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Calls are growing to overturn a nationwide settlement ultimately approved by a district court to resolve antitrust claims against major real estate franchisees Anywhere, Keller Williams and RE/MAX.
On July 1, the law firm Knie and Shealy, which represented South Carolina home sellers in a retainer lawsuit filed in November, filed a notice of appeal in the U.S. District Court for the Western District of Missouri. The notice informed the court that the company’s clients – home sellers Benny D. Cheatham, Robert Douglass, Douglas Fender and Dena Fender – would seek to overturn the decision approved by Judge Stephen R. Bough with the U.S. Court of Appeals for the Eighth Circuit. day.
The three franchisees’ settlement covers claims in the case known as Sitzer | Burnett, Moehrl and Nosalek and other similar home seller packages across the country. The lawsuit alleges that some provisions of the NAR violate the Sherman Antitrust Act by driving up costs for sellers.
So far, the home sellers’ legal filings on the appeal don’t contain any arguments, but early legal filings offer clues. On April 12, the home sellers objected to the final approval of the franchisee settlement agreement, arguing that it went far beyond the scope of the original litigation that led to the deal.
“this More and Sitz/Burnett The category initially received certification from a total of 24 Multiple Listing Services (MLS),” the filing reads.
“This settlement seeks to expand such certification to more than 600 MLSs across the country. This is despite the fact that real estate is inherently local. Many of these 600 MLSs operate and enforce rules differently than other MLSs, even within the same state. within, let alone across the country.
“It is also easy to conflate the illegal activities conducted by these MLSs with the means by which they are accomplished. These MLSs may use many of the same rules, but often enforce them in different ways. Participants in these MLSs take advantage of the The rules involve fixing commission prices, which is an actual illegal activity, although they may use similar tools to do this.
South Carolina Home Sellers also said the settlement amount for the three franchisees, totaling $208.5 million, “is too low to adequately compensate the large number of injured parties here.” Documents highlight that plaintiffs in the Moehrl and Sitzer cases | Nate’s case should not impede the ability of other absent class members to have their own cases heard.
“The plaintiffs in these cases sacrificed the rights of citizens of other states to ensure that their cases were resolved, that their clients received cooperation at trial, and that their own trial fees and expenses were paid,” the filing reads.
“They did not make even the most rudimentary discovery of this conspiracy in other states because they could not. However, they believed that $208,500,000 was sufficient to expose all absent class members to completely different circumstances and completely different conspiracy circumstances. .
Home sellers also object to deals that exempt franchisees from liability without requiring them to pay anything to those they allegedly harm or change their practices.
“To be effective, these settlement agreements should mandate these practice changes as a condition of franchise ownership and franchisees would face revocation of their franchises if they are not followed,” the filing reads.
“Another option would be to enact an injunction prohibiting sellers from providing indemnification to buyer’s brokers. This alternative was proposed by the Department of Justice in its Statement of U.S. Interests in Nosalek. This would prevent price-fixing practices that are actually illegal. activity) occurs again.
“Antitrust laws are designed to deter bad actors,” the filing added. “Here, by requiring franchisees to neither pay nor change, it is unclear how these settlements further the purposes of antitrust laws.”
Finally, home sellers protested that the deals were only valid for five years.
“Given these defendants’ decades-long practice of fixing commissions on both sides of the sale and their high profits, five years is simply not enough time to almost guarantee that the practice will be resumed in secret unless the practice is expressly prohibited,” the document reads. for quite some time.
“The history of this industry shows a hopeless preference for fixed commissions.”
Those objections echo those of another home seller, who appealed the final approval of the settlement three weeks ago. One homebuyer also appealed the ruling.
“Since the October 2023 settlement, RE/MAX, LLC has been working to obtain final court approval to exempt all U.S. RE/MAX brokers/owners and affiliates from Burnett (formerly Sitzer), Moehrl and Nosalek claims in the case,” a RE/MAX spokesperson told Inman in a statement.
“RE/MAX, LLC is pleased that the District Court received final approval in May. That said, appeals of this order are neither unusual nor unexpected, and RE/MAX, LLC will continue to vigorously defend the Settlement Agreement during the appeals process. Ultimately , the company believes the settlement is fair and reasonable and the district court’s order should be upheld.
Michael Ketchmark of Ketchmark & McCreight, the lead plaintiff’s attorney in the Sitzer case | Burnett expressed optimism that the appeals court will reject challenges to the deal.
“We have reviewed the appeal and there are no surprises,” Ketchmark told Inman in a statement.
“We hope to win all appeals. The settlements will remain. Change is finally here.
Keller Williams declined to comment for this story. Anywhere did not respond to a request for comment.
The appeal could delay implementation of the settlement, in which Anywhere, RE/MAX and Keller Williams agreed to pay $83.5 million, $55 million and $70 million respectively. No one in the settlement class who filed a claim will receive a payment until any appeal is resolved.
Franchisors are also not required to implement changes to their agreed business practices until the appeals process is concluded and a settlement becomes effective. The changes include no longer requiring franchisees and their affiliated agents to join or be members of the National Association of Realtors or to comply with the REALTORS Code of Ethics or NAR’s Multiple Listing Service Policy Manual.
Editor’s note: This article has been updated with comments from Michael Ketchmark.
Send an email to Andrea V. Brambila.
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