Editor’s note: The COURT REPORT is RISMedia’s weekly look at current and upcoming lawsuits, investigations and other legal developments around real estate.
With autumn arriving and the dog days of summer in the rearview mirror, the real estate industry is getting back to business. And so are the courts, with judges and lawyers continuing to process commission copycat settlements—with another one potentially coming this week. At the same time, the focus of the Department of Justice’s (DOJ) investigation and involvement in real estate policy is becoming more clear, as a law professor exclusively shared with RISMedia how antitrust lawyers took an interest in her work.
Also, later this week, the new judge in the looming buyer-filed Batton cases is expected to receive her first official update after the original judge stepped down, while JPAR faces a major deadline as it continues to engage in settlement talks.
Here is the latest from lawsuits affecting real estate across the country:
Fathom becomes latest copycat target to settle
Texas-based Fathom Realty announced that the brokerage had agreed to pay almost $3 million over two years in order to settle commission-based lawsuits, according to an SEC filing last week.
The company has been named in at least two Burnett copycat lawsuits, and had previously requested a deadline extension from a Texas judge as it pursued “mediation” with plaintiffs. Like other brokerages that have settled, the company is not admitting any wrongdoing, with Fathom Holdings CEO Marco Fregenal adding that the choice to settle is also “not…an acknowledgment of the validity of any claims made against us.”
“We continue to assert that Fathom never participated in any conspiracy to inflate commissions and continue to believe that due to our flat-fee model, there was no incentive to join any such conspiracy,” he said.
Like all other settlements, Fathom’s agreement must go through a formal legal approval process, with only three companies so far—RE/MAX, Anywhere and Keller Williams—getting that final sign-off by a judge (though that ruling is under appeal).
Law professor says DOJ took a keen interest in her analysis
University at Buffalo School of Law professor Tanya Monestier, in an exclusive, lengthy and wide-ranging interview with RISMedia, explained that she has had some contact with the Department of Justice (DOJ) concerning potential workarounds to the NAR settlement, though she stressed she has no idea whether or not what she provided was helpful.
Monestier was hesitant to share the specifics of her conversation with the DOJ lawyers. Pressed on the matter, she said, “It’s related to the NAR settlement. It wasn’t something that I had touched on. It wasn’t a pure contracts issue, let’s put it that way.”
Back in July, Monestier said she sent a memo to the DOJ focused on industry practices she was “concerned about.” A DOJ lawyer contacted her within hours, and set up a meeting where she presented her findings to lawyers, economists and “some other folks.”
The DOJ continues to show a sharp interest in real estate policies and practices, pushing forward with an independent inquiry into NAR while also intervening in multiple private lawsuits. It has not yet taken a stance on the NAR settlement, but could choose to intervene in that agreement before a final court hearing to approve the agreement scheduled for Nov. 26.
Judge issues “tentative” ruling denying Realtor.com in CoStar data-theft lawsuit
A federal judge ruled today that Move, Inc., the parent company of Realtor.com®, failed to show that there is an urgent need to bar CoStar from using data allegedly stolen by a former Realtor.com employee, calling Move’s arguments “unconvincing.”
The ruling comes as both sides have postured over the disputed facts of the case and the motivation of an employee who has admitted to accessing confidential information from Realtor.com after being laid off in January.
CoStar has argued the employee had no use or motivation to leverage the documents he accessed after joining Homes.com (owned by CoStar), and that CoStar as a company never used or received the documents. Move, Inc. pushed for an injunction to bar CoStar from using the data, claiming that CoStar was not taking the allegations seriously and couldn’t be trusted not to leverage the sensitive information.
Judge George H. Wu found that Move hasn’t “demonstrated the threat of immediate injury that is necessary to issue the extraordinary remedy of a preliminary injunction.” He also appeared skeptical of Move, Inc.’s legal reasoning in regard to how it would suffer “irreparable harm” without the injunction, and also Move’s lack of evidence regarding the former employee’s alleged misconduct.
New buyer-side commission suit judge to receive case update
Earlier this month, Judge Andrea Wood recused herself from the Batton cases, saying that she discovered that “the spouse of a person related to me within the third degree of relationship” was a partner at one of the law firms representing the defendants. That decision has potentially upended cases, which are notable as they are not directly covered by any settlement agreement struck so far due to the fact these cases were filed by recent homebuyers rather than sellers.
Wood was replaced by Judge Lashonda Hunt, who was only appointed to the position a little over a year ago. Hunt requested parties update her on the status of the case, which was previously aiming for a trial date somewhere toward the end of 2026 or in the first half of 2027, by this Wednesday, September 25.
It is unclear how the recusal will affect the case, which Wood initially dismissed but which was refiled with new plaintiffs and using a patchwork of state laws to argue that buyers were harmed by real estate policies around commissions.
OceanFirst Bank agrees to pay, make changes after DOJ redlining investigation
OceanFirst Bank—located in Toms River, New Jersey—was alleged to have engaged in redlining by restricting access to credit and mortgage lending services in majority-Black, Hispanic and Asian neighborhoods in the New Brunswick, New Jersey, area, according to the DOJ, and agreed to pay $15 million as part of a resolution of an investigation in the company..
Specifically, the DOJ complaint alleged that from 2018 through at least 2022, “OceanFirst acquired and subsequently closed branches and loan production offices in these neighborhoods, which, coupled with its insufficient marketing efforts and fair lending policies, led to OceanFirst failing to serve the needs of these neighborhoods.”
The investigation is part of an initiative launched in 2021 that is intended to combat discriminatory lending practices by banks all over the country. According to Attorney General Merrick B. Garland, investigations through the initiative have now won over $137 million in “relief” through numerous settlements.
OceanFirst countered the DOJ’s allegations, stating in a release that since 2019 it has made “significant commitments to minority market lending and outreach initiatives in the New Brunswick area and continues to explore ways to build and deepen relationships for further growth in these communities.”
JPAR up against deadline in copycat case
Texas-based JPAR requested a brief extension to file its response in one of the many copycat commission lawsuits, requesting until Sept. 27 as the company is currently “in the process of conducting settlement talks with the plaintiffs.”
Plaintiffs did not oppose the time extension, according to the filing.
