The largest of the commission copycat lawsuits following Burnett v. National Association of REALTORS®, the Gibson suit—which challenges industry commission practices and seeks damages on behalf of homesellers claiming they were charged unfairly excessive fees—added yet another layer to the growing legal battle over commissions.
Crye-Leike, one of the larger independent brokerages in the U.S., is seeking immunity in the Gibson v. NAR suit, arguing it should have been included in the nationwide NAR settlement shielding brokerages from further litigation.
In a declaration filed February 5, Steve A. Brown, president of residential sales for all Crye-Leike entities, argued that the NAR settlement should have included the brokerage since it met the immunity criteria. The Burnett settlement released brokerages that made less than $2 billion in home sales in 2022.
With a total residential transaction volume of $1,745,601,747 for 2022, Crye-Leike falls just under the $2 billion mark, satisfying the definition of a “released party” under the settlement. The other criterion is for the broker in charge to be an NAR member, which Brown is.
As most large brokerages who were not automatically included in the NAR deal have stuck separate settlement agreements, the filing by Crye-Leike demonstrates that there is still plenty of gray area as other brokerages navigate copycats and related litigation.
In a February 5 motion filed in the Western District of Missouri with Judge Stephen R. Bough—who also oversaw the Burnett case—the brokerage argues that there “is no such entity as ‘Crye-Leike.’” The figure used to exclude the brokerage from protection includes the total transaction volume for six independent companies, lawyers for Crye-Leike claim.
According to the filing, the only two things that connect the companies—other than their use of the name Crye-Leike—are that Harold Crye owns 100% of the common stock in each and that Crye-Leike, Inc. provides accounting support, human resources, information technology and in-house legal and group procurement services for the others. The independent companies—Crye-Leike of Nashville, Inc.; Crye-Leike of Arkansas, Inc.; Crye-Leike of Mississippi, Inc.; Crye Leike South, Inc.; Crye-Leike Franchises, Inc. and Adaro Realty, Inc.—each pay annual fees for these services. The companies have separate management teams and file taxes separately.
“In order to exclude Crye-Leike from the release, the Plaintiffs must show the group of companies acted as a single entity or alter-egos so that they should be viewed collectively, not individually,” the filing states.
RISMedia reached out to Crye for comment, but he declined to offer a statement while still under negotiations.
Until the NAR settlement appeals are resolved, Crye-Leike, Inc. requests that it be released from these proceedings since continuing litigation would result in unnecessary legal and financial burdens.
“If the NAR settlement does not take effect, the plaintiffs may continue this action against Crye-Leike, Inc. Plaintiffs suffer no prejudice from a stay,” the filing read. “Without the stay, however, Crye-Leike, Inc. must litigate the very claims released by approval of the NAR settlement, suffering great prejudice.”
The Gibson trial is scheduled to start on Nov. 8, 2027.
When the settlement terms were first released in March 2024, 87 brokerages were excluded from the settlement, making them liable in the lawsuits on behalf of homesellers.
