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Certainly one of two bombshell class-action antitrust court cases heads to trial Monday with the fee construction of the true property business at stake.

This FAQ will function a information to the go well with referred to as Sitzer | Burnett, together with the go well with’s allegations, the events concerned, the proof the trial jury will and won’t see, the high-profile witnesses who might testify, the agreement phrases that would have an effect on the case’s result, and what comes subsequent after the decision.

Who’re the plaintiffs?

Missouri homesellers Rhonda Burnett, Jerod Breit, Jeremy Keel, Frances Harvey and Hollee Ellis. Their case used to be at first filed in April 2019 and received class-action standing in April 2022, granting them permission to constitute masses of 1000’s of homesellers who paid a purchaser dealer fee in reference to the sale of residential actual property in Missouri indexed on one in all 4 more than one list products and services — MARIS, Heartland MLS, Southern Missouri MLS and the Columbia Board of Realtors MLS — beginning Apr. 29, 2015.

The plaintiffs’ legal professionals are Benjamin H. Fadler, Michael S. Ketchmark and Scott A. McCreight of Ketchmark & McCreight; Eric L. Dirks and Matthew Lee Dameron of Williams Dirks Dameron;  Erin D Lawrence, Jeremy M. Suhr and Brandon J.B. Boulware of Boulware Regulation.

Who’re the defendants?

The Nationwide Affiliation of Realtors and actual property franchisors Keller Williams, Any place (previously, Realogy), RE/MAX, HomeServices of The usa, and HomeServices subsidiaries BHH Associates and HSF Associates. The plaintiffs have filed proposed settlements with Any place and RE/MAX within the case and the courtroom has stayed the claims in opposition to them, so the firms won’t must shield themselves at trial.

NAR’s legal professionals are Alexander Barrett and Charles W. Hatfield of Stinson; David R. Buchanan of Brown & James; Ethan Glass, Anne Bigler, Beatriz Mejia, Deepti Bansal, Elizabeth Wright, Georgina Inglis, Samantha Strauss and Sarah M. Topol of Cooley; and Jack R. Bierig, Jacob Ok. Danziger, John S. Purcell, Molly L. Wiltshire, Robert J. Wierenga and Suzanne L. Wahl of ArentFox Schiff.

Lawyers for HomeServices, BHH Associates and HSF Associates are Brian C. Fries and Jean Paul Bradshaw II of Lathrop GPM; Jay N. Varon and Jennifer M. Keas of Foley & Lardner; Matthew T. Ciulla, Robert D. MacGill, Scott E. Murray and Patrick Sanders of MacGill.

Keller Williams’s legal professionals are Anna P. Hayes, David C. Kully, Jennifer Lada, Martin G. Durkin, Jr., Timothy Ray, William F. Farley, Barack S. Echols, and Dina McKenney of Holland & Knight; Danne Wayne Webb of Horn, Aylward & Bandy; David R. Buchanan and Taylor L. Connolly of Brown & James.

What are the allegations?

The plaintiffs allege that NAR’s Participation Rule, which calls for list agents to provide purchaser agents a fee so as to listing a assets in a Realtor-affiliated MLS, violates the Sherman Antitrust Act through inflating vendor prices. The style rule applies to all 500 or so MLSs owned through Realtor associations nationally.

The guideline underpins the MLS device that just about all U.S. actual property brokers and agents depend on to do their jobs. NAR’s MLS coverage guide defines an MLS, partly, as “a method in which licensed individuals make blanket unilateral provides of repayment to different individuals.”

The Participation Rule, sometimes called NAR Coverage Observation 7.23, says, “In submitting assets with the more than one list carrier, individuals make blanket unilateral provides of repayment to the opposite MLS individuals and shall due to this fact specify on every list filed with the carrier the repayment being introduced through the list dealer to the opposite MLS individuals. That is important as a result of cooperating individuals have the fitting to understand what their repayment can be previous to taking off their efforts to promote.”

NAR’s MLS coverage guide is going on to mention that “More than one list products and services shall no longer put up listings that don’t come with an be offering of repayment expressed as a share of the gross promoting value or as a certain greenback quantity, nor shall they come with basic invites through list agents to different individuals to speak about phrases and stipulations of conceivable cooperative relationships.”

NAR has persistently mentioned in criminal filings and public statements that the Participation Rule stipulates that list agents can be offering purchaser agents “as low as” one cent or one greenback so as to listing a assets in a Realtor-affiliated MLS, however the 1.5 million-member business workforce has lately modified its interpretation of the rule of thumb to permit list agents to provide purchaser agents not anything.

The plaintiffs additionally allege that sure NAR regulations restrain the negotiation of provides of repayment to purchaser agents, deny patrons knowledge on introduced purchaser dealer commissions, permit purchaser brokers to constitute that their products and services are unfastened, and incentivize and facilitate guidance through agents towards listings that supply a minimum of an ordinary fee for the marketplace and clear of listings that supply not up to the standard fee. The defendants deny the plaintiffs’ allegations.

What are the damages alleged?

The plaintiffs are requesting repayment of $1.3 billion in commissions they and their fellow category contributors paid to purchaser brokers over the process greater than seven years — plus attainable treble damages that would elevate that overall to round $4 billion.

In step with the plaintiffs’ proposed jury verdict shape, jurors must come to a decision whether or not they imagine a conspiracy existed and, in the event that they do, whether or not that conspiracy raised, inflated or stabilized dealer fee charges paid through homesellers. If the jurors solution “sure” to that latter query, they will have to then say whether or not they imagine every of the defendants knowingly and voluntarily joined the conspiracy with the aim of furthering its targets.

The jurors will have to then say whether or not they imagine the conspiracy brought about the plaintiffs to pay extra for actual property brokerage products and services than they might have with out the conspiracy. If the solution is “sure,” they will have to then state the quantity of damages proved through the category plaintiffs.

Who’s the pass judgement on?

Pass judgement on Stephen R. Bough

Pass judgement on Stephen R. Bough makes a speciality of multidistrict litigation and sophistication movements within the U.S. District Court docket in Western Missouri. An Obama appointee, he used to be sworn in to his present place in December 2014.

What’s the trial agenda?

The trial will get started on Oct. 16 and is scheduled to closing for 3 weeks. The jury variety procedure will start on Oct. 13 and the jury might be impaneled on Oct. 16. Then, every facet will give their opening statements and the plaintiffs will provide their case. The defendants will due to this fact provide their case and every facet will finish with last statements. The pass judgement on will instruct the jury and the jury will then head into deliberations that would closing hours or days. The events be expecting a verdict both through Nov. 3 or the next week, Nov. 6-10.

Who’re the witnesses?

Each and every facet has submitted an inventory of attainable witnesses to the courtroom. Those are witnesses who is also known as to testify however whom neither facet has dedicated to calling. They’ll seem both are living or via video deposition. The lists come with many names of notables within the business, together with NAR CEO Bob Goldberg, Keller Williams co-founder Gary Keller, HomeServices CEO Gino Blefari, RE/MAX co-founder Dave Liniger and previous Coldwell Banker CEO Ryan Gorman.

This is the plaintiffs’ proposed witness listing:

A. Witnesses To Be Referred to as Reside At Trial

1. Roger Alford
2. Jerod Breit
3. Rhonda Burnett
4. Hollee Ellis
5. Frances Harvey
6. Jeremy Keel
7. Todd Reynolds
8. Craig Schulman

B. Witnesses To Be Referred to as Via Videotaped Deposition

9. Nick Bailey (August 9, 2022)
10. Gino Blefari (February 8, 2022)
11. Michelle Figgs (February 4, 2022)
12. Rene Galicia (March 4, 2022)
13. Rodney Gansho (August 3, 2022)
14. Kevin Goffstein (October 5, 2023)
15. Bob Goldberg (November 22, 2021)
16. Ryan Gorman (August 22, 2022)
17. Gary Keller (January 19, 2022)
18. Darrell King (February 2, 2022)
19. David Liniger (April 4, 2022)
20. Meredith Maples (June 17, 2022)
21. Cliff Niersbach (January 26, 2021)
22. Jay Papasan (April 14, 2022)
23. Dana Strandmo (Might 25, 2022)
24. Stefan Swanepoel (February 23, 2023)
25. Rosalie Warner (October 19, 2022)
26. Information custodian for every Defendant (if important)

This is the defendants’ proposed witness listing:

1. Gino Blefari
2. Jerod Breit
3. Rhonda Burnett
4. Sarah Butler
5. Brian Cannan
6. Jon Coile
7. Jen Davis
8. Hollee Ellis
9. Michelle Figgs
10. Mike Frazier
11. Rodney Gansho
12. Kevin Goffstein
13. Bob Goldberg
14. Frances Harvey
15. William Fried
16. Jeremy Keel
17. Gary Keller
18. Ashley Kelm
19. Marc King
20. Darrel King
21. Meredith Maples
22. Sharon Millett
23. Linda O’Connor (deposition)
24. Ron Peltier
25. David Stevens
26. Dana Strandmo
27. Scott Trupiano (deposition)
28. Rosalie Warner
29. Krista Wilson
30. Lawrence Wu
31. Stefan Swanepoel (deposition)
32. Sarah Younger (deposition)
33. Cary Sylvester (deposition)
34. Any witness indexed through plaintiffs
35. Any witness important for rebuttal or impeachment

What proof will the jury no longer see?

The jury may not be made up of actual property pros. They’ll no longer know what Inman readers know, partly through design. Upfront of the trial, events on all sides of the dispute filed dozens of requests with the courtroom (referred to as “motions in limine”) to suppress sure proof from the jury as it could be unfairly prejudicial to at least one facet or the opposite. Maximum had been granted, a minimum of partly.

In step with the pass judgement on’s orders, this implies the trial will exclude, as asked through the defendants:

• proof associated with discrimination in the true property business
• references to govt investigations of NAR
• inappropriate judicial choices
• proof of unrelated litigation
• recordings from cut price brokerage REX Actual Property purportedly appearing brokers guidance patrons clear of listings that didn’t be offering a pre-set purchaser agent fee
• proof of coverage adjustments made through Any place after this lawsuit used to be filed
• references to the proposed agreement in Nosalek v. MLS Belongings Knowledge Community, Inc.
• connection with a deposition query about prior, unrelated unlawful habits and its reaction
• proof of unrelated alleged prior habits through Re/MAX executives
• proof or arguments {that a} defendant must no longer be chargeable for the commissions charged through Any place
• references or testimony from withdrawn mavens Walter Clements, Dan Sight, and Stephen McWilliam
• all proof and testimony associated with defendants’ financials
• references to the quantities of the Any place and RE/MAX settlements within the case

The trial can even exclude the next proof, as asked through the plaintiffs:

• references to “lawyer-driven” litigation or the cases by which category representatives made up our minds to have interaction recommend to constitute them
• connection with plaintiffs’ legal professionals’ charges
• connection with plaintiffs’ litigation historical past
• connection with named plaintiffs’ attendance or nonattendance at trial
• proof, inference, or argument relating to “offsets,” comparable to purchaser dealer products and services equipped to plaintiffs and sophistication contributors, or relating to plaintiffs’ gross sales earnings or proceeds
• testimony from named plaintiffs in regards to the legislation, the pleadings, and criminal conclusions
• connection with prior category representatives or to category representatives in different instances or their alleged damages
• connection with the evaluations or conclusions about this example from “mavens” who weren’t disclosed on this litigation
• connection with the repayment of mavens
• connection with the choice of paperwork produced or the expense of protecting this example
• argument or connection with the have an effect on of a verdict on defendants or their consumers or {that a} verdict is also trebled
• connection with the wealth, source of revenue, good fortune, commute, or politics of plaintiffs’ recommend
• references to withdrawn plaintiffs’ mavens Doug Minor and Jeffrey Rothbart
• connection with the case as frivolous or the meant ease of submitting court cases
• connection with “blameless till confirmed accountable” or identical sentiment
• references to pleadings or motions in limine
• connection with any absence of the DOJ “resolution” to not prosecute defendants or to “bless” or “approve” any NAR or MLS regulations

What proof will the jury see that the events didn’t need them to peer?

One of the crucial events’ requests to withhold proof from the jury weren’t a success. That is what’s going to be honest recreation at trial, over the defendants’ objections:

• proof of adjustments to NAR regulations that came about after plaintiffs filed this lawsuit
• rumour statements in govt studies
• references to the notes of former Keller Williams business analyst Michelle Figgs, particularly the commentary in the ones notes that “Gary [Keller] believes strongly in collusion idea for why commissions are solid. ‘co-opetition.’”
• references to financial fashions revealed or introduced through Keller Williams or its workers figuring out agent trade metrics, together with moderate commissions, and the way the ones metrics relate to brokers’ earning; and nationwide moderate fee charges jointly earned through impartial contractor brokers affiliated with KW franchisee brokerages around the U.S. that had been reported right through KW occasions
• deposition testimony for witnesses showing are living at trial
• proof with regards to RE/MAX’s tutorial fabrics that had been allegedly no longer made to be had to agents or brokers in the USA
• proof and testimony relating to statements made through non-party actual property dealer Linda O’Connor relating to U.S. antitrust rules
• proof and argument with regards to Any place, RE/MAX and their respective manufacturers, together with the Any place and RE/MAX deposition testimony prior to now designated through plaintiffs
• testimony from named defendants in regards to the legislation, the pleadings and criminal conclusions
• proof with regards to NAR’s Transparent Cooperation Coverage
• connection with Any place’s and RE/MAX’s proposed settlements, apart from for the quantity of the offers

Defendants can also be unfastened to convey this proof at trial, in spite of plaintiffs’ objections:

• connection with alleged procompetitive advantages of the challenged regulations
• connection with quantities retained through defendants in comparison to different co-conspirators
• connection with plaintiffs’ pride with their agent carrier or that they agreed to the fee price
• proof or argument {that a} defendant used to be no longer concerned with the preliminary resolution to undertake the challenged regulations
• depositions taken in a identical, better case referred to as Moehrl
• reference or argument that plaintiffs have the only real burden of evidence

What are the phrases of the proposed Any place and RE/MAX settlements?

The jury will most likely pay attention references to the phrases of the Any place and RE/MAX settlements (apart from for his or her quantities) which might tell how they come to a decision the case.

Of their request for initial approval of the offers, the Sitzer | Burnett plaintiffs famous that Any place had agreed to pay $83.5 million, RE/MAX had agreed to pay $55 million, and each had agreed to modify their trade practices and “to offer cooperation to Plaintiffs within the litigation in opposition to the remainder Defendants.” The settlements follow to each Sitzer | Burnett and Moehrl.

In step with that submitting, the trade observe adjustments Any place and RE/MAX agreed to make come with:

• to not require company-owned brokerages, franchisees or their brokers to belong to NAR or apply NAR’s Code of Ethics or MLS guide. That specific provision of the offers mechanically terminates if NAR reaches a agreement with the plaintiffs or if a courtroom orders injunctive reduction in both case. Injunctive reduction restricts a occasion’s conduct, frequently via injunctions or necessities.
• advise and periodically remind company-owned brokerages, franchisees and their brokers that there’s no requirement that they will have to make provides to or will have to settle for provides of repayment from cooperating agents or that, if made, such provides will have to be blanket, unconditional or unilateral
• require that company-owned brokerages and their brokers (and counsel and inspire that any franchisees and their brokers) give away to potential homesellers and patrons and state in conspicuous language that dealer commissions don’t seem to be set through legislation and are totally negotiable
• limit company-owned brokerages and their brokers performing as purchaser representatives (and counsel and inspire that franchisees and their brokers performing as purchaser representatives chorus) from promoting or another way representing that their products and services are unfastened
• require that Any place company-owned brokerages and their brokers come with, on the earliest conceivable second, the list dealer’s be offering of repayment in every lively list shared with potential patrons via IDX or VOW shows, or via every other shape or structure
• show provides of repayment made through list agents or brokers, the place such information is to be had and/or equipped to RE/MAX for all lively listings shared on REMAX.com and counsel and inspire that franchisees and brokers come with cooperative repayment provides (if any) on any listings that they publicly show or proportion with potential patrons via IDX or VOW shows, or via every other shape or structure
• limit the company-owned brokerages and their brokers (and counsel and inspire that any franchisees and their brokers chorus) from using any era or taking handbook movements to filter or limit MLS listings which can be searchable through and exhibited to customers in keeping with the extent of repayment introduced to any cooperating dealer until directed to take action through the buyer (and get rid of any inside methods or technological processes that can recently facilitate such practices)
• advise and periodically remind RE/MAX franchisees and their affiliated brokers and the Any place company-owned brokerages and their brokers in their legal responsibility to (and counsel and inspire that any Any place franchisees and their brokers) display houses without reference to the life or quantity of cooperative repayment introduced only if every such assets meets the patron’s articulated buying priorities
• for Any place company-owned brokerages get rid of any minimal consumer fee necessities and no longer categorical or suggest a minimal fee requirement in RE/MAX franchise agreements, coaching fabrics or different insurance policies
• for company-owned brokerages, franchisees and their brokers, broaden coaching fabrics in step with the above reduction and get rid of any opposite coaching fabrics recently used

How will the settling franchisors cooperate in opposition to the remainder defendants?

The proposed settlements obligate Any place and RE/MAX to cooperate with the plaintiffs within the additional prosecution in their claims in opposition to the remainder defendants. The plaintiffs allege the ones non-settling defendants — NAR, KW, HomeServices and its subsidiaries — are nonetheless “collectively and severally liable” for all damages brought about through the entire contributors of the alleged conspiracy, that means that the jury can to find the remainder defendants chargeable for any damages they come to a decision Any place, RE/MAX and their fellow defendants allegedly brought about.

Within the proposed settlements, Any place and RE/MAX agreed to:

• supply as much as 3 present officials or workers of the settling defendant or its subsidiaries to take part as witnesses at trial in Moehrl and supply get entry to by means of recommend to these witnesses previous to trial for as much as two hours (if asked through plaintiffs)
• withdraw knowledgeable designations and acquire settlement with any one at a time retained mavens that they’re going to no longer testify at trial as a retained knowledgeable for every other defendant within the movements
• use cheap efforts to authenticate paperwork produced through the settling defendants and identify that the ones paperwork are admissible
• use cheap efforts to offer related category member information and solution questions in regards to the information to strengthen the availability of sophistication understand

What occurs subsequent after the trial is over?

In a webinar on Wednesday, NAR laid out 4 eventualities for a jury resolution:

1. A hung jury, that means the jurors are not able to return to an settlement and due to this fact there will have to be a brand new trial.

2. The jury unearths the defendants no longer liable, that means the defendants win.

3. The jury unearths the defendants liable, that means the plaintiffs win, however awards no exact damages or financial consequences.

4. The jury unearths the defendants liable and awards financial damages and/or injunctive reduction.

Regardless of who wins at trial, the dropping occasion or events will nearly indisputably attraction. That suggests it can be years earlier than there’s a ultimate resolution within the case. How quickly the results of the trial can be felt around the business depends upon who wins and whether or not the courtroom chooses to require adjustments whilst a last resolution is pending.

E mail Andrea V. Brambila.

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