A federal judge has denied an attempt by William Raveis and Berkshire Hathaway Energy (BHE), the parent company of HomeServices of America, to enforce arbitration clauses in listing agreements, and effectively stymie ongoing class-action commission litigation against the two companies.
In a filing today in the Gibson lawsuit—the largest Burnett copycat, filed by the same lawyers—Judge Stephen R. Bough of the Western District of Missouri characterized the request by the two companies as premature, and cited a previous ruling in the Burnett case that held nonparties cannot compel arbitration.
“Further, as class certification has not occurred, putative non-party class members are not subject to the Court’s jurisdiction. Therefore, the Court declines to stay the proceedings in this litigation,” Bough wrote in a short order Monday afternoon.
Last month, BHE and William Raveis petitioned Bough to either throw out the case or pause it, citing clauses in most company’s listing agreements that reserved disputes for arbitration. During the Burnett litigation, HomeServices had made similar arguments, which were denied by the Eighth Circuit Court of Appeals, which wrote that companies were not parties to the agreements signed by agents and their clients.
HomeServices subsequently appealed that ruling to the U.S. Supreme Court, which declined to take up the case.
Citing the Eighth Circuit’s decision, Bough wrote that even apart from the higher court’s opinion, the sellers who signed the listing agreements in question are not yet certified as a class, and that any decision on arbitration would have to come after that certification takes place.
It is unclear what will happen next. BHE had specifically requested a pause if Bough were to deny the arbitration aspect of their arguments, so that it could appeal his ruling to the Eighth Circuit. Bough did not specifically address this request, but simultaneously issued a separate order denying a similar petition by Crye-Leike (on very different grounds).
While a majority of the dozens of defendants in the Gibson case have struck settlements, a handful have continued to fight on, as has BHE, which plaintiffs have accused of benefitting from the alleged misconduct of HomeServices and having a close relationship with it as a subsidiary.
When HomeServices settled the seller commission lawsuits, the company specifically ensured that the deep-pocketed Warren Buffett empire, including BHE, did not have to pay any of the $250 million settlement. The conglomerate brought in about $25 billion in revenue in 2023, according to publicly available documents.
The Gibson case is tentatively set for a trial in late 2027.
