Warren Buffett's Brokerage Added To Ongoing Commissions Suit
Warren Buffett's real estate conglomerate has been named as a new defendant in a lawsuit against the National Association of Realtors and other big brokers for breaking antitrust laws.
HomeServices of America was added Monday to a national lawsuit alleging residential brokerages are conspiring to inflate commissions, according to The Wall Street Journal.
“What we’re trying to show is that this isn’t an isolated event in some corporate office. This goes to the top of Berkshire Hathaway,” Michael Ketchmark, a lawyer for the plaintiffs, told WSJ.
HomeServices has not responded to Bisnow's request for comment.
The suit is a national version of a lawsuit plaintiffs won in Missouri last year.
HomeServices of America, a utilities subsidiary of Berkshire Hathaway Energy that is 92% owned by its parent, was a defendant in that trial, along with two of its subsidiaries and Keller Williams. A jury ruled the defendants conspired to inflate real estate commissions artificially. The plaintiffs, a group of homeowners, were awarded $1.8B in damages, though a judge could bump that up to more than $5B, according to the WSJ.
Keller Wiliams and the other brokerages settled for $210M, a meager amount compared to what the plaintiffs were promised. But, according to plaintiffs’ attorneys, this was the most the defendants could pay without filing for bankruptcy.
The national suit initially didn’t include HomeServices. Adding the company as a defendant won’t directly affect the case but could be a play to get a large settlement, the WSJ said. The plaintiffs may run into hurdles collecting from NAR, which has $1B in assets, but Berkshire Hathaway's wallet stretches to more than $160B.
HomeServices is a defendant in 11 antitrust cases, and its losses from them could be massive. Berkshire said in its 2023 annual report that the Missouri case alone could run the firm $5.4B, and that's without attorney fees and other costs. It stated its intention to “vigorously appeal” the jury's decision, a process that could take years.
At the center of the suit is NAR, which is coming off a rough year. Its president resigned in January, less than six months into the role after replacing Kenny Parcell, who left last year after sexual harassment allegations. There are more than a dozen similar antitrust suits filed against NAR as well as various brokerages and local realtor associations.
