules and seeking the same injunction in separate, related cases.
Batton is required reading for any corporate counsel handling antitrust class action litigation involving indirect purchasers.
Case Background
Plaintiffs are homebuyers. Defendants, National Association of Realtors (“NAR”), Realogy Holdings Corp., HomeServices of America, Inc., HSF Affiliates, LLC, Long & Foster Companies, Inc., BHH Affiliates, LLC, RE/MAX LLC, and Keller Williams Realty, Inc. utilized a Multiple Listing Service (“MLS”) in the sale of homes. Plaintiffs alleged that MLS access was restricted only to home sellers who make a set commission offer to the successful buyer-broker, resulting in supracompetitive commission rates that get baked into the purchase price for homes. Plaintiffs brought a claim for injunctive relief under Sherman Act Section 1 as well as various state antitrust and consumer protection claims.
The Court’s Ruling
Although Illinois Brick does not preclude indirect purchasers like the putative class of homebuyers from pursing claims for injunctive relief under the Sherman Act, the Court dismissed the claim. It reasoned that because the more directly injured home sellers were challenging the same rules and seeking the same injunction in separate litigation before the same Court, the claim could not stand.
Implications For Defendants
Batton could be an important test of indirect purchasers’ ability to use antitrust law when there are other purchasers better suited to bring federal antitrust claims. Hence, it is an important decision in this space.