A flurry of appeals of a federal judge’s final approval of the landmark National Association of REALTORS®’ (NAR) $418 million commission lawsuit settlement were filed with the Eighth District Court of Appeals days after the ruling, indicating the legal fight is far from over, according to new court documents.
Although U.S. Judge Stephen R. Bough gave final approval of the NAR settlement on Nov. 26, not everyone is on board with it. Out of around a dozen parties who formally objected to the settlement, four had formally appealed the ruling—all representing plaintiffs in other commission-based lawsuits, who have offered various objections to the settlement and the process by which it was approved.
Those appeals could play out over months or longer, although attorneys will file their official arguments in some of the appeals as early as next week. All of the appellants have laid out at least a framework of their likely appeals as objectors, including in-person last week in front of Bough at the final approval hearing.
In a strongly worded objection, Bruce Fox, a lawyer representing Pennsylvania-based Spring Way Center LLC—which filed a Burnett copycat lawsuit a little over a year ago—said the final deal fails to meet basic standards of “fairness and adequacy” under federal class-action rules.
The company takes particular affront with how the settlement releases thousands of smaller real estate brokerages from liability without requiring them to pay into the settlement fund.
At the hearing, Fox told Bough the settlement neglects to hold accountable smaller brokerages that he claimed were “also active participants in the conspiracies.” He also highlighted a New York Times investigation that accused NAR executives of lavish spending and excess personal benefits (although much of that report was based on activities that took place well before the commission lawsuit saga).
“The settlement amount is purportedly based upon ability to pay, but as with all the defendants, we also have not received any financial information despite the fact that we have asked for it, as well from NAR,” Fox told Bough. “No information has been provided about any of the franchisees’ ability to pay. Forcing the franchisees to contribute would generate a much larger settlement fund for the class members, of course. There are resources there that haven’t even been tapped or investigated.”
A more important and narrow appeal comes from the plaintiffs behind the largest buyer lawsuits. Those plaintiffs are seeking to have those who both bought and sold a home excluded from the settlement class—meaning they can sue the same defendants for essentially the same alleged misconduct.
Randall Ewing, representing James Mullis, who both bought and sold a home during the settlement period and is suing NAR and big brokerages in an Illinois-based class action, told Bough at the hearing that he objected to “additional language” in the approval order, rather than the substance of the settlement.
“(N)obody in this courtroom is advocating for homebuyers. Now, the reason our claims should not be released is because they are different claims,” Ewing said.
Ewing noted that early in 2024, when defendants and plaintiffs were sparring over whether all the various Burnett copycat lawsuits should be consolidated, at least one brokerage defendant tried to separate the buyer cases. He claimed that it was unfair under the law that buyers who also sold homes would get the same amount under the seller settlements, even though they ostensibly suffered twice the damages.
The other two appeals come from cases in New York City, with plaintiffs in those lawsuits arguing that the separation of real estate regulation and rules in Manhattan and Brooklyn, as well as the unique nature of that market, merited a carve-out of their cases. Michael Buchman, a lawyer representing plaintiffs in one of those cases, told Bough that there is no “identical factual predicate” in his cases, which involve the Real Estate Board of New York (REBNY) rather than NAR.
Buchman focused on opt-ins specifically—the portion of the settlement that allowed brokerages too large to be included automatically to pay extra for immunity. According to Buchman, a requirement for those brokerages opting in was that they withdraw legal arguments previously made trying to distinguish REBNY from NAR.
“The fact of the matter is that the opt-in defendants have repeatedly conceded that the REBNY conspiracy is separate from NAR,” Buchman said.
While none of these arguments swayed Bough, now an entirely different set of judges will be able to weigh in. The Eighth Circuit is famously conservative, with 10 out of 11 active judges appointed by Republican presidents (including four appointed by President-elect Donald Trump). How they will view these same arguments is unclear, but a decision in favor of one or more of the appellants could reopen at least some of the settled litigation.
Apart from the previously mentioned arguments, appellants have also claimed the amounts paid (now over $1 billion) are insufficient based on damages. Lawyers for Spring Way Center contend that class counsel “abandoned” a $1.8 billion Missouri jury verdict in the Burnett lawsuit trial for “pennies on the dollar” by expanding the case nationally while simultaneously settling for a fraction of potential damages, according to court documents.
The company argues that real estate markets in some states, particularly Alabama and Louisiana, would be “largely unaffected” by the settlement’s costs despite participating in the alleged commission-fixing scheme. It also challenged the arbitrary $2 billion annual revenue threshold used to determine which brokerages must contribute to the settlement.
Spring Way Center also raised significant constitutional due process concerns about how additional brokerages were allowed to “opt-in” to the settlement after initial approval. And while $418 million from NAR may seem substantial, the appeal noted it pales in comparison to the “trillions, not billions” in potential liability across the entire real estate industry over the lengthy period of alleged illegal activity.
The filing notes that only about 491,000 claims have been filed out of approximately 40 million notices sent. That’s roughly 1% of eligible homesellers, suggesting the settlement has “soured the American people on Class Action recovery.”
