Several large brokerages are angling to garner more immunity from commission lawsuits as the final hearing for their settlement agreements looms, with eight companies filing their arguments in court yesterday asking the judge to approve their respective agreements—and also explicitly indemnify them in cases that are not identical to the main class-action suits.
Compass, Douglas Elliman, Engel & Völkers, HomeSmart, Realty ONE Group, United Real Estate, @properties Christie’s International Real Estate and The Real Brokerage are scheduled to come before a federal judge for a final “fairness hearing” in Kansas City, Missouri, next week. If their settlements are approved, these companies would join RE/MAX, Anywhere and Keller Williams in having significantly more certainty that their businesses are indemnified from current and future class-action litigation.
Notably, in the 28-page joint filing, the eight brokerages are asking Judge Stephen R. Bough, who is overseeing the largest consolidated seller copycat case, to reject formal objections by plaintiffs in separate cases (namely, two New York City-based lawsuits filed by sellers, and a handful of national suits filed by buyers), with plaintiffs in those cases arguing their claims are separate and can continue despite the settlements.
“The Objectors’ argument that the purported use of different rules, namely (Real Estate Board of New York) rules instead of NAR rules, creates a distinct agreement and conspiracy is unavailing. Using different tools to achieve the same ends does not, in and of itself, create a distinct conspiracy, agreement, or factual predicate,” the brokerages wrote.
Proposed settlement payments from the eight companies had not all previously been made public, but according to the latest feeling, total $110.6 million, with Compass making up the majority of that from a $57 million agreement struck back in March. Total settlement payments proposed or paid out in commission cases currently total just over $1 billion.
Lawyers representing multiple objectors are expected to make their arguments in-person during the hearing on October 31, when Bough will consider whether or not to sign off on the agreements. In just over a month, Bough will also preside over a hearing for the National Association of REALTORS® (NAR).
While there will likely be several sets of objectors, the two most high-profile come from the aforementioned buyer and New York plaintiffs.
Lawyers behind the buyer cases previously objected unsuccessfully to how Bough interpreted the Keller Williams, Anywhere and RE/MAX settlement agreements, and subsequently appealed to the Eight Circuit, with that case pending. The plaintiffs behind two New York City copycat cases, known as March and Friedman, have previously argued that the unique landscape of New York City real estate and a lack of involvement by NAR in the market should be enough to separate their claims from the national suits and settlements.
The Real Estate Board of New York, or REBNY, oversees transactions across Manhattan and many other parts of New York City, and has been independent from NAR for decades.
Plaintiffs behind the larger case (known as Gibson/Umpa), who negotiated the agreement, made their own arguments in favor of the settlements being approved, claiming the deals are fair and pushing back against plaintiffs in the other cases.
“Each objector essentially asks the Court to discard the Settlements because each wishes to continue pursuing its own copycat case on a classwide basis. But the objectors fail to address the essential problem underlying their position: the alternative to a nationwide settlement is sprawling litigation comprised of potentially dozens of local suits that would bankrupt each of these Defendants in the event any one case succeeds,” the Gibson/Umpa attorneys wrote. “Copycat counsels’ objections should be rejected.”
Bough previously overruled the objections by buyers and other copycat plaintiffs who objected to the Keller Williams, Anywhere and RE/MAX settlements, and also wrote in his formal approval that the immunity extends to any potential lawsuit involving “any multiple listing service nationwide, regardless of affiliation or association with NAR or not, and thus includes, e.g., NWMLS, WPMLS, and REBNY/RLS.”
