Judge explains the ‘why’ of rulings on settlements, attorney fees 

The first wave of commissions settlements have been approved — with minimal drama during the brief hearing on May 9. 

Anywhere, RE/MAX and Keller Williams can now put the commissions litigation behind them, and for other firms going through the settlement process, U.S. District Court Judge Stephen Bough's detailed post-hearing summary provides some insight into how future proceedings might unfold.

In the 40-page filing, Judge Bough addressed objections, attorney fees — which total around one-third of the settlement fund — and the court's discretion in determining who can be included in the plaintiff class. 

Batton objections did not sway the judge

In the final hours before the hearing, plaintiffs in the Batton cases, which centers on alleged damage done to homebuyers, not sellers, asked for an injunction and restraining order to delay the settlement hearing. That motion was denied by U.S. District Court Judge Andrea Wood.

The Batton plaintiffs had argued that the defendants in the settlements didn't disclose a plan to claim immunity from Batton homebuyers who also sold a home (and would thus be included in the seller settlement class) until May 3, six days before the final approval hearing.

In turning away the objection, Bough noted that when approving a proposed settlement, "courts regularly certify broader classes and release broader claims than those originally pleaded in the action."

In allowing the inclusion of Batton class members, he also pointed out that the claims in Batton mirrored those brought by sellers, as both sets of plaintiffs allege a conspiracy to keep commission costs high.

"And, of course, if a homeseller believed that they would be better off by opting out of the settlement to be able to pursue additional buyer claims, they were entitled to do so," Bough wrote, referring to the opt out option that expired on April 13.

There were 12 objections filed ahead of the hearing, and 61 opt-outs received before the April 13 deadline.

Pulte argument 'without merit'

Judge Bough also addressed an objection from national homebuilder PulteGroup, which had raised concerns about needless and time-consuming paperwork for sellers who sold multiple homes, and said the settlement amount wasn't clear.

Bough said the paperwork objection was meritless, adding that counsel had submitted evidence that they have worked with those who want to submit multiple claims.

As for the vagueness around the settlement amount, Bough said courts have repeatedly held that parties do not need to include a detailed allocation formula in the class notice.

"It is particularly appropriate to defer creation of an allocation plan when, as here, there are multiple defendants, only some have settled, and additional settlements may add to the fund to be distributed," Bough said.

Copycats are out of luck

Some of the plaintiffs in copycat cases filed after the Sitzer/Burnett verdict also objected to the settlement, indicating they wanted to continue pursuing action against the settling defendants. 

Bough dismissed this objection, writing that tossing out a resolution that resulted in certainty and practice changes would result in "protracted and costly piecemeal litigation, the risk of inconsistent results and a redo of the last five years of litigation on a state-by-state basis."

Attorneys can claim millions in fees

Judge Bough approved the proposed attorney fees, which amount to roughly one-third of the settlement funds.

In arguing that the fee amount was fair, Bough noted that plaintiff attorneys spent nearly $13 million on litigation costs without any guarantee of payment.

"Moreover, this case faced low odds of early settlements given the attack on practices that were central to the real estate brokerage industry," Bough wrote.

Since antitrust claims are especially complex, expensive and difficult to prosecute, other courts have recognized these settlements should result in attorneys' fees equal to one-third of the fund, he said.

"It is undeniable that the antitrust claims at issue in these cases were challenging to prosecute," Bough said, noting that no fewer than 20 law firms were used by defendants. "This weighs heavily in favor of the requested award."

30 million claim notices distributed

Judge Bough also gave an update on the status of settlement claims sent to class members. Of the 30 million notices sent out, fewer than 200,000 claims had been filed by early May. Home sellers still have almost a year to file a claim, however. The deadline is May 9, 2025.

Return rates on class action settlements are usually under 10%, with many under 1%, according to a study referenced in Judicature, a legal journal published by Bolch Judicial Institute at Duke Law School.

So how much will class members actually receive? There are still too many unknowns to pinpoint an exact figure, but the range could be in the tens, to hundreds, of dollars. For example: If two-thirds of the $208.5 million in approved settlement funds is available to class members after deducting attorney fees — and 3 million claims (10%) are returned — class members could expect to receive around $46. If only 1% of claims are returned, that jumps to $463. 

But if all pending settlements are approved — including $418 million from NAR and $250 million from HomeServices of America, as well as smaller damage amounts from several other brokerages — the fund could be in the $1 billion range, providing claimants with a more meaningful return.