Sitzer | Burnett Judge Consolidates 2 Nationwide Commission Suits
The Gibson and Umpa cases allege Berkshire Hathaway Energy, eXp, Redfin, Weichert, United Real Estate, Douglas Elliman, HomeSmart and others conspired against homesellers nationwide.
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The same judge overseeing the bombshell Sitzer | Burnett antitrust commission case has merged two major similar suits filed in his court challenging the current U.S. commission structure and aiming to represent millions of homesellers nationwide.
On Tuesday, Judge Stephen R. Bough of the U.S. District Court for the Western District of Missouri approved a motion to consolidate the cases, known as Gibson and Umpa after their lead plaintiffs. The Sitzer | Burnett plaintiffs’ attorneys filed Gibson on Oct. 31, minutes after a jury in Sitzer | Burnett awarded $1.78 billion in damages to a class of approximately 500,000 Missouri homeowners after finding the National Association of Realtors (NAR) and major real estate franchisors had conspired to inflate broker commission rates paid by homesellers.
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The plaintiffs’ attorneys for another, similar case filed in Chicago, known as Moehrl, filed the Umpa case in December. Now that the cases have been merged, they will continue under the Gibson banner and case number.
Judge Stephen R. Bough
In his order approving an April 19 motion to consolidate from the Gibson and Umpa plaintiffs, Bough said he found consolidation appropriate given that the two cases “involve common questions of law and fact, consolidation will conserve judicial resources and promote efficiency, and consolidation will not cause undue delay, confusion, or prejudice.”
None of the defendants opposed the motion to consolidate.
Bough also gave the plaintiffs leave to file a consolidated amended class action complaint, which they did on Tuesday.
“Plaintiffs, home sellers who listed homes on Multiple Listing Services in the United States (‘the MLS’), bring this action against the National Association of Realtors (‘NAR’) and several of the largest families of national real estate brokerages, brokerage owners, and franchisors in the United States (collectively, ‘Corporate Defendants’) for agreeing, combining and conspiring to impose, implement, follow and enforce anticompetitive restraints that cause home sellers to pay inflated commissions on the sale of their homes, in violation of federal antitrust law,” the 93-page complaint reads.
As in other, similar suits, the now-combined case targets NAR’s Participation Rule, also known as the cooperative compensation rule, which requires listing brokers to offer compensation to buyer brokers in order to submit a listing to a Realtor-affiliated MLS.
The consolidated complaint seeks class-action status and asks to represent the following class of millions of homesellers:
“All persons in the United States who, from December 27, 2019, through the present, used a listing broker affiliated with any Corporate Defendant in the sale of a home listed on an MLS, and who paid a commission to a cooperating broker in connection with the sale of the home.”
However, there are carveouts when it comes to the NAR, Keller Williams and the HomeServices defendants in the Sitzer | Burnett and Moehrl cases as well as a similar case filed against MLS PIN known as Nosalek. Sitzer | Burnett covers four MLS markets in Missouri, Moehrl covers 20 MLS markets nationwide and Nosalek only covers MLS PIN. Therefore, certain home sales in those markets that are already covered by those cases will not be covered in the Gibson class.
Michael Ketchmark
Michael Ketchmark, lead plaintiffs’ counsel in the Sitzer | Burnett case, told Inman that his team and the Moehrl attorneys had worked so closely together in the last two years that it made sense to “completely join forces” and make Gibson and Umpa a single case.
“We’re going to be coordinating discovery, coordinating all aspects of the preparation of both of the cases for trial; that’s what it means,” Ketchmark said. “It’s the uniting of the plaintiffs’ trial teams.”
The defendants in the now-expanded Gibson case are numerous, though some have announced proposed nationwide settlements with the plaintiffs, including Realty One Group and @properties, who filed settlement notices with the court on Tuesday.
The Gibson defendants now are:
- NAR (proposed settlement announced)
- Berkshire Hathaway Energy
- HomeServices of America
- BHH Affiliates
- HSF Affiliates
- The Long & Foster Companies
- Compass (proposed settlement announced)
- Keller Williams (proposed settlement announced)
- eXp World Holdings
- eXp Realty
- Redfin
- Weichert Realtors
- United Real Estate
- Douglas Elliman
- Douglas Elliman Realty
- Hanna Holdings Inc.
- At World Properties (proposed settlement announced)
- The Real Brokerage
- Real Broker
- Realty One Group (proposed settlement announced)
- HomeSmart International
- Engel & Völkers
- Engel & Völkers Americas
- NextHome
- EXIT Realty Corp.
- Windermere Real Estate Services Company
- Lyon Real Estate
- William Raveis Real Estate
- John L. Scott Real Estate Affiliates
- The Keyes Company
- Illustrated Properties
- Parkers Pilkerton Village Real Estate
- Crye-Leike Real Estate Services
- Baird & Warner Real Estate
- Real Estate One Family of Companies
- Lokation Real Estate
According to Ketchmark, any brokerages that do not either join in the National Association of Realtors’ settlement agreement, which includes a mechanism for large brokerages to opt in, or negotiate a separate settlement with the plaintiffs, “will find themselves as defendants.”
Read the plaintiffs’ amended consolidated class action complaint: