HousingWireHousingWire
The Gibson commission lawsuit plaintiffs are not done sharing their thoughts on the settlements reached by Mark Spain Real Estate, eXp World Holdings, Weichert of North America and Atlanta Communities Real Estate Brokerage in the Hooper suit.
In a response filed on Wednesday to a joint motion for preliminary approval of the settlements, the Gibson plaintiffs, who have intervened in the Hooper suit, reiterated their claims that eXp and Weichert conducted a “reverse auction” to obtain their settlements.
The Gibson plaintiffs believe this behavior is “a well-known abuse of the class action device that precludes approval of a class action settlement.”
“Intervenors negotiated with eXp and Weichert for months, including in mediation. Intervenors refused to accept eXp’s and Weichert’s lowball offers, so eXp and Weichert secretly sought out more pliable counsel. eXp and Weichert chose plaintiffs and counsel in far less advanced litigation—Plaintiffs and their counsel here—who have done nothing to litigate this stayed case and who have undertaken little investigation and no discovery,” the filing states.
“eXp and Weichert also chose counsel who—unlike Intervenor Counsel—have zero experience litigating the claims at issue. All the while, eXp and Weichert deliberately kept Plaintiffs, Intervenors, and the mediators involved in the dark about the competing settlement offers. The reason is plain enough: to create a blind bidding war. eXp and Weichert then selected the lowest bidder—Plaintiffs—and settled for far less than they can reasonably pay.”
The Gibson plaintiffs claim that the alleged reverse auctions are “the antithesis of the good faith, procedurally untainted negotiations,” which settlements are required to have. Additionally, they claim that the monetary relief the defendants have agreed to is inadequate, that the proposed class is not adequately represented by the “ineffective plaintiffs” of their counsel and that the proposed notice plan is “fundamentally flawed.”
In their settlements, the four brokerage defendants have agreed to business practice changes, as well as total payments of $44.05 million. Mark Spain Real Estate would pay $750,000, eXp World Holdings $34 million, Weichert of North America $8.5 million and Atlanta Communities Real Estate Brokerage $800,000 as part of the settlements.
In January, Judge Stephen R. Bough, who oversaw the Sitzer/Burnett trial and is also overseeing the Gibson suit, ruled after oral arguments that eXp must turn over all documents related to the negotiation of its settlement by Jan. 15. This was the second time Judge Bough asked eXp to turn over documents related to its settlement negotiations. In November, eXp asked for a stay in the Gibson suit, due to its pending settlement in the Hooper suit, but Judge Bough ruled that he would need to conduct a review of the Hooper documents, in order to determine whether or not a reverse auction occurred and if a stay is appropriate.
