Yacht broker responds to antitrust lawsuit

A Fort Lauderdale-based yacht broker is seeking to dismiss a lawsuit alleging that it and numerous other members of South Florida’s yacht industry engage in unfair competition by requiring 10% commissions be paid by purchasers of preowned boats.

Denison Yacht Sales is the first of a group of yacht brokers, mostly based in South Florida, to respond to allegations leveled in three antitrust lawsuits filed in U.S. District Court in Fort Lauderdale.

The lawsuits claim that trade associations, including the International Yacht Brokers Association, work in conjunction with Multiple Listing Services and individual yacht brokers to require that commissions are paid to brokers for both sellers and buyers.

The first lawsuit was filed by Wyoming company Ya Mon Expeditions on Feb. 29.

The second lawsuit was filed on March 22 by Alabama customer Kip Lamar Snell, while a third was filed on March 26 by a company called Magna Charter LLC, identified as a yacht purchaser who paid a commission.

On Monday, a federal judge assigned to two of the three lawsuits agreed to a request to consolidate them into a single suit.

The lawsuits are patterned after litigation that accused the National Association of Realtors of conspiring with real estate brokers to artificially inflate commissions paid when homes are sold.

A federal jury in Kansas City, Missouri, issued a ruling in October favoring the plaintiff. On March 15, the Realtors agreed to a settlement that’s expected to force major changes in how homes are sold in the United States.

Denison’s motion in the Ya Mon Expeditions case requests dismissal of the claims against only Denison, asserting that the company “has done nothing wrong and is being sued for merely being a yacht brokerage and having had an executive that served on the board of ” the International Yacht Brokers Association.

Denison states that it has been “lumped into these broadstroke allegations” that it has “implemented,” “adopted” and “enforced” a rule requiring inflated commissions of 5% each for the seller’s and buyer’s brokers.

The lawsuits refer to the alleged commission requirement as the “Buyer’s Broker Commission

Rule.”

But Denison’s motion states that the broker “has no such requirement, does not require its brokers to be members of any association” and does not “require use of any MLS, nor mandate brokers pay cooperating brokers (inclusive of buyer’s brokers).”

Denison is “purely free market” and its “only major requirements are that its brokers be legally licensed and impeccably honest,” the motion states.

Further, the motion states that the lawsuit fails to make specific

allegations regarding Denison while making “vague and conclusory” charges against all 15 defendants.

The only specific allegation that forms the basis for naming Denison as a co-defendant, the motion states, stems from company president Bob Denison’s membership on the International Yacht Broker Association board of directors, the motion states. That allegation cannot be used to hold Denison Yacht Sales liable, because there is a lack of “evidence of actual knowledge of, and participation in” what the plaintiffs allege is an illegal scheme.

Other shortcomings of the complaint, as identified in the motion, include failure to allege reasonable restraint on trade or an antitrust injury.

Denison is represented by Beverly Hills, California-based attorney Christopher Brainard, and Emily Heim of Bayramoglu Law Office LLC of Henderson, Nevada. Heim did not respond to an email on Monday and Brainard said he had no comment on Denison’s motion or the cases against the yacht broker industry.

Denison’s response is likely just the first of a cascade of court filings to follow as the consolidated case seeks class-action status.

Late last week, attorneys came forward representing defendants Boats Group LLC, Permira Advisers LLC, United Yacht Sales LLC, HMY Yacht Sales, Galati Yacht Sales LLC, MarineMax Inc., and Northrop & Johnson Yacht Ships LLC.

On Monday, U.S. District Judge K. Michael Moore granted a request by two of the law firms representing Ya Mon Expeditions and Kip Lamar Snell to consolidate the three “nearly identical” cases into one, effective immediately.

The judge’s ruling stated that consolidating the cases would “streamline these proceedings and eliminate unnecessary repetition and confusion.”

Moore, however, said he would decide on the law firms’ request to appoint them as interim co-lead counsel in the consolidated case “in due course.”

If the request is granted, interim co-lead counsel responsibilities would be divided among Robbins Geller Rudman & Dowd LLP, an antitrust firm with offices in 10 cities, and Miami-based Podhurst Orseck P.A., a nationally known firm that specializes in complex commercial and class action claims.