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Berkshire unit added to lawsuit over inflated real estate commissions

FILE PHOTO: Berkshire Hathaway logo is displayed on a screen on the floor of the NYSE in New York

By Jonathan Stempel

NEW YORK (Reuters) - A unit of Warren Buffett's Berkshire Hathaway was added on Monday to a lawsuit accusing the National Association of Realtors and several brokerages of conspiring to keep real estate commissions artificially high nationwide.

The complaint filed in a Kansas City, Missouri federal court adds Berkshire Hathaway Energy as a defendant, joining Compass, Douglas Elliman, eXp World Holdings, Redfin, United Real Estate and Weichert Realtors.

Berkshire Hathaway Energy owns HomeServices of America, in addition to a variety of assets including utilities, pipelines and renewable energy projects.

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HomeServices was among the defendants ordered last October by a Kansas City jury to pay $1.78 billion, which a judge could triple, in a similar antitrust lawsuit covering Missouri agents.

Monday's complaint will not affect that verdict, which HomeServices plans to appeal, but could increase Berkshire's financial exposure from similar litigation.

Berkshire Hathaway owns 92% of Berkshire Hathaway Energy, and has the deepest pockets among the defendants, having ended 2023 with $167.6 billion of cash and equivalents.

According to the complaint, Berkshire Hathaway Energy is liable for HomeServices' conduct by "supporting and encouraging the anticompetitive nature of its agents' activities" and "accepting the ill-gotten gains of the conspiracy."

Berkshire Hathaway Energy did not immediately respond to a request for comment after business hours.

The lawsuit is among several challenging a longstanding industry practice of having home sellers pay the combined 5% to 6% commissions for their own agents and for buyers' agents.

Critics say commissions should be lower, and sellers should be able to list homes on various databases without paying buyers' agents.

Real estate generated $4.32 billion of operating revenue for Berkshire in 2023. Overall revenue for the Omaha, Nebraska-based conglomerate totaled $364.5 billion.

The case is Gibson et al v National Association of Realtors et al, U.S. District Court, Western District of Missouri, No. 23-00788.

(Reporting by Jonathan Stempel in New York; Editing by Stephen Coates)