Editor’s note: The COURT REPORT is RISMedia’s weekly look at current and upcoming lawsuits, investigations and other legal developments around real estate.

NAR defends Compass subpoena in private listing lawsuit

The latest dust-up in the battle between now defunct PLS.com and the National Association of Realtors® (NAR) continues, as both parties await a judge’s decision on whether Compass can be compelled to provide witness and other evidence in the case.

Last week, a filing from NAR’s attorneys outlines the association’s opposition to a motion—by Compass, which is a non-party in the case—to quash subpoenas issued by NAR.

Within the memorandum, NAR argues that “Compass wants to supply PLS a friendly Compass witness while simultaneously, and blanketly, refusing to produce any documents for fair cross-examination. That hand-picked witness is Compass’s Chief Strategy Officer, Ashton Alexander.”

After significant back-and-forth, it appeared that NAR had dropped its demand to depose Compass CEO Robert Reffkin, but the two sides continue to wrangle over other witnesses—including rank-and-file Compass agents—as well as document requests that Compass has described as overly broad and “burdensome.”

“As outlined in our court filing, the petitioners cannot provide a witness to testify in support of PLS while simultaneously refusing to produce documents necessary for NAR to fairly cross-examine its witness,” an NAR spokesperson told RISMedia.

The association also argues that through various email threads, Reffkin and Alexander coordinated with PLS co-founder Mauricio Umansky in a “quest” against NAR’s Clear Cooperation Policy (CCP). PLS first sued NAR (and big MLSs) way back in 2020, settling with the MLSs and temporarily dropping the case against NAR before reviving it last year.

NAR’s court filings included emailed exchanges between Compass executives and Umansky over the last two years, including Reffkin sharing an op-ed slamming Clear Cooperation ahead of publication, and talking points on the policy ahead of both men attending an industry conference in early 2025.

In a joint filing from Compass and NAR, the brokerage argued that subpoenaing six non-party witnesses—including Reffkin, Alexander and Compass President of Integrated Services Cory Perkins—is “unduly burdensome on its face.”

NAR’s subpoenas focus on communications with clients and how those clients want to list their homes for sale, documents about membership in real estate trade association and other communications that Compass argues NAR should also possess.

So far, Compass stated that NAR is retaliating against Compass because one executive agreed to provide a deposition testimony for PLS.

NAR, on the other hand, argues that Alexander’s deposition and the documents it requested could implicate the testimony or documents of the other Compass-affiliated agents.

“The stakes are high,” NAR’s argument states.

The association’s explanations for the subpoenas also touch upon requests for further information from Compass, specifically information that PLS cannot provide.

“(The documents the parties themselves have produced) do not entail the Compass-affiliated agents’ listing agreements, which would reflect seller opt-outs of the MLS, or show whether off-MLS marketing was driven by seller preference or the agent’s business objectives. The bare listing information that PLS produced does not absolve Compass of its duties; PLS, for example, never tracked sales data,” NAR’s argument states.

Both parties, and Compass as a non-party, await a judge’s decision on whether the brokerage will have to provide the subpoenaed documents and communications.

Another player enters Compass MLS lawsuits

The Northern California-based MLS, MLSListings, announced that it has joined six MLSs in their federal lawsuit against Compass.

The six other MLSs in the lawsuit alongside MLSListings are Arizona Regional Multiple Listing Service (ARMLS), BridgeMLS, Canopy MLS, Doorify MLS, Hive MLS and REcolorado.

Two other MLSs—OneKey and CRMLS—are suing Compass in a separate but largely identical lawsuit. All of the MLS’ appeared to have received legal threats from Compass back in September, focused on listing restrictions.

According to the amended complaint, the lawsuit arises from a “campaign by Compass to pressure MLSs into changing cooperation rules in a way that would favor Compass but would make the market for residential real estate less transparent and less competitive, ultimately hurting consumers.”

“In Silicon Valley and throughout Northern California, buyers, sellers and real estate professionals depend on timely, accurate information to make important financial decisions,” MLSListings President and CEO Dave Wetzel said. “When publicly marketed homes are withheld from the shared marketplace, buyers lose access to opportunities, sellers may miss potential offers, and smaller brokerages are placed at a disadvantage. We are joining this lawsuit to defend the cooperation that gives everyone a fair opportunity to compete and helps consumers make informed decisions.”

Although the case is still ongoing and has just begun, the results of the lawsuit could change how brokerages list their properties on MLS databases. The amended complaint argues that Compass “wants to have its cake and eat it too,” where the brokerage may benefit from listings provided by other brokerages onto each MLS, without having to add their own listings into the database.

Initially, ARMLS and its fellow organizations filed the lawsuit against Compass on Oct. 21, after California Regional Multiple Listing Service (CRMLS) filed its initial complaint against the brokerage a few weeks prior.

MLSListing’s participation in the lawsuit adds another name to Compass’s list of disgruntled MLSs. The New York-based MLS, OneKey® MLS, had also joined CRMLS as a plaintiff in its federal lawsuit against Compass last week.

Alexander brothers sentenced to 30 years in prison

The affluential luxury real estate brokers, Tal and Oren Alexander, along with their brother Alon were sentenced to 30 years in federal prison last week.

Earlier in March, the brothers were found guilty on all charges of rape and sex-trafficking, after several named and unnamed women came forward and shared their stories.

One victim, under the pseudonym Isa Brooks, stated that she was just 16 years old when two of the brothers and their friend had raped her.

“I cry for the innocence of that terrified 16-year-old and stand for her today,” Brooks said, reported by CNN. “Their eyes went black. As if I was being mauled by animals.”

“I grieve the girl that I was,” she said.

The case began toward the end of 2024, where the brothers were arrested on charges of operating “a long-running sex trafficking scheme, as part of which they raped and sexually assaulted women to whom they had provided ‘material benefits,’ including domestic and international travel to vacation destinations, luxury accommodations at high-end hotels and vacation properties, and access to other luxury experiences and events,” according to a filed indictment.

Within the court proceedings, Judge Valerie Caproni showed little mercy for the brothers, who continued to claim their innocence to the charges throughout the sentencing process.

“Your crimes wreaked havoc on their lives. It has caused long lasting damage to them. Many have significant problems trusting people,” Caproni said, reported by CNN.

Despite several letters written to Caproni by friends and family of the Alexander brothers, Caproni once again reprimanded the trio for their crimes and their conduct.

“You did not have to stand up and say you’ve never raped anyone,” Caproni said, according to ABC News. “That’s a lie and you know it.”

Zillow pays out over $210 million to settle shareholders

After nearly five years of court proceedings, a settlement was reached in Jaeger v. Zillow Group litigation, in which shareholders argued that the portal did not adequately disclose its struggles to ramp up its now-defunct iBuying business, and misled investors.

Last Wednesday, Zillow announced that it would pay out over $212.5 million to the shareholders, who claimed that the portal had misrepresented the success of “Zillow Offers,” and failed to accurately disclose struggles it faced in flipping homes.

Both Zillow and Hagens Berman—the plaintiff’s attorneys for the case—have stated that they are satisfied with the settlement and await a judge’s approval.

“We are incredibly pleased to obtain this result for investors,” said Steve Berman, managing partner of Hagens Berman.

In a statement shared with RISMedia, a Zillow spokesperson commented, “We are pleased that the parties have reached a resolution on the matter.”

According to a regulatory filing from Zillow, about $48 million of the settlement will be paid through insurance proceeds. Hagens Berman said in a statement the settlement was “potentially the largest single securities settlement in the history of the Western District of Washington federal court.”

Prior to the settlement, the case was slated to reach trial in September 2027.

The case began with Zillow’s iBuying business, also known as Zillow Offers, which was launched in spring 2018. Zillow Offers was a house flipping initiative, where the company promised that it could scale the business model of buying and quickly flipping homes using technology to predict short-term market fluctuations and patterns.

Zillow Offers was shut down later in 2021, and sold a backlog of nearly 18,000 homes at a loss of about $550 million. Within the original complaint, Hagens Berman argued that several statements and communications from Zillow were “materially false and/or misleading” and had failed to disclose “material adverse facts” about Zillow’s business, operations and prospects.

Homebuyer sues Keller Williams over $650 “junk fee”

Broker fees are once again on the receiving end of litigation, as one homebuyer in Pennsylvania filed a complaint—consisting of over 30 pages—against Keller Williams Elite in Lancaster County’s Court of Common Pleas.

According to the complaint, Gregory Deivert, a recent buyer client, is suing the franchise over a $650 fee that he claims is essentially for nothing.

“The fee had no service behind it, no cost behind it, and no name that accurately describes it. It is money taken from a client by the broker who was supposed to be looking out for him,” the complaint states.

A final settlement statement was included in the filing, and the complaint references the breakdown of fees within the statement. Deivert’s attorney argues that the $650 broker fee is a prototypical “junk fee,” and that Keller Williams Elite was fully compensated for its services by the $14,700 commission it received from the seller.

The issue of “junk fees” is nothing new to the real estate industry. In 2024, the Consumer Financial Protection Bureau (CFPB) launched a formal inquiry into the issue of extra fees tacked onto home mortgage costs.

Generally, the complaint argues that customarily, broker fees are paid for by the seller and are included in the broker’s commission. Within the lawsuit, Deivert is suing the brokerage for a breach of fiduciary duty and a violation of the Pennsylvania Unfair Trade Practices and Consumer Protection Law.

As for relief, Deivert is asking for $50,000 from the brokerage, along with a declaration that Keller Williams Elite will be prohibited from charging the $650 fee again, and labeling it as a fixed fee for broker compensation without disclosing what it entails.

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