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Commissions cases: The next 90 days could change everything 

Three key decisions, including the Sitzer/Burnett judgment, are expected this spring — and they could determine what happens next for the industry.

March 14, 2024
3 minutes

Key points:

  • A judgment in the Sitzer/Burnett case, expected in April, could be especially critical in determining how buyer agent compensation is handled going forward.
  • Judge Stephen Bough could throw out the verdict — or triple the damages. He could also issue an injunction with statewide or national implications.
  • Other major developments include hearings on consolidation, scheduled for late March, and finalization of settlement agreements in early May.

With so many commissions lawsuits proceeding on different timelines, it can be hard to know which milestones matter. But the next 90 days are going to be crucial in determining what changes could be coming to the real estate industry.

Ed Zorn, vice president and general counsel for California Regional MLS, shared his thoughts on what to expect over the next three months during a compensation discussion hosted by T3 Sixty CEO Jack Miller. (Note: T3 Sixty and Real Estate News share a founder, Stefan Swanepoel.)

Here are three big developments real estate professionals should be watching for this spring.

Judgment time is coming for Sitzer/Burnett

Perhaps the most impactful decision in the coming three months will be Judge Stephen Bough's judgment regarding the Sitzer/Burnett case. The jury awarded a $1.8 billion verdict to the home sellers of Missouri on Oct. 31, but the case is still going through post-trial motions. Zorn expects the judge to make his final rulings around the end of April.

Zorn noted that the judge can go in many directions, from throwing out the verdict to tripling the award, pushing it to more than $5 billion, which is allowed under federal antitrust laws. If the remaining defendants — HomeServices of America and the National Association of Realtors — are required to pay damages, Judge Bough will also set a bond amount should they decide to appeal. NAR has vowed to appeal, and HomeServices has asked the Supreme Court to reject the verdict.

Judge Bough could also order an injunction to end existing buyer compensation practices, either within the state of Missouri, where the case was heard, or on a national level.

"That does definitely present challenges no matter what comes out of the court," Zorn said.

Consolidation arguments to be heard later this month

Another major decision that could determine the direction of litigation revolves around various consolidation proposals.

The Judicial Panel of Multidistrict Litigation will hear oral arguments on this topic March 28. Attorneys in the Gibson and Umpa cases proposed merging nine of the cases (and holding that combined case in Missouri), while NAR has argued for the consolidation of all the nearly two dozen copycat lawsuits. And in response to the original brief, defendants have proposed other actions, such as merging just the Texas lawsuits and moving any consolidated suit to another state.

Zorn said the judges will be looking at whether the cases are similar enough to be merged and whether consolidation is reasonable and fair. An advantage of merging the lawsuits, said Zorn, is that it could be more efficient and less costly to have a single case tried before a judge, and it could increase the likelihood of a settlement.

"That kind of group [in one courtroom] helps foster communication, so that's another element," Zorn said.

Existing settlements will be finalized

In early May, the settlements between home sellers and Anywhere, RE/MAX and Keller Williams are expected to be finalized, allowing those firms to move forward without the weight of litigation on their shoulders. 

That comes at a price, though, with the settlements agreed to by the three brokerages totalling around $208.5 million — and they don't cover the cases brought by homebuyers, including the two Batton cases in Illinois.

Zorn said it's important to keep in mind that these settlements address what happened in the past. Compensation rules still haven't changed, so it's unclear what that means going forward.

"So there's some aspects there where [the settlements] are very beneficial… are they all out of the woods with no liability at all, ever? It's debatable," Zorn said.

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