Editor’s note: The COURT REPORT is RISMedia’s weekly look at current and upcoming lawsuits, investigations and other legal developments around real estate.
With just a week to go before Christmas, real estate litigation across the country continues to plow forward, with no sign of a seasonal break from a barrage of new commission lawsuits. At the same time, other, much more personal cases also saw important new developments, including a major escalation of the sexual assault allegations against eXp. And broader scrutiny of the mortgage and proptech industries continue, with at least two big-name companies under the microscope.
Here are recent developments you might have missed in the ongoing saga of legal challenges to organized real estate:
New accuser, NYT investigation hit eXp
Last week, another female eXp agent filed a lawsuit against the company and former top-performing eXp agents, alleging that she was drugged and sexually assaulted at company events, and claiming the company failed to address her reports and complaints. Specifically, eXp agent Anya Roberts claims the company’s structure, which allows agents to make money off of other agents that they have recruited, contributed to an environment where assaults and sexual misconduct are common.
At the same time, the New York Times published an investigative piece showing a larger culture of sexual misconduct at eXp. The claims follow allegations and lawsuits made by several other women back in February.
eXp has said it is committed to protecting agents, and claims it handled the behavior of “bad actors” within the company swiftly and appropriately.
Statewide commission suits break new ground
California and Texas are the latest locations for Burnett copycat claims to grow.
In California, recent homesellers echoed the Burnett claims as they filed a new suit, saying they were forced to pay supracompetitive commissions due to National Association of REALTORS®’ (NAR) rules that were supported and enforced by brokerages.
Notably, that lawsuit targeted small REALTOR® associations and a partially broker-owned MLS.
In Texas, a new lawsuit with similar claims took the bold step of naming 47 different entities as defendants, including several MLSs, brokerages (both small and large) and local REALTOR® associations. This is the second statewide suit filed in Texas, the first having been filed only weeks after the Burnett verdict.
Both of these cases closely mirror the allegations in Burnett, in substance and strategy, and both are looking at roughly the same time period to certify a class of homesellers—the past four years.
Keller Williams fraud case reassigned
A lawsuit filed by a former Keller Williams CEO alleging broad misconduct and self-dealing by the company and its co-founder, Gary Keller, was reassigned last week. The original judge, Mark Pittman, was recently found to have incorrectly imposed sanctions on parties in his court, though it was unclear if that was related to the reassignment.
Pittman, an appointee of former president Donald Trump, also recently recused himself from overseeing a high-profile lawsuit filed by Tesla CEO Elon Musk against a media watchdog organization.
Judge Reed O’Connor, an appointee of former president George W. Bush, will take over the Keller Williams case.
NAR president pens USA Today op-ed
After publishing a blistering critique of the real estate industry—and NAR in particular—by Michael Ketchmark, lead attorney for the plaintiffs in the Burnett case, USA Today allowed NAR President Tracy Kasper the chance to respond in kind.
Reiterating many of the arguments that were made in the landmark trial, Kasper focused on the value of the buyer agent, the personal, local commitment REALTORS® have to their communities and her own personal experiences.
She also pointed out that Ketchmark and other attorneys “stand to profit richly” from the lawsuits, and continued to argue that real estate commissions are negotiable.
EasyKnock settles state claims
Proptech startup EasyKnock, which claims to help homeowners unlock equity in their home by buying the home and leasing it back to them, settled with the State of Massachusetts for $200,000 and agreed to cease offering the “sale-leaseback solution” in the state.
According to the attorney general of Massachusetts, EasyKnock failed to disclose to consumers how the program actually worked, and also violated landlord-tenant laws with the program.
EasyKnock continues to deny wrongdoing, saying that its business practices were “at all times lawful and appropriate.”
Wells Fargo under scrutiny (again)
The latest in a long series of scandals and settlements spanning decades, megabank Wells Fargo could be in trouble again after it received notice from the Consumer Financial Protection Bureau (CFPB) that it may have violated fair lending laws.
A CFPB probe found that Wells Fargo—and several other mortgage lenders—were less likely to give rate discounts to Black and female borrowers, CNBC reported.
Once the largest mortgage lender in the country, Wells Fargo has been rocked by scandal after scandal, paying billions of dollars to settle a variety of investigations and violations—many centered on racial and gender discrimination.
Douglas Elliman super lawyer makes first appearance
Marc Kasowitz, whose long list of high-profile clients include former President Donald Trump, made his first appearance for Douglas Elliman in multiple national commission-focused lawsuits.
The veteran trial attorney, who has a few controversies in his past and is known for his aggressive and combative style, will be facing off against Mike Ketchmark, star attorney for the Burnett plaintiffs, in at least one of the cases.
