HomeServices of America, the remaining defendant in the Sitzer/Burnett commission lawsuit, suffered another blow on Tuesday. In a filing, Judge Stephen Bough, who oversaw the Sitzer/Burnett trial in Oct. 2023, denied the HomeServices defendants’ motion to decertify the class.
HomeServices of America first filed its motion to decertify the class in early January 2024. The court initially certified the class in April of 2022, as it found that the class satisfied all the requirements of Federal Rule of Civil Procedure 23. Rule 23(b)(3) requires that the court “find that ‘questions of law or fact common to class members predominate over any questions affecting only individual members,’ and that a class action is the ‘superior’ method of adjudication of the controversy. ‘Once a class is certified, the Court has an ongoing duty to ensure that the class continues to be certifiable.’”
At the time, the defendants in the suit, which included HomeServices, as well as the National Association of Realtors, Keller Williams, Anywhere, and RE/MAX, requested that the Eighth Circuit court of appeal review the class certification order. The Eighth Circuit refused this request.
In their motion, the HomeServices defendants argued that “decertification is warranted because ‘[t]rial revealed that individual issues pervade both the threshold question of antitrust injury and the ultimate question of damages.’” They also argued that testimony at the trial revealed “highly individualized facts” that would influence “whether any class member would have authorized cooperative compensation,” and that individualized proof would be needed to determine the “extent to which any class member was injured.”
Additionally, HomeServices argued to that “trial evidence showed that a meaningful number of class members were not injured[,]” that the plaintiffs did not provide a “common approach to any damages calculation,” and that the plaintiffs’ economic expert, Craig Schulman “failed to provide this proof of classwide injury.”
In response, Bough wrote in his motion that the court’s “reasoning in the class certification order where it found that common questions of fact and law predominate remains the same.”
Unlike HomeServices of America, Bough found that Schulman’s testimony “demonstrated these same points through common evidence, satisfying the predominance requirement. Through careful analysis, Dr. Schulman explained that commission rates were uniformly high because of the cooperative compensation rule, without which a seller would not pay the commission of the buyer’s broker.”
Bough also noted that the court felt that the plaintiffs’ trial testimony also showed this, as well as the predominance of the law over any arguments regarding uninjured class members.
“We are aware of the recent order entered by the court. While it preceded our reply deadline which was set for April 9th we are focused on the remaining motions before the court, including our Motion for a New Trial and Motion for Judgment as a Matter of Law,” spokesperson for HomeServices of America wrote in an email. “We will be filing our reply briefs on those motions by the deadline set by the court, which is currently April 23rd.”
HomeServices of America still has a writ of certiorari out with the U.S. Supreme Court, which it filed in early February. In its filing, HomeServices asked for a review of an August 2023 ruling by the Eight Circuit Court, which found that HomeServices could not enforce arbitration agreements signed by seller clients of its franchisees. The appeals court said that this was because the contracts signed by the sellers were not directly signed by HomeServices.
