A judge overseeing the largest copycat commission lawsuit today denied eXp’s request to pause the case against them based on a settlement agreement in a separate, smaller lawsuit, ordering both eXp and Weichert—which also settled in the smaller copycat—to allow him and plaintiff attorneys to review the “timing and circumstances” of those settlements, potentially upending those deals..
Plaintiffs in the larger copycat, known as GIbson, had previously argued that eXp engaged in a legally dubious “reverse auction process” by choosing to negotiate with plaintiffs in the smaller case, known as Hooper, in order to get a better deal. The Gibson plaintiffs’ attorneys—who are the same lawyers that represented plaintiffs in the landmark Burnett case—claimed that eXp got a better deal by negotiating with less experienced lawyers who were willing to take a smaller amount.
The judge overseeing Gibson, Stephen R. Bough (who also oversaw the Burnett case) broadly agreed that “Plaintiffs raise genuine issues of potentially questionable behavior
regarding eXp’s Hooper settlement,” and ordered both parties to engage in discovery to determine whether eXp and Weichert engaged in the “reverse auction,” which requires a yet-unproved “collusive element.”
“Plaintiffs allege that following a breakdown in settlement discussions with (Gibson) Plaintiffs, eXp straight away announced a settlement with the Hooper plaintiffs,” Bough wrote. “Given the alleged lack of financial considerations and quick settlement in the later-filed Hooper case, granting a stay would not serve in the best interests of justice due to the possible irreparable harm resulting Plaintiffs’ claims in this case being estopped due to a binding, underfunded class settlement in Hooper.”
In the settlement with the Hooper plaintiffs, eXp agreed to pay $34 million—substantially less than other brokerages its size. eXp previously told RISMedia in a statement that it was “confident its settlement will be found to be fair, reasonable and adequate.”
An eXp spokesperson defended the process and the company’s settlement in an email to RISMedia.
“eXp mediated unsuccessfully with the Gibson plaintiffs in April 2024. Separately, and nearly six months later, eXp mediated with the Hooper plaintiffs and reached a settlement that we are confident will be found to be fair, reasonable and adequate and was not a product of any so-called reverse auction,” the spokesperson said.
Representatives for Weichert could not immediately be reached for comment
It is unclear when the discovery process regarding the agreement will begin, but based on Bough’s order, eXp and Weichert will both continue to face deadlines in Gibson while it plays out. Other settlements—nearly all of which have been struck in the Gibson and Burnett cases—resulted in judges issuing pauses in the smaller copycats, sparing brokerages from having to answer deadlines while their agreements were approved.
Bough himself will also be part of the discovery process, which will take place confidentially in order to preserve trade secrets and sensitive negotiations.
At the same time, though, Bough wrote that the GIbson plaintiffs have agreed to waive those confidentiality provisions to discuss the “proposed settlement amounts” during their negotiations with eXp, either publicly or with Bough. He ordered both plaintiffs and lawyers for eXp and Weichert to “meet and confer” to begin the discovery process.
This is a developing story. Stay turned to RISMedia for updates.
