Editor’s note: The COURT REPORT is RISMedia’s weekly look at current and upcoming lawsuits, investigations and other legal developments around real estate.
Trump’s DOJ outlines stance in new intervention in buyer case
After months of silence—and some indications that it was backing off its most aggressive positions—the Department of Justice (DOJ) under President Donald Trump is again addressing what it describes as “anticompetitive rules, policies and practices in the residential real-estate industry” as it intervened in yet another commission case last week.
In a 23-page “statement of interest” signed by Assistant Attorney General Gail Slater and filed last Friday, the DOJ wrote to a judge overseeing one of the buyer commission cases—where plaintiffs have argued that the same conduct and rules at issue in Burnett also harmed buyers—to say that commissions are still possibly inflated and urging a judge to view “unreasonable” association rules as inherently unlawful.
“This case presents another opportunity for a court to assess purportedly anticompetitive agreements infecting the real-estate industry,” the DOJ wrote.
While focusing on more technical aspects of Howard Hanna’s arguments in the case, the filing also appears to restate the DOJ’s concerns about allegedly anticompetitive practices that were raised both under Biden and the first Trump administration. Notably, the filing refers to an investigation the DOJ undertook into NAR in the past tense, without further updates or details.
The filing also centers around economic issues, claiming that competition in real estate “ensures low commissions and promotes high-quality brokerage services aimed at helping buyers find and afford their ideal home,” as the Trump administration faces pressure to address housing affordability.
eXp plaintiffs defend fraud claim, focused on emotional harm
In the late stages of a lawsuit in which four women are suing eXp over alleged druggings and sexual assaults at company events, along with an extensive coverup by top company executives, the plaintiffs are seeking to add new fraud charges against the brokerage based on the assertion (and in at least one instance, admission) that eXp did not investigate their complaints.
While eXp has claimed that the women cannot add the new charges both on technical grounds, as well as due to the fact that the company did, in fact, take statements and interview some parties after the women made their reports, the plaintiffs point to notes taken by at least one executive who wrote explicitly the company was not investigating one of the men accused of multiple assaults, along with other seeming misrepresentations by company brass.
“Plaintiffs were required to repeatedly recount their assaults to senior corporate officials,” their lawyers wrote in a filing on Dec. 19. “Despite knowing that no legitimate investigation was occurring and that it lacked investigative capacity, Defendants continued to solicit Plaintiffs’ accounts of what occurred and failed to retain outside investigators.”
In a previous filing, eXp argued that “(b)eing unhappy with the manner in which the investigation was conducted, or the results of the investigation, are simply not the same thing as the eXp Entities falsely representing that an investigation was being conducted.”
While eXp has also claimed that plaintiffs did not suffer any quantifiable harm from the alleged misrepresentations, the plaintiffs are arguing the fraud claim is warranted due to the emotional harm of “retraumtitization” (sic) through having to relive their experiences, often to “unqualified” eXp representatives who were seemingly not even conducting a formal investigation.
“Plaintiffs’ claim is not that Defendants investigated poorly or negligently, but that Defendants affirmatively represented that an investigation would be conducted, that an investigation existed when they knew it did not, a distinction California law recognizes as the difference between negligence and fraud,” they wrote.
At press time, a judge had not yet ruled on whether the fraud claim can proceed. A trial in the case is scheduled for next June.
Burnett judge orders Weichert to comply with discovery in settlement spat
While nearly all the brokerages named in copycat lawsuits have struck settlements with the lawyers behind the original two cases (known as Moehrl and Burnett), earlier this year, eXp and Weichert negotiated deals in one of the smaller copycat cases, sparking a flurry of controversy across two courtrooms.
Shortly after the deals were made public, the lawyers behind Burnett accused defendants of engaging in a so-called “reverse auction,” meaning they simply sought out the lawyers who would settle for the lowest amount, and sought to undo the settlements.
Judge Stephen R. Bough of the Western District of Missouri, overseeing the largest copycat case filed by the Burnett attorneys, found that accusation credible, and has allowed the Burnett lawyers to investigate how that deal was struck. On Dec. 19, he ordered Weichert to comply with new discovery requests, writing that if they do not do so by Feb. 19, the plaintiffs can file for sanctions against the brokerage, after what was a three-minute hearing, according to court documents.
Separately, Judge Mark Cohen in the Northern District of Georgia, overseeing the other copycat case (known as 1925 Hooper v. NAR), is allowing the settlement to proceed, with both eXp and Weichert seeking his preliminary approval for their deals (including monetary payments of $34 million and $8.5 million, respectively, lower than what the Burnett plaintiffs had discussed with the companies). Cohen previously disallowed the Burnett plaintiffs from formally intervening in the Georgia case, though they still filed objections, claiming that the other lawyers “failed to adequately represent” the homesellers who were harmed.
The Hooper plaintiffs noted that they agreed to only 20% attorneys fees on the settlement, while the Burnett plaintiffs had sought 33%, and defended the process by which they negotiated with eXp and Weichert.
