By Lisa Willis – Daily Business Review (March 29, 2024 at 05:49 PM)
Many South Florida boat brokers may be looking for lawyers after two federal class action lawsuits were filed in Miami, alleging violations of antitrust laws in the boat sales industry regarding years of alleged excessive commission on sales.
The new filing comes on the heels of a similar class against the National Association of Realtors resulting in a March 15 settlement of $418 million dollars after a jury in October awarded $1.8 billion to class plaintiffs for violating antitrust laws.
The NAR agreed to pay the landmark settlement and change its MLS compensation rule, which mandated a uniform compensation offer to buyer’s brokers and required buyer’s agents to enter agreements with their clients, among other things.
Now the boat industry is sailing into rough waters.
“This is an important case for consumers everywhere because fair and honest competition leads to best prices and maximum efficiency,” said Boca Raton plaintiff attorney Mark Dearman of Robbins Geller Rudman & Dowd, who, along with the Podhurst Oreck’s Miami team of Ricardo Martinez-Cid, Lea P. Bucciero, and Matt Weinshall, have announced they will consolidate the filings.
“It is particularly important in South Florida because we are one of the hubs of the yachting industry,” said Dearman.
Nine attorneys have joined the lawsuits to date, including Marc Aaron Wites of Wites Law Firm in Lighthouse Point, Mark Jeffrey Dearman, Stuart Andrew Davidson and Paul Jeffrey Geller of Boca Raton firm Robbins, Geller, Rudman & Dowd and Thomas Bowen Rogers, Jr. of Wites & Kapetan, Lighthouse Point as lead attorneys. Other attorneys listed to date include Arthur L. Shingler, David W. Mitchell of Robbins Geller Rudman & Dowd’s California offices and Lindsey Handley Taylor and Anny Marie Martin of Robbins’ Boca Raton office.
The lawsuits allege that leading global yacht broker’s associations, among other entities, are exploiting boat sellers with exorbitant sales commissions upward to 10%.
The suit was initiated by Wyoming’s Ya Mon Expeditions LLC, on March 1 in Florida federal court, and followed by a March 22 filing by an Alabama man targeting the Miami-based International Yacht Brokers Association and several key industry figures in South Florida, such as Boats Group LLC, the company behind Boat Trader, Yacht World, and Boats.com.
“Because this is such a big case, and because there’s going to be interest from the media and others, we expect other suits to follow,” said Ricardo Martinez-Cid, of Podhurst Oreck. “Mark’s [Dearman] firm and our firm have a lot of history organizing these kinds of cases and we’re going to work collaboratively with everyone who does file.”
The list of defendants reads like a veritable ‘who’s who’ of the Florida boat broker industry.
Among the defendants listed are Allied Marine, Inc., Denison Yachts International, LLC., MarineMax, Inc., and Hmy Yacht Sales, Inc., in addition to the International Yacht Brokers Assoc. Inc., F/K/A Florida Yacht Brokers Assoc., and Yacht Brokers Association of America, Inc.
Nearly all the defendants are Florida or Maryland-based companies.
According to its website, the International Yacht Brokers Association (IYBA) was established in 1987 and was formerly known as the Florida Yacht Brokers Association.
Their website noted that it has “more than 1900+ members and growing” and is “the world’s largest and most influential association for the yacht brokerage & charter industry.”
The IYBA and other defendants listed did not return emails or email forms of inquiry for comment by press time.
Dearman said he cannot speculate on the amount of damages they are seeking just yet.
“We are talking about significant dollars generated in commissions on yacht sales,” Dearman said. “The litigation seeks certification on behalf of a class of persons in the United States who, from March 22, 2020, through the present, used a listing broker in the sale of a pre-owned boat or yacht listed on a MLS, and who paid a commission to the buyer’s broker in connection with the sale.”
Under the conditions set forth in the complaints, the industry standard of 10% commission on sales is in question for both larger ships and yachts and smaller vessels.
“10% is a huge amount of money and when you’re looking at a large sale or a small sale, it hurts in both regards, and it does hurt even sellers of the smaller or lower priced vessels,” said plaintiff attorney Lea Bucciero. “That’s a detriment to people and to the “little man.”
Holding the Industry Accountable
“It’s important that we get the right team in place that has the experience, the resources, and the talent to make sure that we can hold the industry accountable because they are certainly going to be bringing that to the table to defend these practices that have been resulting in their ability to reap excessive profits and charges for so many years,” said Podhurst’s Ricardo Martinez-Cid.