A judge has granted preliminary approval of the franchisers’ multi-million dollar settlements in Sitzer | Burnett, Moehrl and Nosalek. Final approval may happen next year.
As antitrust commission lawsuits continue ricocheting through the real estate industry, franchising giants Anywhere and RE/MAX both revealed Monday that their settlements in the cases have taken an important step toward becoming final.
In dual announcements, both companies revealed that their proposed settlements have received preliminary court approval. A court document, filed Monday, further states that Judge Stephen Bough found that the proposed settlements “are fair, reasonable and adequate,” as well as that they were negotiated fairly and “the class representatives have adequately represented the class.”
The approval triggers a “notice period to potential class members,” according to Anywhere’s statement. In other words, homesellers who fall into the classes covered by the lawsuits can now be notified about the settlements. The statement adds that final approval could happen sometime in the middle of next year.
The settlements cover three cases: Sitzer | Burnett, which went to trial last month and ended with a verdict in favor of the homeseller-plaintiffs; Moehrl, which is expected to go to trial next year; and Nosalek.
Anywhere’s settlements in Sitzer | Burnett and Moehrl came first, in September, and included the promise to pay $83.5 million in relief as well as make a variety of rule changes related to commissions and broker participation in the National Association of Realtors. RE/MAX announced its own similar settlements nearly two weeks later, agreeing to pay $55 million and adjust its business practices.
Both companies announced settlements in the Nosalek case in late October.
The newly granted preliminary approval means that the court found the dollar amounts and policy changes in the settlements satisfactory.
Executives from both companies expressed appreciation Monday that the settlements are moving forward.
“I am pleased the court has granted Anywhere preliminary approval of our nationwide settlement,” Anywhere CEO Ryan Schneider said in his company’s statement. “Our efforts to resolve these claims remove future uncertainty and legal expense for Anywhere, our franchisees, and affiliated agents as, together, we focus on serving home buyers and sellers as they move to what’s next.”
“We are pleased with the court’s decision to grant preliminary approval of the settlement,” RE/MAX President and CEO Nick Bailey noted in his firm’s statement. “This development signifies progress in our ongoing efforts and commitment to a resolution — it’s a positive step forward in bringing these cases closer to the finish line.”
Though the preliminary approval moves Anywhere and RE/MAX closer to a resolution, the broader antitrust commission lawsuit situation is far from resolved. In Sitzer | Burnett, which is the furthest along of the cases, NAR and the other franchisor-defendants have vowed to appeal October’s verdict. During NAR’s NXT conference last week, the trade organization’s attorneys argued that there are “very many grounds” to appeal.
NAR, Keller Williams and HomeServices of America have also hired a slew of new and high-profile attorneys to continue fighting the case.
At the same time, other cases, such as Moehrl, continue to inch toward trial even as new cases pop up. Those newer cases include Gibson, filed in Missouri immediately following the Sitzer | Burnett verdict, Burton in South Carolina, March in New York, and QJ Team in Texas.
Though the plaintiffs and defendants in these cases vary, they all generally take aim at the practice of having sellers’ agents offer a commission to buyers’ agents. The plaintiffs believe such a practice inflates costs for consumers, and that it’s the result of a conspiracy among real estate’s largest companies and organizations. NAR, various franchisers and others have vehemently denied such allegations, though in Sitzer | Burnett the jury ultimately rejected the industry’s explanations.
It remains to be seen what kind of impact these cases will have on the industry. Some have speculated that they could ultimately compress commissions or lead to a significant winnowing of Realtor ranks. On the other hand, numerous executives of large real estate companies recently downplayed the various lawsuits’ disruptive potential.
For now, though, Anywhere and RE/MAX have both touted the protective features their settlements provide to their agents.
“If the settlement is granted final approval by the Missouri court,” RE/MAX’s statement notes, echoing a similar comment from Anywhere, “all U.S. RE/MAX affiliates, including franchisees and agents, will be protected from claims connected to the lawsuits and any similar claims.”
Read the order granting preliminary approval of the settlements here:
Email Jim Dalrymple II