A federal judge on Tuesday preliminarily approved an agreement proposed by the National Association of Realtors to settle landmark antitrust lawsuits over broker commissions.
The order comes after the plaintiffs in the Missouri-based Sitzer/Burnett case filed a motion for preliminary approval on Friday, according to court documents and first reported by Inman. That filing set off a 60-day countdown for the large brokerages left out of the deal to opt into the settlement, or face the remaining legal action on their own.
The 1.4 million-member trade group in March announced the terms of the settlement, which include a $418 million payout to the plaintiffs. NAR also agreed to change several of its policies, including the commission-sharing rule targeted in the lawsuit.
The agreement releases the organization, the multiple listing services it controls and brokerages with transaction volumes under $2 billion from claims brought by home sellers nationwide.
More than 90 firms facing similar antitrust claims — including Redfin, @properties, Real Brokerage and the Agency — aren’t cleared by the settlement.
However, these larger brokerages can opt in to the agreement by paying the average of their total volume from 2020 to 2023 and multiplying it by 0.0025, which some have argued is prohibitively expensive.
The judge’s approval also triggered deadlines for payment and mediation. If firms do opt-in, the terms require them to deposit the requisite amount within 120 days of approval. For brokerages that can’t pay the amount determined by the formula, they now have 110 days to participate in non-binding mediation with the plaintiffs.
The approval also allows the plaintiffs to notify members of the class about the deal, including options to submit claims, object to the agreement or opt-out of it.
Several of the nation’s largest brokerages have already struck their own deals with the plaintiffs and are now waiting for the judge’s approval. Anywhere, RE/MAX and Keller Williams — all named as defendants in Sitzer/Burnett and another lawsuit known as Moehrl — agreed to settle before NAR’s deal was announced for a combined $209 million.
Compass set the stage for the post-settlement field of play when it agreed to pay $58 million to settle lawsuits, including those filed in Illinois, Missouri and New York, just a week after NAR announced its agreement.
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HomeServices of America is now the only defendant in the Sitzer/Burnett lawsuit facing a $1.8 billion jury verdict handed down in October.
Attorneys for the firm filed motions for a new trial and for the judge to enter his own judgment disregarding the jury’s decision, both of which are still pending.
Final briefings are due May 6th, and the brokerage will wait for a resolution on the motions before proceeding with a potential appeal, according to the firm’s spokesperson.