Editor’s note: The COURT REPORT is RISMedia’s weekly look at current and upcoming lawsuits, investigations and other legal developments around real estate.
NAR asks judge to throw out the remainder of lawsuit by former employee
In April, a federal judge in Illinois dismissed four out of five claims Roshani Sheth, a former product manager for the National Association of Realtors®, had brought against her former employer, including the accusations of discrimination and retaliation, writing that Sheth had not alleged enough factual evidence to proceed with the lawsuit.
Sheth later attempted to revive those claims as the case moved forward, but NAR is asking that the judge end what it described as “implausible allegations” regarding retaliation, discrimination and breach of contract.
Sheth’s claims go back to 2019, before she was interviewed for a 2023 New York Times article in which she claimed she had been fired after complaining to former NAR executives that her supervisors made disparaging comments about her race, body and marital status. She claimed—both to the Times and in her lawsuit—that she subsequently received anonymous, threatening text messages.
In its latest brief, NAR argued that new allegations in Sheth’s updated lawsuit fail to meet the legal burden to revive her claim—specifically that she does not meet a “pleading standard” around alleged “racial animus” directed at her during her employment with NAR.
The judge had not yet ruled on NAR’s motion at press time.
‘Fake leads’ lawsuit could have second life
Last summer, a group of eight real estate agents from various states, all represented by the same California attorney, filed a lawsuit on August 23 in Los Angeles Superior Court, accusing Move, Inc., the National Association of Realtors® (NAR) and Move parent company News Corp subsidiaries such as real estate lead generation technology platform Opcity of seven charges, centering around what it considers to be a “lead-generation scheme” in which the leads in question are unvetted and fraudulent.
A judge later ruled that parties had to submit to arbitration, based on terms and conditions agreed to when the agents signed up for certain lead programs.
But last week, those agents asked the judge to revive the lawsuit as they appeal to the Ninth Circuit. They claim that a designated arbitrator was not available to the defendants “due to an unrelated fee issue,” and also that defendants “failed to identify the applicable rules for arbitrating disputes.”
The fee issue in question was that “Move, Inc failed to comply with the arbiter’s policies regarding consumer claims,” the plaintiffs said, meaning they could not proceed with arbitration.
“Each plaintiff is an individual real estate agent with limited resources. It is inherently unfair for them to have to choose between pursuing their claims and feeding their families. As Defendants’ arbitration provision contained in the ‘terms and conditions’ is non-specific on the arbitration fees and costs…and which party is to bear such costs; an ambiguity is created in this regard,” the plaintiffs wrote. “Defendants have utilized their pre-designated, non-negotiable terms and conditions and such ambiguity should be construed against Defendants.”
Plaintiffs are asking the judge to reverse the previous order and allow the lawsuit to proceed in court.
Former eXp agent sues for harassment
According to the Seattle Times, another former eXp agent is alleging the company fostered an environment of sexual harassment, and that the brokerage retaliated rather than protecting her when she reported the abuse.
Ashley Golladay claims she was let go from the company in 2021 when she reported to then-CEO Jason Gesing that her supervisor, Dave Conord, was sending explicit photos to subordinates. Conord has been named in other lawsuits by women who claim the company protected multiple other top recruiters at the company who drugged and assaulted women.
The lawsuit also names other “John Does” involved in the allegedly illegal conduct. Golladay is suing to be released from a severance and NDA agreement, and the right to pursue damages.
Burnett plaintiff attorneys pursue enforcement against MLSs, associations
Coming up on a year from the implementation of new policies required by the National Association of Realtors®’ (NAR) settlement, plaintiffs are pushing forward with more specific enforcement oversight, as a court filing late last week revealed that at least 25 Realtor® associations and MLSs have received demands to prove they are complying with the new rules.
In a letter dated in April but filed last Thursday, the lawyers behind the Burnett case wrote they were providing an update to the court around “ongoing efforts to enforce practice changes,” currently in the process of “diligently reviewing” documentation submitted by MLSs and associations.
“Counsel will, if necessary, bring instances of noncompliance to the Court’s attention,” the plaintiffs wrote.
The letter is the first official acknowledgment of what plaintiffs attorneys have said publicly since last March—that they are closely watching parties covered under the settlement.
An attorney for the Burnett plaintiffs did not respond to a request for comment at press time.
