Commissions settlement objectors request new appeal hearing 

After more than five years of litigation, a jury trial, settlements totaling more than $1 billion and an appeal that affirmed those deals, the homeseller commissions lawsuits are still not quite wrapped.

Two of the appellants in the Sitzer/Burnett and Gibson cases are asking the court to take another look at their arguments after a three-judge panel with the Eighth Circuit Court of Appeals recently upheld the settlements in the landmark commissions cases.

Monty March, who sued the Real Estate Board of New York (REBNY) and more than two dozen brokerage companies in 2023, and Robert Friedman, who filed a similar lawsuit against REBNY and many of the same brokerages in early 2024, were two of several objectors to appeal the settlements and have both filed petitions for a rehearing with the Eighth Circuit.

Different conspiracies: The two original lawsuits alleged that the defendants conspired to not compete over commissions in New York City, resulting in inflated agent fees. March's complaint focused on his Manhattan home sale while Friedman cited his Brooklyn home sale. 

In their appeals, the homeowners argued that the alleged REBNY conspiracy and those involving the National Association of Realtors in Gibson and Sitzer/Burnett were distinct and unrelated, and REBNY should thus face its own trial.

They also claimed that the REBNY conspiracy was unique because the association, which is not affiliated with NAR, required individual agents and brokers to agree to its own rules and code of ethics, which he argued are more anticompetitive than NAR's rules.

In upholding the settlements, the appeals court judges disagreed, concluding that the REBNY claims were largely similar to the Missouri seller claims.

What the court got wrong: Both Friedman's and March's rehearing requests, filed Sept. 1 and 2, respectively, assert that the appeals court used the wrong legal standard and should have reviewed their objections with fresh eyes instead of deferring to the lower court's ruling. 

More importantly, they argued that REBNY shouldn't have been pulled into a settlement that centered around NAR rules, with Friedman stating that "the REBNY claims have absolutely nothing to do with the Burnett/Gibson litigations" and "were merely an afterthought shimmied into the Missouri settlement after the trial verdict was entered in October 2023."

March's filing concurred: "From the single paragraph in the [appeals] Panel's decision, it does not appear that the Court reviewed or considered these facts which make patently clear that REBNY is completely distinguishable from NAR."

If the appeals court agrees to rehear the case and rules in the appellants' favor, REBNY claims could be pulled out of the NAR deal and litigated separately in New York.

What NAR had to say: In response to the filing, a spokesperson for NAR said the association "believes the 8th Circuit Court of Appeals made the correct decision to affirm the settlement approval. We will respond to this petition through the appropriate legal process and continue to work to foster fair, transparent, and pro-consumer real estate markets while providing resources and value to our REALTOR members nationwide."

Special master can stay: Also in Sitzer/Burnett, District Court Judge Stephen Bough ruled last week that one of the special masters assigned to oversee the distribution of settlement funds could retain his position. Bough had appointed two special masters in July to "facilitate the fair administration of settlement to the class" and to help class members "understand the cost of the services charged to the class for notice, claims review, and settlement distribution."

JND Legal Administration, the company tasked with the actual distribution of funds, objected to the appointment of Chris Hellums as one of the special masters, claiming that Hellums had previously expressed bias against the firm and should be recused. Bough disagreed, stating that JND, a non-party to the case, had no basis to request recusal, and that their accusations "lack factual basis."