Whether it’s refining your business model, mastering new technologies, or discovering strategies to capitalize on the next market surge, Inman Connect New York will prepare you to take bold steps forward. The Next Chapter is about to begin. Be part of it. Join us and thousands of real estate leaders Jan. 22-24, 2025.
Law firms for homeseller plaintiffs who sued real estate industry companies and the National Association of Realtors spent 105,000 hours over five years battling high-profile defense attorneys and are now entitled to recoup payments, according to a new filing in a case known as Gibson.
Lawyers representing homeseller plaintiffs seek one-third of the $110.6 million raised from the proposed settlements of nine of the biggest real estate firms in the country — or $36.87 million, plus about $200,000 in remaining expenses that haven’t already been recovered, according to paperwork filed Tuesday.
TAKE THE INMAN INTEL INDEX SURVEY FOR AUGUST
The plaintiffs had previously said they agreed to the amount, and trial lawyers have signaled they will seek it from $987.1 million recovered so far in real estate antitrust cases. The filing provided an in-depth look at the potential payday for the trial attorneys who spent half a decade challenging the real estate industry over business practices that plaintiffs said amounted to an illegal conspiracy to inflate broker commission rates paid by homesellers.
“Class Counsel are a diverse group of well-respected antitrust, complex litigation, and trial lawyers who spearheaded the litigation,” the attorneys wrote in the filing. “In doing so, Class Counsel were not able to rely on any governmental prosecutions or on preexisting litigation by other private attorneys.”
“These Settlements are the independent product of their wholly contingent, risky, costly, and time-intensive work seeking a recovery against Defendants, not the work of anyone else,” they wrote.
The payment is only for the court case known as Gibson, which was combined in April with another case called Umpa. It is separate from the total amount recovered through other litigation, including cases known as Sitzer | Burnett and Moehrl. Gibson was filed in a court in Missouri just minutes after the jury in Sitzer | Burnett, issued its verdict against the real estate defendants, including the National Association of Realtors.
In total, real estate defendants have proposed at least $987.1 million in monetary relief to settle the litigation. The trial attorneys will seek to recover one-third of the entire settlement amount, or about $329 million, plus expenses, according to the filing.
The filing claims attorneys spent more than 105,000 hours and paid over $13 million in out-of-pocket costs “without any guarantee of success” while arguing the handful of lawsuits.
“Class Counsel faced substantial risk representing the Settlement Class,” the filing says, later adding that attorneys “faced off against well-funded and entrenched opponents represented by at least thirty of the most high-profile defense firms in the country.”
The defendants who have settled in Gibson are:
- Compass: $57.5 million
- The Real Brokerage: $9.25 million
- Realty ONE Group: $5 million
- At World Properties: $6.5 million
- Douglas Elliman: $7.75 million
- Redfin: $9.25 million
- Engel & Volkers: $6.9 million
- HomeSmart Holdings: $4.7 million
- United Real Estate: $3.75 million
To prevail in the lawsuit, plaintiff attorneys reviewed millions of pages of documents, retained 20 experts and consultants and conducted about 180 depositions in the lawsuits, they said.There were more than 2,400 docket entries in the four cases related to Gibson.
“Prior to filing these actions, class counsel undertook significant research into the Settling Defendants, their participation in NAR, their enforcement of the Mandatory Offer of Compensation Rule, and their market share and presence,” the attorneys wrote.
The attorneys said in their filing that the Eighth Circuit has previously found that attorneys fees between 25 percent and 36 percent are appropriate for class action lawsuits.
The attorneys said that the amount of work they put into the cases was worth even more than the amount they’re looking to recoup, saying their “lodestar” was closer to $90.8 million. They said they also passed up work that was less risky while prosecuting the cases.
They’re also asking for $13.1 million in expenses they said they incurred for all of the settlements, of which $12.9 million has already been awarded by the court in the Sitzer | Burnett case. Approximately $200,000 in remaining expenses will be recouped by the law firms below:
- Ketchmark and McCreight
- Williams Dirks Dameron
- Cohen Milstein Sellers & Toll
- Hagens Berman Sobol Shapiro
- Susman Godfrey
“The Settlements are more than a large financial recovery for the class,” attorney Eric Dirks wrote. “The practice change relief set out in the Settlements is a substantial victory for class members and, in my opinion, will ultimately result in cost savings for future home sellers.”
The practice changes included a requirement that buyer agents obtain a signed contract before touring homes with clients. The contract must spell out the compensation the buyer broker intends to charge for their services. Offers of compensation were also removed from multiple listing services as part of the changes. Sellers can still choose to pay buyer broker fees.
Partners at Dirks’ law firm earn an hourly rate of $1,250. Paralegals earn $300 per hour. Associates, one of whom spent over 2,000 hours working on the cases, earn $600 per hour, according to the filing.
Lead plaintiffs’ attorney Michael Ketchmark’s rate is higher. In a filing outlining his firm’s costs and expenses, Ketchmark wrote that he spent just under 7,000 hours on all of the cases. At a rate of $1,450 per hour, his total time spent is valued at $10.1 million.
Ketchmark’s rate isn’t the highest among the attorneys involved in the case. That title belongs to Marc Seltzer of Susman Godfrey, whose hourly rate is $2,200.
The court has yet to approve the proposed settlements involved in the Gibson case. The final approval hearing for the Gibson settlements is Oct. 31.
