Appeal Hearing Threatens Nar Settlement, Raising Industry Uncertainty

It has been nearly two years since the National Association of Realtors’ (NAR) commission lawsuit settlement rocked the real estate industry, but that same settlement may yet again be making waves in 2026. 

On Wednesday, a hearing regarding several appeals of the final approval of the settlement is being held in St. Louis, Mo. in the Eighth Circuit Court of Appeals. While a judgement is not expected until at least the spring, the real estate industry may need to buckle up for some more commission lawsuit drama. 

After the settlement gained final approval in late November 2024, several parties, many of whom had originally objected to the settlement, filed appeals of Judge Stephen Bough’s final approval ruling. The two central appeals filed came from Tanya Monestier, a law professor at the University of Buffalo, and James Mullis, a plaintiff in the Batton homebuyer commission lawsuits.

The appeals in question

In her appeal, Monestier argues that the monetary relief provided to settlement class members is inadequate. According to her calculations, the roughly 40 million class members are expected to share roughly $650 million in monetary relief, resulting in a payout of about $16 per person. In comparison, Monestier estimates that the average damages per seller to be a little over $11,000.

Due to the amount of monetary relief, Monestier argues that much of the value to the settlement class relies on the injunctive relief granted, which came in the form of the business practice changes. However, she argues that the business practice changes are worthless because they do not eliminate cooperative compensation, allowing for steering to persist via agent work arounds, and that no actual enforcement for the business practice changes exists. 

In addition, she argues that while the settlement class consists of past home sellers, the business practice changes benefit future home sellers. According to Monestier, the plaintiffs acknowledged this in the initial lawsuit, and as a constitutional law problem, the federal court should not ignore it.

While Mullis also objected to and ultimately appealed the final approval of the settlement like Monestier, the issues he has with the settlement are a bit different.

In his appeal, Mullis argues that the settlement releases are too vague and could be interpreted by settling defendants that class members who are also homebuyers, including plaintiffs like those in Batton, have been released from or are barred from pursuing buyer-side claims, even though the buyer cases were litigated separately. Through his appeal, he is seeking clarifying language so the settlements cannot be purported to release Batton homebuyer claims.

It ain’t over yet

Although very few would like to acknowledge it, these appeals present the very real chance that approval of the settlement could be vacated, resulting in the case being remanded back to the district court. 

“The result of vacating the NAR Settlement, of course, would be pure chaos in the industry,” Rob Hahn, an attorney and industry commentator, wrote in his NotoriousROB newsletter. 

According to Hahn, if the settlement is remanded, all of the work that went into implementing the business practice changes will go out the window and instead the industry will be consumed by uncertainty of what the “new new” rules will be. 

In his newsletter, Hahn primarily focused on Monestier’s arguments. If the appellate court agrees with the points she makes, he says that any new settlement will have to see a massive increase in monetary damages or the business practice changes will have to be “extremely severe and worth something to home sellers who already ‘overpaid’ under the old system.”

Unlikely brokerage firms and NAR can pay more

If the monetary damages awarded were to increase to just 10% of the collective $458 billion in home seller overpaid commissions, NAR and other major brokerages would be expected to pay roughly $46 billion, an amount Hahn doubts the industry could collectively pay. 

Bradley Weber, co-leader of Troutman Pepper Locke’s antitrust practice, agrees with Hahn that NAR most likely would find it challenging to pay an increased settlement amount. As a result, he sees a simple argument for the defendants if they are pressed on this issue. 

“I think their argument is that they can’t really pay more,” Weber said. “NAR is a trade association and it would probably bankrupt them to pay more than what they have already agreed to and, in my opinion, the appellate court might be sympathetic to that and give discretion to the district court.” 

As for the rest of Monestier’s argument, Weber does see the issue that the settlement offers both monetary and injunctive relief to the same class. He noted that a settlement with similar relief was remanded by the Second Circuit for the district court to create two separate classes, and he said he could potentially see something similar with this settlement, depending on how the Eighth Circuit views the issue. 

Weber also feels like Mullis has made some good points in his appeal. 

“I think that would be a pretty good argument if I were objecting to the settlement,” Weber said. 

That being said, if the Eighth Circuit agrees that the settlement covers both home sellers and homebuyers, lawyers tell HousingWire that anyone who was both a homebuyer and a home seller during the settlement class period, would lose their potential rights to file a claim as a homebuyer, which would have a drastic impact on the potential class size in lawsuits like the two Batton complaints.

What happens next? 

If the appeals court reverses the approval of the settlement, it will be remanded back to the district court and the parties will then have to address the reasons why the appellate court found it to be inadequate or unfair. 

According to Charles Cain, an attorney and the president of Alliance Solutions, the ruling by the appeals court will determine exactly what kind of work the parties will have in front of them if the case is remanded.

“It could be something as simple as, ‘The court rejects the settlement and sends the parties back to the district court.’ It would be that short of a decision or there might be detailed instructions of what exactly the appeals court felt was an issue.” 

On the off chance that a new settlement cannot be reached, the case would be relitigated, but attorneys do not feel that is a real possibility. 

No turning back

However, even if the settlement is remanded, the attorneys who spoke with HousingWire do not believe the industry will ever go back to sharing offers of cooperative compensation on the MLS. 

“My gut says that they are not going to go back in part because of the Department of Justice (DOJ) and the fact that it could still pursue claims under federal antitrust laws. If an MLS goes back to the old way of doing things, I think they are inviting a DOJ action,” Weber said. 

Attorneys also raised the possibility that the DOJ could file an amicus brief in the Eighth Circuit as it has done in other commission lawsuit litigation and even other appeals involving NAR rules, including the REX lawsuit over the now defunct optional no-commingling rule. 

For now, the future of the NAR settlement and its business practice changes remains murky. 

“I think there are some pretty good arguments as to why the approval of the settlement may have gone a little too far,” Weber said. “It is just unclear if the appeals court could potentially latch on to any of these issues to find a reason to reverse the approval and remand the settlement back to the district court.” 

In an emailed statement, an NAR spokesperson wrote that the trade group will “continue to advocate for the court-approved commission settlement at the upcoming oral arguments and throughout the appeals process.”

“The practice changes enacted following the settlement have further empowered consumers to negotiate compensation and promoted transparency in the marketplace. Importantly, the appellate arguments, by themselves, do not alter the practice changes or any part of the court-approved settlement,” the spokesperson wrote.