- Originally published at Inman News - Lillian Dickerson
The court has granted plaintiffs’ motion for preliminary approval of settlements proffered by Compass, The Real Brokerage, Realty One Group, At World Properties and Douglas Elliman in the Gibson commission lawsuit.
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In the antitrust commission lawsuit known as Gibson, the court has granted the plaintiffs’ motion for preliminary approval of settlements proffered by several major firms involved in the suit, including Compass, The Real Brokerage, Realty One Group, At World Properties and Douglas Elliman, according to a court filing submitted on Tuesday.
The court found the specified brokerage firms’ proposed settlements “fair, reasonable and adequate,” court documents stated, positioning the firms one step closer to finalizing their lawsuit settlements.
Preliminary approval of the settlements is still subject to approval at a final hearing, however, which will take place no later than Nov. 26, 2024, the date for the final approval hearing of the National Association of Realtors’ proposed settlement in the Burnett case, the court filing specified.
If the court approves the settlements at a final hearing, Compass can expect to pay $57.5 million, Real can expect to pay $9.25 million, Douglas Elliman can expect to pay up to $17.75 million, and Realty One Group and At World Properties will pay the undisclosed amounts that they put forth in their proposed settlements made in roughly the last week.
The firms would also have to make substantial changes to their business practices, especially surrounding buyer-broker compensation, which were laid out in their proposed settlements.
Compass and Douglas Elliman declined to comment on the preliminary approval. Real Brokerage and Realty One Group did not immediately respond to requests for comment. At World Properties (which owns @properties and Christie’s International Real Estate) pointed to comments the firm made when it announced its settlement last week.
Said @properties and Christie’s International Real Estate co-CEO Mike Golden at that time, “Settling these claims today allows us to move beyond a very costly litigation process and focus our full time, energy and resources on what matters most: our agents, affiliate brokerages, staff and clients.”
In the shorter term, the preliminary approval means that Compass will deposit 50 percent, or $28.75 million, of its proposed settlement amount into a settlement fund within the next 30 business days, Elliman will pay $7.75 million into an escrow fund within the next 30 business days, and Real will deposit its full $9.25 million settlement amount into a settlement fund within the next 30 days.
Since Realty One Group and At World Properties did not disclose their settlement figures, it is not known what they will be required to pay in the next month or so.
The two separate cases known as Gibson and Umpa were consolidated under Gibson on April 23. The lawsuit alleges that firms violated the Sherman Antitrust Act by enforcing rules requiring listing brokers to offer compensation to buyer brokers in order to submit a listing to a multiple listing service, which, they claimed, artificially inflated broker commissions.
Several brokerages named as defendants in the Gibson lawsuit have yet to publicly propose settlements, including eXp Realty, William Raveis, Engel & Völkers, Long & Foster and others.
Even if the Gibson case progresses smoothly from now until the final approval hearing, the U.S. Department of Justice could still reopen its investigation into NAR’s cooperative compensation rule, which it launched five years ago, and which could potentially complicate these settlements.
