While August 17 was long marked on real estate practitioners’ calendars, another date may prove to be just as important—November 26, when a federal judge in Missouri will hear arguments and decide whether or not to issue final approval to the National Association of REALTORS®’ (NAR) lawsuit settlement. Ahead of that momentous, potentially uncertain decision, plaintiffs, defendants and objectors are filing their arguments, with some (but not all) of the players prepared to present in-person to Judge Stephen R. Bough next Tuesday.
Separately but simultaneously, two large brokerages who previously struck deals in commission lawsuits will have to defend the process by which these agreements were reached, with plaintiffs in the largest class-action suit claiming the brokerages engaged in “collusive” behavior to get a lower payment. And eXp Founder Glenn Sanford is seeking to prevent access to his phone by plaintiffs in a lawsuit alleging company recruiters sexually assault women at company events, citing privacy concerns.
Here is the latest from court cases affecting real estate:
eXp, Weichert ordered to engage in discovery over alleged ‘reverse auction’
While most settlement deals that brokerages have negotiated with class-action plaintiffs are coasting through the approval process relatively smoothly, two companies may have hit a major snag based on the process they used.
Both eXp and Weichert announced settlement agreements this month, but notably, they negotiated with plaintiffs in a smaller, relatively unremarkable Burnett copycat (known as Hooper) filed in Georgia in November 2023. When both companies asked for a pause in the largest copycat case (known as Gibson), lawyers behind that lawsuit objected, claiming the two companies used a so-called “reverse auction process” to get a better deal by negotiating with less experienced, less motivated plaintiffs.
Judge Stephen R. Bough, who is overseeing the Gibson case, agreed with the Gibson plaintiffs, ordering eXp and Weichert to allow himself and the Gibson lawyers to review communications and processes around the Hooper settlement. He also declined to pause the case for these two brokerages, meaning they will still have to litigate those claims as they submit to scrutiny of their settlements.
eXp has continued to defend its settlement and the process it used, saying it is confident the deal does not constitute a “reverse auction.”
NAR settlement hearing will take place in KC next week
On Tues., Nov. 26, lawyers and representatives for NAR will join a smattering of objectors in a Kansas City courthouse—the same building where a jury handed down a $1.8 billion verdict against the industry a little over a year ago—as Bough decides whether to give his final approval to a deal that sent shockwaves through real estate.
While a handful of companies have received final court approval from Bough for their deals, the NAR settlement is much further-reaching and affects every single REALTOR®, along with dozens of companies who have opted into the deal. Those who are seeking to prevent the deal from being certified—including plaintiffs in other commission-focused lawsuits, concerned REALTORS® and a law professor—have filed objections, though Bough has said they must attend the hearing in-person to have their arguments considered.
At least two of these parties have claimed this requirement is burdensome or not supported by law, and have asked Bough to allow them to speak virtually at the hearing. Bough had not ruled on these requests at press time.
A final approval of the settlement would serve as somewhat of a capstone on the commission lawsuit saga, even as some copycats, buyer-filed lawsuits and a Department of Justice investigation remain active.
Glenn Sanford asks court to block access to his cellphone
In one of two lawsuits over an alleged “scheme” by top eXp recruiters to sexually assault women at company events, which plaintiffs have claimed was well known to executives at the top of the company, founder and chairman Glenn Sanford is asking a federal judge to stop plaintiffs from searching his cellphone.
According to a filing last week, Sanford produced hundreds of pages of texts and other communications related to the alleged actions of Michael Bjorkman and David Golden, two former top eXp “alpha agents” who are accused of drugging and raping dozens of women over multiple years at recruitment events for eXp’s multi-level marketing model.
But Sanford is asking for a protective order to prevent plaintiffs from further searching his phone for relevant communications, citing “privacy interests.”
“Sanford’s cell phone contains personal and private information that is wholly unrelated to this litigation. Accordingly, taking a forensic image of Defendant Sanford’s cell phone is disproportionate to the needs of this case,” the filing argued.
Plaintiffs are seeking the more comprehensive search and were unable to resolve the dispute at a conference with Sanford’s lawyers earlier this month, according to the filing. Sanford has claimed that most of his work-related communications take place on other platforms, while admitting he regularly communicates about business on his personal cellphone.
A hearing to discuss the dispute is scheduled for December 3.
Buyer cases will name new plaintiffs, renew partial pause
Two loosely consolidated lawsuits—filed by homebuyers rather than sellers—are moving forward slowly, with plaintiffs saying they intend to update the claims based on certain state laws, and add new named plaintiffs to address potential jurisdictional objections from defendants.
According to a filing last week, plaintiffs and defendants are also still in agreement as to a partial pause to the case based on a judge’s ruling in seller-filed lawsuits, which granted partial immunity from buyer claims to companies who settled with sellers.
Those companies include Keller Williams, Anywhere, RE/MAX, Compass, The Real Brokerage, Realty ONE Group, At World Properties (the parent company of @properties Christie’s International Real Estate), Douglas Elliman, Redfin, Engel & Völkers, United Real Estate and HomeSmart.
Plaintiffs in the buyer case are currently appealing the immunity ruling.
