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Illustration by Lanette Behiry/Real Estate News

Judge says Sitzer/Burnett will remain a class action 

HomeServices of America’s decertification request was denied, and the case will now shift to other post-verdict motions, including a request for a new trial.

March 26, 2024
2 minutes

The judge in the Sitzer/Burnett lawsuit has denied a motion from HomeServices of America, the only remaining defendant, to decertify the class action component of the case.

In court documents filed March 26, Judge Stephen Bough wrote that the plaintiffs had met the four prerequisites to qualify the case as a class action.

One area in dispute was whether the testimony of economic expert Craig Schulman provided proof of classwide injury. Schulman, an associate professor at Texas A&M and the director of Berkeley Research Group, testified that the commission fee structure contributes to inflated prices, and the system of both listing and buyer agents receiving a percentage of the home sale price goes against the idea of a competitive marketplace.

Schulman told the jury in October it was "one of the clearest cases" of collusion and price fixing he had ever seen.

"Through careful analysis, Dr. Schulman explained that commission rates were uniformly high because of the cooperative compensation rule, without which a seller would not pay the commission of the buyer's broker," Bough wrote in documents denying the decertification.

Bough also agreed with Schulman's damages model, echoing the plaintiffs' contention that he "was able to calculate the specific amount of damages for each class home sale transaction."

In denying the motion, Bough also canceled a request for an oral argument on the topic.

Where things stand: HomeServices is the only defendant yet to reach a settlement with the plaintiffs in this lawsuit. RE/MAX and Anywhere Real Estate reached settlement agreements prior to the October trial, while the National Association of Realtors and Keller Williams settled after the verdict was rendered.

As the lone defendant, HomeServices could be on the hook for all remaining damages, which total in the billions. In a motion filed on Mar. 18, the plaintiffs requested $4.7 billion in damages from the brokerage.

What's next: Chris Kelly, vice president at HomeServices of America, said in an email that the company is now focused on the remaining motions before the court, including one requesting a new trial and a motion for judgment as a matter of law. HomeServices has until April 23 to file reply briefs on those motions.

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