Despite reaching a settlement agreement with the home seller plaintiffs in the Hooper (formerly Phillips) commission lawsuit, eXp World Holdings’ legal woes are far from over.
On Tuesday, Laura Criss, Don Gibson, John Meiners and Daniel Umpa, who are the proposed class representatives in the combined Gibson/Umpa suit, filed a motion to intervene and transfer the case to the U.S. District Court for the Western District of Missouri, where it would fall under the supervision of Judge Stephen Bough.
In their motion, the petitioners take issue with eXp’s settlement agreement, which the brokerage is hoping will be approved as a nationwide settlement. The motion claims that eXp’s agreement was negotiated with the Hooper plaintiffs “after conducting prolonged, unsuccessful settlement negotiations with Intervenor Plaintiff counsel.”
“Based on the extensive experience of counsel for Intervenors in this litigation over the last five years — which includes an historic $1.78 billion dollar jury verdict — the settlement between Defendant eXp and Plaintiffs in this action is on unacceptable terms that do not provide sufficient relief to the nationwide class it purports to release. The settlement is significantly below comparable settlements that counsel for Intervenors have negotiated in light of the considerable financial resources of eXp.”
The motion goes on to claim that eXp and the Hooper plaintiffs have “engaged in an impermissible ‘reverse auction.’”
“The Manual on Complex Litigation specifically warns courts to be wary of this practice, where a ‘defendant selects among attorneys for competing classes and negotiates an agreement with the attorneys who are willing to accept the lowest class recovery (typically in exchange for generous attorney fees),’” the filing states.
In an emailed statement, an eXp spokesperson wrote that the motion is looking to influence which court will decide whether eXp’s nationwide settlement is approved.
“eXp is confident its settlement will be found to be fair, reasonable and adequate,” the spokesperson wrote.
In an emailed statement, the Hooper plaintiffs attorneys noted that the Gibson/Umpa plaintiffs have already tried to consolidate this and other lawsuits and were denied by the United States Judicial Panel on Multidistrict Litigation.
“Importantly, the majority of the 25 defendants in this action conduct business solely in the Southeast and do not conduct business in Missouri,” Bryan Knight, a partner at Knight Palmer LLC., wrote in an email. “As our response will show, Georgia is the proper venue for this action. In addition, there is no evidence of reverse auctioning. The settlement was a fair and reasonable agreement, negotiated and mediated at arm’s length. This settlement will provide tremendous benefit to the class and all future home sellers. We are confident the motion to intervene and transfer will be denied.”
In addition to taking issue with eXp’s settlement, the Gibson/Umpa plaintiffs also claim that a transfer of the case is warranted due to the first-to-file rule.
“Under the first-filed rule, ‘when parties have instituted competing or parallel litigation in separate courts, the court initially seized of the controversy should hear the case,’” the filing states. “Therefore, when ‘two actions involving overlapping issues and parties are pending in two federal courts, there is a strong presumption across the federal circuits that favors the forum of the first-filed suit under the first-filed rule.’”
The petitioners claim that the first-to-file rule applies here because the plaintiffs in the Hooper case have admitted that the core allegations in Gibson/Umpa are “substantially identical” to those brought in their suit. The motion notes that the requested relief is the same in both cases, the class definition overlaps and the class periods are almost identical.
“Because the present action is effectively the same case involving the same allegations and seeking the same relief with different named plaintiffs, the ‘first-to-file’ rule dictates that this action should be transferred to the court where Gibson is pending,” the motion states.
