Bolinger v. First Multiple Listing Service, Inc.
2012 WL 137883
N.D. Ga.2012Background
- Plaintiffs filed a putative class action under RESPA, the Sherman Act, and Georgia law against FMLS, Boards of Realtors, multiple brokerages, and individuals.
- FMLS operates a MLS database with Rule 6 requiring members to list in a defined Compulsory Area; members’ access and participation drive settlement-related activities.
- Hidden Settlement Fees are charged by brokers to FMLS from settlement proceeds and are then paid back via commission splits, allegedly funding a minimum commission floor.
- Kickbacks are allegedly funded by commingled Hidden Settlement Fees and paid to certain broker members in exchange for referrals; disclosure to buyers/sellers allegedly occurs nowhere on HUD-1.
- Plaintiffs contend the fees and kickbacks are not services-justified, are unsafely coordinated, and suppress competition, with alleged ABA between FMLS and brokers/agents.
- The court grants in part and denies in part the motion to dismiss, dismissing some RESPA, Sherman Act, UDTPA, and conspiracy claims while allowing others to proceed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| RESPA § 8(a) kickbacks viability | Plaintiffs allege Kickbacks are fees for referrals, paid by brokers to FMLS from settlements. | Defendants argue FMLS’s services are not ‘business incident to settlement services’ and no referral occurred since plaintiffs were not charged. | Section 8(a) claim survives against FMLS and brokers. |
| RESPA § 8(b) Hidden Settlement Fee theory | Hidden Settlement Fees constitute a prohibited fee split of real estate commissions with no services rendered. | Defendants contend the fees are tied to FMLS’s services and may be deemed a permissible fee, not a split of commissions. | Both Hidden Settlement Fee theory and Kickback theory survive against FMLS and brokers. |
| RESPA § 8(b) Kickback theory applicability to Agents | Kickbacks via Hidden Settlement Fees implicate Defendant Agents as contributing to splits and benefiting from kickbacks. | Argument centers on whether Agents themselves paid or benefited from Kickbacks. | Kickback theory viable against Agents as plausibly participating in the split. |
| RESPA § 8(c)(4) independent ABA liability | ABA is alleged between FMLS and brokers/agents; failure to disclose ABA violates 8(c)(4). | Defendants argue no independent ABA liability and that 8(c)(4) is safe harbor only; lack of credible ABA is fatal. | Section 8(c)(4) provides an independent basis for liability; ABA alleged plausibly exists and violates conditions. |
| Sherman Act § 1 price-fixing claim | Defendants allegedly conspired to fix broker commissions via MLS rules or data sharing. | Plaintiffs fail to plead an agreement; mere membership and data access do not show conspiracy. | Plaintiffs fail to plead a plausible agreement to fix commissions; Sherman Act claim is dismissed. |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (U.S. 2009) (plausibility standard for pleading; no bare conclusions)
- Bell Atl. Corp. v. Twombly, 550 U.S. 554 (U.S. 2007) (parallell conduct requires plausible violation; not mere possibility)
- City of Tuscaloosa v. Harcros Chemicals, Inc., 158 F.3d 548 (11th Cir. 1998) (threshold requirement of conspiracy; agreement to restrain trade)
- In re Delta/Air-Tran Baggage Fee Antitrust Litig., 733 F. Supp. 2d 1348 (N.D. Ga. 2010) (parallel conduct plus conspiracy requires additional factual support)
- Realty Multi-List, Inc. v. Realty Multi-List, 629 F.2d 1351 (5th Cir. 1980) (concerted action from MLS rules can constitute conspiracy)
- Minter v. Wells Fargo Bank, 274 F.R.D. 525 (D. Md. 2011) (Section 8(c) independent liability for ABAs; references RESPA statute and HUD regulations)
- Pettrey v. Enterprise Title Agency, Inc., 241 F.R.D. 268 (N.D. Ohio 2006) (ABA liability independent of 8(a)/(b) under § 8(c)(4))
- Hunnings v. Texaco, Inc., 29 F.3d 1480 (11th Cir. 1994) (treatment of evidence and pleadings at motion to dismiss stage)