On the second day of Week 3, the Sitzer/Burnett trial ended with a verdict for the plaintiffs, awarding them $1.785 billion in damages. 

The federal jury deliberated for two hours and 28 minutes the day after closing remarks were given. Plaintiffs argued that defendants, including The National Association of Realtors, Keller Williams and Home Services of America, conspired to keep and enforce the cooperative compensation rule, which in turn led to inflated fees for home sellers.  

Attorneys for the defense will likely start the appeal process as soon as possible.

Tune in for BAM’s live reaction to the news:

Verdict from the Federal Jury

The jury for the trial unanimously said yes to four out of five questions on the ballot, which included:

  • Whether a conspiracy existed
  • Whether the conspiracy impacted commission fees
  • Whether the defendants voluntarily or knowingly acted on the conspiracy

The jury also filled in the full amount of damages requested by the plaintiffs for the fifth question, awarding a total of $1,785,310,872 in damages, which will be automatically trebled to $5.356 billion.

Judge Stephen R. Bough to issue final judgment

As HousingWire’s breaking news piece pointed out, Judge Stephen R. Bough still needs to give his final judgment on the case before the jury’s verdict is final. As the presiding judge, he has the authority to issue injunctive relief. 

He could, for example, ban the cooperative compensation rule on all multiple listing services nationwide, making it impossible for listing agents and home sellers to predetermine compensation for buyer agents. 

Such a ruling would also prevent listing agents from offering a share of commissions to buyer agents. And buyer agent compensation would no longer appear on the MLS. 

Or, on the flip side, Judge Bough could keep parts of the cooperative compensation rule in place. He could even require an allotment of at least one penny for the cooperative compensation field on the MLS—a requirement NAR effectively nullified a little more than a week before the trial began.

Michael Ketchmark files Gibson lawsuit 

Whatever your take on how the attorneys performed during the trial, lead counsel for the plaintiffs, Michael Ketchmark, is clearly basking in the glow of today’s victory. 

Shortly after the jury reached a verdict, Ketchmark filed a new lawsuit, known as Gibson, in the U.S. District Court for the Western District of Missouri on behalf of three home sellers, while seeking class-action status: Don Gibson, Lauren Criss and John Meiners.

Seven defendants are named in the case: Compass, eXp World Holdings, Redfin, Weichert Realtors, United Real Estate, Howard Hanna Real Estate, Douglas Elliman, and the National Association of Realtors.

Ketchmark told Inman

“Today we also filed a nationwide lawsuit against the other major corporate real estate companies who are involved in this, along with NAR, across the country. Our hope and goal is to free the grip they have on homesellers across the United States. It’s time that the free market and the internet is allowed to do its work and to bring the savings to homeowners that they’re so entitled to when they sell their homes.”

Michael Ketchmark

Head attorney for Sitzer/Burnett plaintiffs

Defendants are likely to appeal

Meanwhile, RE/MAX and Anywhere Real Estate, who reached a settlement with the plaintiffs in the Sitzer/Burnett, Moehrl, and now Nosalek cases, are on the sidelines with less to pay in damages. But it’s too soon yet to say, “I told you so.” 

A spokesperson for Keller Williams, Darryl Frost, alluded to an appeal being filed and mentioned “crucial evidence” that defendants were not allowed to enter. 

“We are disappointed that before the jury decided this case, the court did not allow them to hear crucial evidence that cooperative compensation is permitted under Missouri law. This is not the end. Keller Williams followed the law regarding cooperative compensation and stands by the evidence presented on the 100-year-old practice of sellers’ agents offering commissions to other agents who help market and sell homes. Looking forward, we will consider all options as we assess the verdict and trial record, including avenues of appeal.”

Darryl Frost

Spokesperson for Keller Williams

A spokesperson for HomeServices of America also vowed to appeal the court’s ruling in Missouri: 

“Today’s decision means that buyers will face even more obstacles in an already challenging real estate market and sellers will have a harder time realizing the value of their homes. It could also force homebuyers to forgo professional help during what is likely the most complex and consequential financial transaction they’ll make in their lifetime.”

Spokesperson for HomeServices of America

Mantill Williams, spokesperson for the National Association of Realtors (NAR) issued the following statement: 

“NAR rules prioritize consumers, support market-driven pricing and promote business competition. This matter is not close to being final as we will appeal the jury’s verdict. In the interim, we will ask the court to reduce the damages awarded by the jury. We stand by the fact that NAR’s guidance for local MLS broker marketplaces ensures consumers get comprehensive, equitable, transparent and reliable home information and that brokerages of any size, service or pricing model get a fair shot at competing. We will continue to focus on our mission to advocate for homeownership and always put consumer interests first. It will likely be several years before this case is finally resolved.”

Mantill Williams

Spokesperson for the National Association of Realtors (NAR)

Real estate stocks take a dive

Lance Lambert Tweeted the news, sharing images that show real estate stocks plunging in reaction to the verdict. 

Within minutes after the verdict was given, Byron Lazine discussed the news on a special live broadcast, responding to live comments and taking live calls. We’ll share the highlights in a separate BAM article tomorrow morning. 

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