In a bold move to shake off the echoes of a $1.8 billion federal jury decision, the National Association of Realtors, Keller Williams, and Berkshire Hathaway entities are pushing for a judicial reversal. This comes in response to Missouri-based home sellers’ claims of artificially inflated real estate commissions, a verdict that has sent shockwaves through the industry.
The consortium, led by Warren Buffett’s Berkshire Hathaway, presented their case before U.S. District Judge Stephen Bough in Kansas City, Missouri, urging him to nullify the jury’s decision or order a new trial. The October 31 ruling, which favored a class of home sellers alleging overcharged commissions, has triggered a wave of litigation across the nation.
In their legal filings on Monday, the defendants argued that the evidence in the Missouri case lacked sufficient support for the verdict. Furthermore, they contended that the judge had misapplied the legal standard in instructing the jury before deliberations.
“The result of the trial in this case defies precedent, logic, and the evidence,” asserted attorneys for the Chicago-based realtors association in a statement, emphasizing their objection to the verdict’s foundation.
Keller Williams echoed their sentiments, deeming the verdict “disturbing” and attributing its existence to “baseless copycat suits” that have proliferated in the wake of the decision.
Plaintiffs’ attorneys, however, dismissed the defense’s stance as a mere repetition of arguments already defeated in the trial. Michael Ketchmark, an attorney for the plaintiffs, confidently declared, “There is zero concern on our side of the table. We will win the expected appeal and bring an end to this price fixing once and for all.”
The core of the home sellers’ lawsuit alleged a conspiracy between brokerages and the real estate association to inflate the commission paid to buyers. This commission, governed by the “buyer broker commission rule,” can reach up to 6% of the house’s price, distributed between the agents representing the buyer and seller.
The realtors association countered the claims, stating that the rule merely serves as a disclosure requirement and does not dictate commission rates.
Theodore Boutrous of Gibson, Dunn & Crutcher, representing HomeServices, criticized the verdict as “misguided and excessive” in a statement.
If Judge Bough rules against them, the defendants have the option to separately appeal to the 8th U.S. Circuit Court of Appeals in St. Louis.
The case, officially titled Rhonda Burnett et al v. The National Association of Realtors et al, is being closely watched as the real estate industry grapples with the implications of rising commission-related litigation.
