Motions to dismiss and motions to strike in Gibson v. NAR by several defendants were denied by Judge Stephen R. Bough yesterday, ensuring the high-profile commission lawsuit will continue (at least for now) against several large brokerages—and one $25 billion-dollar holding company.
eXp, William Raveis, Howard Hanna, Weichert, Real Estate One, Crye-Leike, Illustrated Properties, Windermere and Berkshire Hathaway Energy are among the defendants who filed various motions to dismiss. These names and others who filed are among the list of defendants who have either not settled yet, or whose settlements have yet to be approved.
Specifically, eXp, William Raveis, Howard Hanna, Weichert, Berkshire Hathaway Energy, Real Estate One, Crye-Leike, Illustrated Properties and Windermere all filed motions in regard to the lawsuit’s claims, jurisdiction or venue. Howard Hanna also filed a motion to dismiss that offered the alternative to move the case to Pennsylvania, which was denied as well. Several defendants also filed multiple motions to strike class allegations as to arbitrating class members in order to enforce arbitration or class-action waiver provisions, based on clauses including in listing agreements.
Bough’s reasoning for the denials were vast, spanning a 19-page filing and citing many legal precedents.
In terms of jurisdiction and venue, defendants had specifically asked the court to take a different interpretation of federal antitrust law in order to support their motion. Bough, in turn, explained that the plaintiffs have presented evidence that each defendant operates in Western Missouri and it is a proper venue, giving the plaintiffs and court jurisdiction.
“The Court need not adopt an interpretation of (the relevant statute) because the venue is proper and this Court has personal jurisdiction over Defendants in accordance with both the broad and narrow reading,” the filing states.
In terms of the motions to dismiss based on the lawsuit’s claims, defendants argued that plaintiffs “have not plausibly pled any agreement or conspiracy exists.” Bough denied this, stating that the “plaintiffs’ assertion that Defendants agreed to carry out NAR’s allegedly anticompetitive policies is adequately supported by factual allegations regarding both the substance and nature of their purported agreement.”
“Plaintiffs present facts showing the terms and effects of the alleged horizontal agreement and the methods allegedly used by Defendants to uphold and perpetuate it,” Bough continued in the filing. “In turn, Plaintiffs’ allegations plausibly suggest the franchisees, subsidiaries, and agents of each Defendant knew of, complied with, participated in, and benefitted from the Challenged Rules.”
Those “Challenged Rules” are the same ones that have been at the center of most commission lawsuits—most notably, the rule requiring offers of buyer compensation on the MLS, which has since been repealed. Bough also denied all motions to strike, stating that the defendants cannot enforce the arbitration agreements or class-action waivers.
The Gibson case is the original Burnett copycat, filed almost immediately following the verdict in the aforementioned case. It was consolidated with another copycat, Umpa, in April this year. Nine of the defendants have settled in the case—Compass, Redfin, The Real Brokerage, At World Properties, Douglas Elliman, Engel & Völkers, Realty ONE Group, HomeSmart and United Real Estate.
Plaintiffs in the case later added Berkshire Hathaway Energy, a subsidiary of Warren Buffett’s Berkshire Hathaway empire that owns HomeServices of America, attempting to hold the deep-pocketed conglomerate liable for the rules and policies of its real estate companies. Bough’s ruling will allow those claims to go forward at least for now, at a relatively early stage of the lawsuit.
Notably, HomeServices’ $250 million settlement payment, which the company agreed to back in April, includes no contributions from Berkshire Hathaway Energy or other parents, something HomeServices said was a key stipulation of the deal.
eXp and Weichert have also negotiated settlements for their commission lawsuits, but these were negotiated in the smaller case of 1925 Hooper v. NAR and have since been objected to by plaintiffs. Judge Bough denied both companies’ request for a pause in the Gibson case in relation to their settlements, ruling that proceedings would continue.
When asked for comment, a representative from eXp stated they “cannot comment on ongoing litigation, but remain focused on securing approval of our settlement of the seller-side commission cases.” Other defendants did not respond to requests for comment at press time.
