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The attorneys who won settlements from major real estate franchisors Anywhere, Keller Williams and RE/MAX in the antitrust commission suits known as Sitzer | Burnett and Moehrl are asking a federal court for a hefty sum for their trouble: $82 million.
On Feb. 29, attorneys from the three law firms that are representing the Sitzer | Burnett plaintiffs — Williams Dirks Dameron, Boulware Law and Ketchmark & McCreight — filed a motion in the U.S. District Court in Western Missouri for attorneys’ fees and costs on behalf of their firms and the eight law firms that are working on the Moehrl case: Hagens Berman Sobol Shapiro, Cohen Milstein Sellers & Toll, Susman Godfrey, Handley Farah & Anderson, Teske Law, Justice Catalyst Law, Wright Marsh & Levy, and Gustafson Gluek.
According to the motion, the law firms worked on a contingency basis for more than five years, racking up a combined nearly 96,500 hours of labor (adding up to more than $80 million if the firms had been charging their usual hourly rates) and nearly $13 million in out-of-pocket costs to file and prosecute the two suits through the date of the Keller Williams settlement and have yet to be paid anything.
They are asking for a third of the combined $208.5 million settlement fund ($69.5 million) plus reimbursement for those out-of-pocket costs, adding up to $82.4 million, or 39.5 percent of the total settlement funds.
“Class Counsel faced large risk representing the Settlement Class,” the attorneys wrote in the motion.
“They did so despite this case having no roadmap or pre-established path to a recovery. Indeed, far from any guarantee that they would be paid for their work or reimbursed their expenses, Class Counsel faced off against well-funded and entrenched opponents represented by at least twenty of the top defense firms in the country.”
Sitzer | Burnett was originally filed in 2019 and won class action status in April 2022. Moehrl, which names the same defendants, was also filed in 2019 and got class certification in March 2023.
Sitzer | Burnett went to trial in October. On Oct. 31, in a historic verdict, a jury found that Keller Williams, RE/MAX, Anywhere, the National Association of Realtors, HomeServices of America and two of its subsidiaries, BHH Affiliates and HSF Affiliates, conspired to inflate broker commission rates paid by homesellers. The jury awarded $1.78 billion in damages to a class of approximately 500,000 Missouri homeowners. If that award stands, it would be trebled by law to more than $5.3 billion.
Anywhere and RE/MAX settled before the Sitzer | Burnett trial, for $83.5 million and $55 million, respectively. Keller Williams settled on Feb. 1 for $70 million. Those settlements have received preliminary approval from the court, but not final approval.
“Class Counsel performed a massive amount of legal work leading to the Settlements, including more than 100 motions and responses, such as motions to dismiss, motions to transfer, motions to stay, motions to compel arbitration (and related appeals), class certification, Rule 23(f) appeal petitions, summary-judgment motions, Daubert motions, trial motions, and over 180 depositions,” the motion says.
The motion also stressed that the law firms’ work on Sitzer | Burnett and Moehrl prevented them from taking on other work.
“That was time and money spent and invested on behalf of the Settlement Class that could have been spent on less risky cases, where liability or damages were more certain, or where the claims had been advanced by previous litigation, government prosecutions or public admissions,” the motion said.
“And even after a trial victory, risks remain given the Defendants’ stated inability to pay a judgment – not to mention any risks on appeal.”
Michael Ketchmark
In a phone interview, Michael Ketchmark, lead counsel for the Sitzer | Burnett plaintiffs, emphasized the “huge risk” the law firms took.
“That’s one thing that people don’t focus on is that you have all these law firms putting massive amounts of time and money in this and had the jury returned a verdict against us, there’s no way in the world that we would be in the position we’re in,” Ketchmark told Inman.
“Keller Williams would have never come to the table. Without the threat of that trial looming, and that obviously correct belief in RE/MAX and Anywhere that things weren’t going to go well, they never would have settled. It’s because you have law firms that are willing to step up and put the time and money and resources behind this to hold companies like this accountable, and that’s the reality of it.”
According to Ketchmark, the attorneys’ motion pertains solely to the amounts the law firms are asking for in regard to the three proposed settlements, not in regard to the cases overall.
“If there’s additional money that’s collected by way of judgment or additional settlements, the law allows us to make additional fee applications,” he said.
According to the motion, an award of attorneys’ fees representing one-third of the settlement fund and their case expenses has “well-established precedent” and is considered “customary.”
“In the Eighth Circuit, a fee based on a percentage of the fund recovered is the favored approach for calculating attorney’s fees in contingent representation, including class actions,” the motion says.
“Such a fee provides an incentive for attorneys like Class Counsel to pursue claims for those whose individual claims are otherwise too small to justify the costs of litigation. And a percentage-based recovery allows individuals without the means to pay counsel by the hour to nonetheless assert their claims.
“A percentage-based recovery also aligns Class Counsel’s interests with those of their clients because the greater the recovery Class Counsel obtains, the greater the fee to which Class Counsel is entitled.”
The filing emphasized that the attorneys were not asking for additional fees for “significant injunctive relief” they obtained from the settlements, which included requiring the franchisors not to mandate Realtor membership and to train their agents that commissions are negotiable, among other provisions.
Some in the real estate industry have objected to the law firms asking for a “customary” fee when they are suing NAR and franchisors for allegedly stabilizing commissions at between 2.5 percent and 3 percent.
But there’s “zero comparison between the two,” according to Ketchmark.
“There’s a difference between a fee application where the court comes in and reviews an amount and approves an amount and conspiring with your competitors to set your wages,” he said.
“We’re asking the judge to approve the amount under the law. We didn’t ask the defendants in this case to agree to pay a commission before the trial or pay a contingency before the trial.”
The motion asks the court to award the named plaintiffs $15,000 for representing the settlement class, or $25,000 if they testified at the Sitzer | Burnett trial. How much unnamed plaintiffs in the settlement class receive after the attorneys get their cut is unknown.
“It’s hard to answer that question in a vacuum because it’s dependent upon how much the court approves and the next question is how much is left over,” Ketchmark said. “And then the next really big piece of this mathematical question is how many people submit claims. That’s how that money is divided.”
“I would expect a substantial amount of money would be returned to the class members,” Ketchmark added. “Our hope and our belief and our goal is these are the first three of what will end up being numerous settlements as well as collecting this judgment. And that will result in a tremendous return of money to people that was wrongfully taken from them.”
Read the motion:
