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EXp Realty suffered a legal setback Thursday when a judge overseeing a Missouri commission lawsuit refused to pause the case while the brokerage pursues a controversial deal in another court.
In a new legal filing, U.S. District Court Judge Stephen Bough declined eXp’s request for a “stay” — or, a pause — in the Gibson commission lawsuit. EXp had asked for a stay in the case after reaching a settlement in another, lesser-known commission lawsuit known as Hooper.
“The Court finds that Plaintiffs raise genuine issues of potentially questionable behavior regarding eXp’s Hooper settlement which warrant further discovery in this case,” Bough wrote in the filing.
News of the ruling was first reported by Real Estate News.
In a statement to Inman eXp said that it “mediated unsuccessfully with the Gibson plaintiffs in April 2024. Separately, and nearly six months later, eXp mediated with the Hooper plaintiffs and reached a settlement that we are confident will be found to be fair, reasonable and adequate and was not a product of any so-called reverse auction.”
At issue is eXp’s Hooper settlement, announced in early October, that would see the brokerage pay $34 million. Weeks later, homeseller-plaintiffs in the Gibson case criticized the settlement as a “sweetheart” deal. They argued that eXp used a strategy known as a “reverse auction” — something that basically amounts to a defendant shopping around among similar class action lawsuits to find the lowest settlement price — to reach the agreement.
The Gibson plaintiffs wanted to force eXp back to the negotiating table in their case — something eXp’s request for a stay could have prevented.
For its part, eXp defended the deal in a court filing last week, saying that there’s no rule forcing it to negotiate with the Gibson plaintiffs.
Judge Bough, however, was apparently not convinced that the matter was settled.
In his ruling Thursday, he quoted from previous case law to argue that “reverse auctions require a ‘collusive element’ where ‘ineffectual lawyers are happy to sell out a class.'” Bough also wrote that “given the alleged lack of financial considerations and quick settlement in the later-filed Hooper case, granting a stay would not serve in the best interests of justice.”
The ruling means that the parties in the Gibson case can conduct discovery, or investigate, whether eXp did in fact use a reverse auction to strike the Hooper deal.
The ruling also applies to Weichert Real Estate Affiliates, which followed eXp’s lead last week and settled in the Hooper case.
Read the full ruling here (if the document doesn’t appear, refresh the page):
Update: This story was updated after publication with a statement eXp provided to Inman.
