Burnett v NAR et al
PART 3 of the Real Estate Commission Lawsuit. The Burnett Judgment and Damages Award.
1. Judgment – A quick recap on the judgment. On October 31, 2024, in Burnett v NAR et al, 8 jurors in Missouri found that NAR and major brokerages had conspired to inflate home prices by coupling buyer and seller commissions paid to agents.
2. Judgment was for the amount of $1.8 billion The judgment amount is expected to increase to $5.4 billion (triple damages) plus costs, reasonable legal fees and interest at rate of 5.4%.
3. Ratification – the judgment is still to be ratified by the court. It could be reduced.
4. Appealed – Home Services has appealed the judgment, the amount of the judgment and has presented a number of motions to dismiss the case. It’s not looking good.
5. Copycat Lawsuits – the judgment immediately sparked off a flurry of copycat lawsuit filings. All asked for class action status and effectively represent all home sellers in the US over the past four years. Plaintiffs are asking for hundreds of billions of dollars.
6. Appeal – The size of the judgment makes it almost impossible for a defendant to appeal the judgment. This is because the court will require security or a surety bond for the full amount of the award, some $5.4 billion.
7. Just like Trump – remember the difficulty ex-President Trump had getting a surety bond for his NY court case. Same problem here. Who has $5 billion in cash lying around. No bond, no appeal. The court could reduce the bond amount.
8. Settlements – all the defendants, except Home Services, entered into settlement agreements with the plaintiffs. The settlement agreements still need to be approved by the court. Many parties, including the DOJ, have objected to the settlement proposals.
9. NAR’s Settlement – the big settlement, for $412 million, paid over 4-years, has been proposed by NAR (although not yet filed or approved). The settlement will provide blanket immunity to a large number of MLSs, Associations, Brokerages and Realtors.
10. Not Everyone Covered – the proposed settlement doesn’t cover the large brokerages that have settled, Home Services and a number of brokerages that did more than $2 billion in transactions in 2022. It may cover agents of those brokerages. It’s complicated.
11. What it all means – we won’t have clarity before mid-summer about the ratification of the settlement agreements. The target is July. NAR has proposed that the MLS will adopt their listing rules to prohibit the offering of buyer co-op commission on the MLS by July.
12. What We Don’t Know – we still don’t know if the settlements will be ratified by the courts or if the terms will be amended following objections from the DOJ and other interested parties. We just need to wait. But don’t wait to amend your buyer co-op policy.
