Editor’s note: The COURT REPORT is RISMedia’s weekly look at current and upcoming lawsuits, investigations and other legal developments around real estate.
Here in the liminal space between when the National Association of REALTORS® (NAR) agreed to a settlement, and when that agreement will be implemented and approved, commission class-action cases have largely slowed or stalled. While regulators appear to be actively watching the process from behind closed doors, many judges seem inclined to wait for a resolution to the larger cases before allowing individual plaintiffs to push forward with their ostensibly unique claims.
That doesn’t mean nothing is happening. Notices could go out soon regarding certain settlements, sparking more scrutiny from consumers, and buyer lawsuits have moved forward on their own separate track.
Here is the latest from court cases affecting real estate.
Jurisdictional technicality shrugged off in buyer cases
Though a few major brokerages have managed to duck large lawsuits filed by recent homebuyers based on the states they operate in, plaintiffs in those cases appear unwilling to let those defendants off the hook.
According to a recent filing, major brokerages including HomeServices, Douglas Elliman and Howard Hanna are being targeted in different states by the same plaintiffs in order to shirk the jurisdiction issue. Those lawsuits are essentially identical to the main case, known as Batton, but were filed in areas where the companies have a stronger presence.
That hasn’t stopped other companies from making the same jurisdictional argument, with both United Real Estate and eXp seeking to be dismissed from the case based on a lack of connection to Illinois, where the original Batton lawsuit was filed. It is unclear when the new lawsuits might go to trial, but the original Batton case is unlikely to be heard by a jury for at least two years.
Fathom and JPAR request extra time for mediation with plaintiffs
Three large brokerages not included in the NAR settlement and with no separate settlement agreements are seemingly open to a resolution to seller lawsuits, asking a judge to extend deadlines as the companies “are in the process of scheduling
separate mediations with the plaintiffs.”
While defendants have until Aug. 11 to pursue mediation with plaintiffs under the NAR settlement, JPAR, Fathom and Side, Inc. jointly asked for roughly another month to answer the complaint in the Texas-based Burnett copycat suit. Plaintiffs in the case did not oppose the request, which was granted by Judge Sean D. Jordan.
Pending any settlement or other resolution, the three brokerages will have to answer accusations of conspiracy and price-fixing by Aug. 15 or two weeks after the end of mediation, whichever comes sooner.
Plaintiffs push to send settlement notice in copycat case
As many major companies have reached their own settlements and received at least preliminary approval, plaintiffs in the case are eager to get the word out to members of the class—namely, recent homesellers who were allegedly harmed by real estate rules and practices.
In a filing last week, plaintiffs in the largest consolidated seller class-action are asking a judge to allow them to send notice “as soon as possible” in relation to settlements reached by Realty ONE Group, Compass, Douglas Elliman, The Real Brokerage and @properties Christie’s International Real Estate. Those notices would be emailed as well as sent by traditional postcards to hundreds of thousands of recent homesellers ahead of the final hearings to approve the agreements, which is scheduled for Oct. 31.
Notably, the settlement notice in this case informs consumers that “plaintiffs prevailed at trial against other defendants in the related Burnett action,” but adds that the court has not ruled on claims against the above-mentioned copycat defendants.
The notices also prominently display the total amount paid in all seller settlements, which is just over $971 million.
At press time, the judge had not ruled on the request to begin sending the notices out.
Judge pauses California copycat case
A unique class-action commission suit involving an NAR-independent MLS appears to be fully dormant, pending the final approval of the NAR settlement, after a judge paused deadlines for the last two defendants who have not settled—namely, eXp and Windermere.
In recent weeks, the case—filed like many others in the months after the Burnett verdict—teetered on disputes over how the settlement applied to particular parties, and who would be opting into the NAR agreement.
Judge Haywood Gilliam Jr. appeared inclined only to pause the expensive and resource-draining lawsuit for those who had a settlement in place, but seemed to change his mind, saying in a recent order that pausing the case for eXp and Windermere “reduces the risk of duplicative litigation, promotes efficiency, and conserves judicial resources.”
Plaintiffs in the case are still scheduled to file a status report roughly three weeks after the Nov. 26 hearing on the NAR settlement.
