A federal appeals court on Tuesday upheld $110.6 million in settlements reached by major real estate brokerages in the Gibson commission case, rejecting challenges from objectors who sought to undo the deals.
The U.S. Court of Appeals for the Eighth Circuit affirmed the settlements less than two weeks after the same court upheld the landmark Sitzer | Burnett settlement involving the National Association of Realtors and other defendants.
In a published opinion issued Tuesday, the three-judge panel said the Gibson appeals largely mirrored the challenges it rejected in its Aug. 19 Burnett ruling and incorporated the facts and legal analysis from that decision.
According to the appellate opinion, the settlements involved Compass, Redfin, The Real Brokerage, Realty ONE Group, @properties parent company At World Properties, Douglas Elliman, Engel & Völkers, HomeSmart and United Real Estate.
Together, the settlements added $110.6 million to the broader pool of money recovered for class members through the commission litigation, bringing the total to roughly $1.018 billion, according to Tuesday’s opinion. Each of the settling defendants also agreed to the same practice changes outlined in the Burnett settlement.
Gibson was filed in Missouri federal court on Oct. 31, 2023, the same day a jury returned a $1.78 billion verdict in the Sitzer commission case. The suit, brought by some of the same plaintiffs’ attorneys, targeted Compass, Redfin, eXp, Douglas Elliman and other major real estate companies over allegations that they participated in the same broader commission conspiracy. Gibson was later consolidated with Umpa, another nationwide commission case.
The settlements drew challenges from four objectors who also participated in the Burnett appeals — James Mullis, Monty March, Robert Friedman and Benny Cheatham.
Among other things, the objectors argued that the settlements improperly released claims brought by homebuyers, claims involving the Real Estate Board of New York (REBNY) and other non-NAR listing services, and state-law claims that they said differed from those originally pursued in the commission litigation. They also challenged the adequacy of the settlements and alleged collusion in the settlement process.
The Eighth Circuit ultimately upheld the settlements and rejected the objectors’ arguments. As it did in Burnett, the panel found that claims involving buyers and sellers could be released together because they arose from the same alleged underlying conduct — MLS rules that the plaintiffs claimed drove up commission costs across residential real estate transactions.
The court specifically rejected Mullis’ argument that homebuyer claims were fundamentally different because buying and selling represent separate transactions.
“The claims nevertheless arise from the same nucleus: the conspiratorial MLS rules that drove up the prices for all home transactions,” the court wrote in the Gibson opinion.
The panel reached a similar conclusion regarding claims involving REBNY and non-NAR listing services. The court said the relevant common thread was the alleged relationship between commission rules and inflated housing costs, rather than the particular MLS or geographic market involved.
The court also rejected arguments that U.S. District Judge Stephen Bough violated objectors’ due process rights by requiring them to appear in person at settlement hearings, noting that the district court nevertheless considered each objection on its merits.
“For all these reasons, and those expressed in Burnett, we affirm,” the panel concluded.
The ruling adds another layer of appellate support for the nationwide commission settlements that have reshaped the litigation landscape since the Sitzer verdict nearly three years ago.
The objectors have 14 days from Tuesday’s judgment to seek rehearing or rehearing en banc before the Eighth Circuit.
