Appeals court upholds settlements in Sitzer/Burnett
The judges rejected each of the arguments made by the seven appellants, allowing the combined $876M in deals reached by NAR and major brokerages to stand.
One of the most consequential nationwide court settlements in real estate history has been affirmed by the Eighth Circuit Court of Appeals.
More than seven months after hearing the final arguments from appellants in the Sitzer/Burnett commissions case, a panel of three judges ruled on August 19 to keep the settlement agreements in place.
The appeal was originally filed in late 2024 in an effort to get the deals reached by the National Association of Realtors, Anywhere Real Estate, REMAX, HomeServices of America and Keller Williams thrown out. The combined settlements totaled more than $876 million, with NAR's $418 deal encompassing hundreds of MLSs and Realtor associations as well as thousands of smaller brokerage firms and member agents.
How we got here: The Sitzer/Burnett case went to trial in October 2023, where the jury sided with the homeseller plaintiffs and awarded nearly $1.8 billion in damages. NAR and the brokerage defendants ultimately settled with the plaintiffs and agreed to implement industrywide changes related to commissions and buyer agreements.
Those settlements were approved by a U.S. district court, which issued a final judgment in January 2025, but seven parties sought to appeal the case on multiple grounds. The objectors to the settlement included plaintiffs in related commissions cases and law professor Tanya Monestier.
What the judges had to say: In a lengthy ruling, the panel dismissed each argument presented by the appealing parties.
Monestier, a vocal critic of the settlements, had made several arguments, including that the damages were insufficient and the settlement would not ultimately help consumers. One of the key issues in the appeal, however, was her assertion that the named plaintiffs did not have standing to seek injunctive relief because they could not show the necessary harm.
In disagreeing with Monestier, the judges said the evidence "reflects an ongoing, continuous injury" for the homeseller plaintiffs and the class.
Monestier declined a request to comment.
Another group had argued against including the Real Estate Board of New York (REBNY) in the settlement because it is not tied to NAR. The court dismissed that argument, noting that the claims in the REBNY case were similar to the Missouri seller claims that justified the nationwide class.
The court also rejected arguments that homebuyers should not be covered by the settlements, noting that "several named plaintiffs both bought and sold homes during the class period" and the settlement language was broad enough to encompass those claims.
Another appellant had objected to brokerage defendant franchisees being released from claims. The judges said that although the franchisees did not directly pay into the settlement fund, they are subject to its terms and releasing them from further claims "was proper."
The appeals court also addressed an issue that sparked some controversy prior to the final settlement approval hearing in Nov. 2024. District Court Judge Stephen Bough told objectors that they must appear in person at the fairness hearing if they wanted their arguments to be considered. Several objectors balked at the requirement, citing various hardships, but the Eighth Circuit judges concluded that the district court "committed no error" in enforcing that requirement.
Sitzer/Burnett plaintiffs, NAR praise the decision: Hagens Berman, the lead law firm representing the plaintiffs in the case, called the decision a "victory for consumers" in a statement posted on its website today.
"We are pleased this monumental change to the real estate system has been upheld," said Steve Berman, the firm's managing partner and co-founder. "This case shows the power of class actions to return real benefits to everyday people, and to correct systemic harm to consumers."
A spokesperson for the National Association of Realtors said the trade group was "pleased with the Court's order," adding, "We will continue to work to foster fair, transparent, and pro-consumer real estate markets while providing resources and value to our Realtor members nationwide."