EXIT Realty is facing some complications in Gibson vs. NAR, as the plaintiffs do not agree with their opt-in to the NAR settlement and subsequent request for a stay.
A filing in the Gibson case—the largest class-action lawsuit filed by sellers—from Friday, June 28 states that EXIT is requesting a pause in proceedings against the company following opting into the NAR settlement, as the opt in means that both parties should be scheduling and beginning mediation rather than continuing case proceedings.
The filing stated that the brokerage has inquired twice on mediation dates and a joint motion to stay, but the plaintiffs asked for time to confer. Now, the plaintiffs are not agreeing to mediation, and are instead raising a dispute on EXIT’s ability to opt into the settlement in the first place.
The terms of the NAR settlement state that any brokerage that reported more than $2 billion in transactions during the calendar year of 2022 will have to pay 0.25% of the average of their last four calendar years of transaction volume in order to be eligible to opt in. In addition, these companies can opt in only if they had a principal who was a member of NAR, or who participated on any MLS during the last four years.
According to RISMedia’s report on brokerages eligible and not eligible for the settlement, under these guidelines, EXIT Realty is eligible to opt into the NAR settlement.
Both EXIT Realty and the plaintiffs did not immediately respond for comment.
In most cases of defendants opting into the NAR settlement, plaintiffs have agreed to allow pauses or “stays” in the various commission cases, pending final approval of the NAR settlement (scheduled for this November). This instance, however, raises the question of what benefits opting-in to the settlement provides to brokerages if plaintiffs in other cases begin to push back on it.
Similarly, in recent news, a judge in the Southern District of New York paused two key commission cases—March and Friedman—on June 26. The defendants in both cases had requested stays pending final approval of the NAR settlement, but both sets of plaintiffs argued that the cases should be judged immediately, and that granting a stay would be stating that the cases are “identical factual predicate.”
Judge Robert Lehberger chose to stay the cases, but made it clear he was not ruling on whether the New York City cases are identical or not.
This also connects back to the immunity question floating around the real estate lawsuit sphere, as conversation continues related to whether settling in current commission cases makes brokerages immune from being targeted in future similar cases.
As the NAR settlement continues toward final approval, and commission cases continue to develop, the industry may see more conflicts between defendants and plaintiffs as far as handling the NAR opt in.
This is a developing story. Stay tuned on RISMedia.com for more coverage.
