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Representatives from eXp and Weichert will be deposed next week as the real estate companies attempt to fight off allegations they negotiated a “sweetheart deal” to resolve commission-related antitrust claims against them nationwide.
Attorneys for homeseller plaintiffs in a case known as Gibson informed the U.S. District Court for the Western District of Missouri on Friday that on March 5 and 7, respectively, they will take videotaped depositions of the designated representatives of Weichert and eXp “best able to testify” under oath regarding settlement negotiations in a separate, but similar, lawsuit known as Hooper.
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“[EXp] has a duty to designate one or more officers, directors, managing agents, or other persons with knowledge to testify fully regarding the topics listed in Exhibit 1,” one of the filings reads.
“eXp must also promptly confer in good faith about the matters for examination. The deposition(s) will be taken before a Notary Public or some other officer authorized by law to administer oaths for use at trial.”
Both Weichert and eXp attempted to reach settlements in the Gibson case last year, but negotiations broke down, and the companies instead mediated nationwide settlements with attorneys for plaintiffs in Hooper, agreeing to pay $8.5 million and $34 million, respectively.
The Missouri court is currently weighing claims by the Gibson plaintiffs that eXp and Weichert engaged in a “reverse auction,” or a legal strategy in which a defendant negotiates a settlement with attorneys who are willing to accept settlement amounts less than attorneys in a separate case.
In a statement, eXp spokesperson Noor Marzook told Inman, “[W]e remain focused on securing approval of our settlement of the seller-side commission cases and confident the Georgia judge overseeing the Hooper case will find the settlement to be fair, reasonable and adequate.” The company declined to say who would testify at the deposition on eXp’s behalf.
Inman has reached out to Weichert for comment and will update this story if and when a response is received.
According to Friday’s legal filings, the representatives of the companies will be asked to cover these nine topics:
- Communications between eXp/Weichert and any mediator used or considered in connection with any settlement negotiations in the Hooper case.
- Communications between eXp/Weichert and plaintiffs’ counsel in the Hooper case, including but not limited to all substantive settlement communications, scheduling communications, mediation statements, financial documents, and draft and final settlement agreements.
- Communications between eXp and Weichert regarding any settlement negotiations or agreements in the Hooper case.
- Any documents provided to plaintiffs’ counsel in the Hooper case in advance of mediation.
- Any binding term sheet executed in the Hooper case.
- The Settlement Agreement executed in the Hooper case, including but not limited to the amount agreed to be paid.
- Any disclosures to any mediator and/or plaintiffs’ counsel in the Hooper case regarding settlement negotiations actually conducted or that might be conducted with plaintiffs’ counsel in the Gibson case, Umpa case, or any other case alleging an anti-competitive agreement to adopt, enforce, or maintain a rule requiring cooperative compensation offers on a listing service.
- Settlement communications with plaintiffs’ counsel in any case, other than Hooper, that alleges an anti-competitive agreement to adopt, enforce, or maintain a rule requiring cooperative compensation offers on a listing service.
- Communications with any mediator in any case, other than Hooper, that alleges an anti-competitive agreement to adopt, enforce or maintain a rule requiring cooperative compensation offers on a listing service.
Separately, on Monday, Feb. 24, Judge Stephen R. Bough, who is overseeing the Gibson suit, denied motions to compel arbitration and stay the case filed by two other defendants in the case, William Raveis Real Estate and Berkshire Hathaway Energy (BHE), the parent company of HomeServices of America. The companies had asked that members of the purported class for Gibson be forced to abide by arbitration agreements they signed as homesellers.
Bough rejected the motions because the Gibson case has not yet received class certification and “absent class members are not parties to a case until a class is certified,” so they are not yet subject to the court’s jurisdiction.
More significantly, however, Bough noted that neither BHE or Raveis had signed such agreements themselves. Rather, homesellers had signed them with the companies’ affiliates.
“As this Court and the Eighth Circuit have previously held, nonparties cannot enforce contracts and therefore cannot compel arbitration,” Bough wrote.
The Gibson suit was the first antitrust commission suit filed after an October 2023 jury verdict in the Sitzer | Burnett case awarded billions to a class of homeseller plaintiffs in Missouri.
Like Sitzer | Burnett, the Gibson suit challenges a now-defunct National Association of Realtors rule requiring listing brokers to offer compensation to buyer brokers in order to submit a listing to a multiple listing service, which the plaintiffs allege violated the Sherman Antitrust Act.
But the Gibson suit’s scope is potentially much bigger than that of its predecessor: Gibson seeks class-action status on behalf of “all persons who listed properties on a Multiple Listing Service in the United States using a listing agent or broker affiliated with” the corporate defendants and who paid a buyer broker commission from Oct. 31, 2019, until the present.
Several other defendants have settled the Gibson case, including Compass, Douglas Elliman, The Real Brokerage, @properties, Redfin, Realty ONE Group, Engel & Völkers, HomeSmart, United Real Estate, NextHome, the Keyes Company, John L. Scott Real Estate Affiliates, The K Company Realty, Real Estate One and Baird & Warner.
Bough has granted preliminary approval to those deals and a final approval hearing for the deals is scheduled on June 24 at 1:30 p.m. Central.
