With just shy of $1 billion in a still-growing settlement fund, lawyers who worked on the Burnett case are renewing their bid to have a judge approve one-third of the amount paid by HomeServices of America and the National Association of REALTORS® (NAR) as their fee, with an additional $16 million to cover out-of-pocket expenses.
In a filing last Friday, lawyers associated with six different firms wrote to Judge Stephen R. Bough that the total amount of “proposed” settlement payments now stands at $998.4 million, with $679.3 million from NAR and HomeServices designated as “non-reversionary,” meaning they cannot be returned to those defendants. The lawyers are requesting one-third of that $679.3 million, but also seeking the same proportion of additional amounts paid or approved.
“This was among the riskiest litigation Class Counsel have ever prosecuted, due to the possibility of no recovery, the scale of the litigation, the deeply embedded nature of the practices and issue and the investment of time and money required to pursue the litigation and reach settlements or other judgment against well-resourced defendants,” the lawyers wrote. “In sum, the extraordinary level of work and result achieved here in the face of enormous risk warrants a substantial fee percentage.”
Plaintiffs’ lawyers in the Burnett case previously filed a request for one-third of the settlement amount back in February, when the total amount paid by real estate entities was $206 million, which was eventually approved by Bough when settlements struck by Anywhere, RE/MAX and Keller WIlliams were approved back in May.
The filing also revealed that MLSs and brokerages that have opted into the settlement have paid a total of $11.3 million on top of the $418 million NAR has agreed to dole out. The lawyers wrote that they expect this amount to “grow modestly.”
As agents and brokers have absorbed all the upheaval caused by the avalanche of lawsuits and practice changes that were sparked by the Burnett verdict almost a year ago, many have continued to express anger at the attorneys who led the plaintiffs in the Burnett case (and who also filed a national copycat case, in which half a dozen more brokerages have agreed to settlements), characterizing the lawsuits as a cash grab.
The fee requested now by plaintiffs attorneys in dollars is $226.4 million, split among about 130 people who worked on the case. That comes to about $1.7 million per person. The lawyers claimed that their expenses, combined with the “lodestar” of unpaid hours committed to the case, add up to about $104 million.
That is more than $10 million higher than the amount detailed back in February, when the attorneys first put forward their request for fees, as lawyers involved in the case claim they have continued to dedicate significant time and resources to litigation even as all defendants have settled.
In his individual declaration, Ketchmark, who led the plaintiffs in the Burnett trial and has since become a significant presence in the media, said he has dedicated an additional 670 hours to the case since February, for which he would have normally billed about $974,000.
Members of the real estate community have also pointed to the request for one-third, which is “customary” for class-action attorney fees (according to citations in the filing) as hypocritical due to plaintiffs’ allegations that real estate commission rates are standardized or fixed.
In the filing, plaintiffs lawyers point out that a percent-based fee is aligned with the interest of consumers, as members of the settlement class will continue to benefit and counsel is motivated to pursue more settlements even after obtaining substantial compensation.
With millions of homesellers affected by the alleged misconduct detailed in the lawsuits and eligible for payments from the settlement fund, checks that will eventually go out to consumers are likely to be relatively small. A lawyer representing a group of class members who objected to the settlements back in May claimed that most recent homesellers who were allegedly harmed will receive between $5 and $10, though it was unclear how he arrived at that number.
Expert witnesses utilized by the plaintiffs in the Burnett case estimated that homesellers in that region, compromising five MLSs in Missouri, overpaid by about $7,000 each based on the anti-competitive effect of rules created by NAR.
