Judges Deny Lawsuit Consolidation Effort, Leaving Commission Cases Scattered

Citing the recent National Association of REALTORS® (NAR) settlement agreement, a panel of six judges today denied an attempt by plaintiffs in commission-focused class-action lawsuits to consolidate all the copycat cases under one judge, saying that the “procedural posture of the litigation” makes that effort inappropriate.

“After settlement proceedings conclude, and it becomes evident how many claims and parties still remain and the extent to which they overlap, if at all, it may be that formal centralization is needed or, perhaps, informal coordination efforts can adequately address any duplicative pretrial proceedings,” wrote Judge Karen Caldwell, chair of the Judicial Panel on Multidistrict Litigation (MDL), in a four-page opinion.

The ruling leaves the 20-something Burnett copycat cases filed all over the country to proceed under different judges, schedules and procedures—a scenario that will almost certainly turn out to be a mixed bag for the real estate industry at large, as different brokerages continue to litigate claims all across the country filed by recent homebuyers and sellers alleging that real estate rules violated antitrust laws.

Caldwell notes that both defendants and plaintiffs disagreed on nearly every part of the consolidation effort, with some even switching their position after a hearing late last month, in which the MDL heard oral arguments from nearly a dozen entities involved in the lawsuits.

Those flip-flops, along with the NAR settlement, appear to have pushed the MDL to stay out of real estate commission litigation for now, with Caldwell further pointing out that brokerages left out of the NAR agreement might still opt in, making the choice to consolidate (and where to do so) even more uncertain.

“Given the broad contours of this new settlement agreement and the changing landscape of the parties’ positions on centralization, we think it wise to deny centralization at this time. The (NAR) settlement may well resolve at least some claims in this litigation, if not many. We cannot speculate on the number of parties and claims that will remain once this and any other settlements are approved,” she wrote.

Initially filed by the same plaintiffs behind Burnett back in December, the effort to consolidate commission cases appeared to be a straightforward one, with NAR supporting centralization of cases as well (though it was later forced to withdraw its participation in the MDL proceedings by the settlement agreement).

Other brokerages large and small also weighed in, with many taking no position and others targeting specific districts based on geographical convenience and other factors.

The MDL also considered whether to include buyer and seller cases together, along with what Caldwell refers to as “tag-along” cases—those not involving NAR or NAR-affiliated entities.

Exactly what effect consolidation would have had on the outcome of all these disparate lawsuits remains unclear—and could remain a mystery, although Caldwell made it clear that circumstances could change in the future, and was explicit that the panel was denying the consolidation effort on technical grounds rather than on its merits.

“We deny this motion based on the procedural posture of the litigation and, therefore, do not reach the issue of whether centralization would otherwise be appropriate here if these settlements had not been reached,” she wrote.

This is a developing story. Stay tuned to RISMedia for updates.


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