Commissions settlement objector requests 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.

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

Robert Friedman, who sued the Real Estate Board of New York (REBNY) and more than a dozen brokerage companies in early 2024, was one of several objectors to appeal the settlements and has now filed a petition for a rehearing with the Eighth Circuit. 

Different conspiracies: Friedman's original lawsuit alleged that the defendants conspired to not compete over commissions in pricey Brooklyn neighborhoods, resulting in inflated agent fees. In his appeals, Friedman 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.

Friedman 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: Friedman's Sept. 2 rehearing request asserts that the appeals court used the wrong legal standard and should have reviewed his objections with fresh eyes instead of deferring to the lower court's ruling. 

More importantly, he said REBNY shouldn't have been pulled into a settlement that centered around NAR rules since "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."

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

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."