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It is a common assumption in the real estate industry that consumers will receive a pittance from multiple settlements to resolve antitrust claims brought by homesellers.
Now, at least some of the homesellers in the Gibson commission lawsuit appear to agree.
Seven of the numerous homesellers in the Gibson class-action suit filed objections on Oct. 3 in the U.S. District Court for the Western District of Missouri to the dollar value of the proposed settlements, which cap out at $110.6 million. The objections to the deals in the Gibson suit, which was filed nearly a year ago, were submitted in advance of a final approval hearing for the deals later this month, on Oct. 31. The settlements in question are those reached with:
- Compass: $57.5 million
- The Real Brokerage: $9.25 million
- Realty ONE Group: $5 million
- At World Properties: $6.5 million
- Douglas Elliman: $7.75 million
- Redfin: $9.25 million
- Engel & Volkers: $6.9 million
- HomeSmart Holdings: $4.7 million
- United Real Estate: $3.75 million
“[T]he settlements are inadequate based on the size of the national class,” one filing states. “There appears to be no rational bases for the settlement amounts which provide class members very small remuneration for the damages which they suffered.”
“Given the fact that it appears the class exceeds thirty (30) million members, the total damage to the members is $4.371 Trillion Dollars, excluding trebling under the Sherman Anti-Trust Act and a separate award of attorneys’ fees,” the filing continues.
The objection was filed by law firm Knie and Shealy on behalf of homesellers Benny D. Cheatham, Robert Douglass, Douglas Fender and Dena Fender. At least three others filed objections independently to the law firm, which also represents South Carolina homesellers in a commission suit filed in November.
These homesellers also objected to similar settlements reached with Keller Williams, Anywhere and RE/MAX and have appealed their final approval to the 8th U.S. Circuit Court of Appeals.
The sellers also protest that the deals release Realtors whose annual sales volume is less than $2 billion per year without making them pay anything toward the settlement fund.
“The proposed settlement in no way binds local Realtors, Real Estate Boards, or MLSs because there is no exchange between the parties despite the fact that Plaintiffs’ Complaint is replete with examples of local entities taking an active part in price fixing activities complained of and the formulation of the rules by which price fixing was accomplished,” the filing reads.
“It is uncontroverted that these local entities in this case paid no money toward the monetary settlement. … These local entities must be held accountable.”
The objectors informed the court that they intended to send their counsel to the settlements’ fairness hearing at the end of the month.
On the same day, the same objectors asked the court for permission to subpoena financial records from the same nine companies in order to “determine the financial condition of Settling Defendants during the damage period” and also to “help provide the court with valuable evidence in ruling on whether to grant final approval of the proposed settlement entered into by and among Settling Defendants and the Plaintiffs.”
Another homeseller, Robert Friedman, also filed an objection with the court on Thursday against the deals reached with Compass, Douglas Elliman and Engel & Volkers. In December, Friedman filed a similar class-action suit against the companies and others in the Brooklyn, New York area. However, Friedman’s suit pertains to rules instituted by the Real Estate Board of New York (REBNY), not, as in the Gibson case, the National Association of Realtors.
“The alleged REBNY and NAR conspiracies are wholly distinct and unrelated,” the filing reads.
“Each involves entirely separate real estate associations, listing services, broker rules, and mechanisms through which the conspiracy was formed and maintained.”
“In the preliminary approval papers and settlement notice, the parties to the proposed settlements state their intent to release claims involving REBNY and the RLS,” the filing continues.
“There is, however, no factual or legal basis upon which to release Friedman’s or the REBNY Brooklyn Class’s claims. The Court should therefore reject the proposed settlements with Compass, Douglas Elliman, and E&V, and find that Friedman’s and the REBNY Brooklyn Class’s claims are not released.”
Monty March, another homeseller who filed a class-action suit against Compass, Douglas Elliman and E&V, as well as another Gibson defendant, At World Properties, also filed an objection on nearly identical grounds.
“The alleged REBNY and NAR agreements to fix, raise, maintain, or stabilize real estate commissions are distinct and factually unrelated,” the objection reads.
March’s filing also points to the alleged inadequacy of the deals’ terms.
“[T]he monetary compensation provided is too low and the practice changes mandated by the settlements agreements are too tepid to address the harms created by decades of supracompetitve real estate broker commissions,” the filing reads.
“[T]he monetary compensation itself that is provided by the three Settling Defendants is woefully inadequate to REBNY Manhattan Class members who likely suffered greater individual harm and injury compared to those affected by the NAR conspiracy. … [A]ny arguments that Defendants lack an ability to pay or that increasing settlement consideration would render settling Defendants in a precarious financial situation rings hollow.
“As this Court noted before, ‘. . . defendants here in this case obviously made huge profits.’ The settlement agreements before this Court also do not seek any consideration from franchises, despite the fact national brokerage franchises were key participants in the nationwide NAR conspiracy and New York based franchises participated in the REBNY agreement to inflate real estate broker commissions.”
Another homeseller, James Mullis, who is also a plaintiff in the Batton 1 and Davis buyer commission suits, filed an objection to all nine settlements with the intent of having buyer claims excluded from the deals.
“The Court should approve the settlements only if the settling parties expressly carve out homebuyer claims from the definition of ‘Released Claims’ or otherwise clarify that the settlements do not release damages claims related to transactions in which class members purchased homes,” the filing reads.
“If not, the Court should reject the settlements as unfair, unreasonable, lacking intraclass equity, and failing to adequately represent class members who purchased homes.”
Mullis, like the homesellers represented by Knie and Shealy, objected to and has filed an appeal against the Keller Williams, Anywhere and RE/MAX settlements. Mullis said his counsel intended to appear at the Oct. 31 hearing.
Also on Oct. 3, the Gibson plaintiffs and brokerages The Keyes Company and Illustrated Properties informed the court they had executed a settlement agreement that same day. The plaintiffs added that they were planning to file a motion for preliminary approval “that may include additional settlements” by Nov. 1. The filing did not include any settlement amount or terms.
English (US) · 