Court refuses to pause eXp case citing 'questionable behavior'
Judge Stephen Bough said discovery could continue into whether deals reached by eXp and Weichert with the Hooper plaintiffs constituted a "reverse auction."
Calling the deal eXp made with plaintiffs in another case "questionable behavior," the judge overseeing the Gibson/Umpa lawsuit denied a request to pause proceedings in the brokerage's commissions litigation.
U.S. District Court Judge Stephen Bough said in a Nov. 14 filing that given the alleged lack of financial considerations and the quick settlement reached between eXp and plaintiffs in the Hooper case, "granting a stay would not serve in the best interests of justice."
"It is well within the Court's power to continue this case and allow further discovery into whether a reverse auction occurred in the Hooper settlement," Bough wrote in the filing, referring to the practice of seeking out plaintiffs who will make a more favorable deal.
How we got here: In a statement, eXp said that it mediated unsuccessfully with the Gibson plaintiffs in April.
"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," an eXp spokesperson said in an email statement.
Plaintiffs in the Gibson case filed an objection to that settlement on Oct. 22, arguing that eXp used a "reverse auction" — suggesting that they had shopped around to get the best deal rather than continuing to negotiate a settlement with the Gibson plaintiffs.
The original agreement: An Oct. 1 filing revealed that eXp agreed to a $34 million settlement with the plaintiffs in the Hooper case in Georgia after it said it couldn't reach an agreement with the plaintiffs in the Gibson/Umpa case in Missouri.
Attorneys for the Gibson plaintiffs argued that the Hooper attorneys did not consider eXp's financials when negotiating a settlement.
"That is a stunning admission and explains why, at least in part, eXp was able to secure an improper sweetheart deal that is not fair or reasonable to the class," Gibson attorneys wrote in the Oct. 22 filing.
What about Weichert? Bough also ordered that discovery continue in the Weichert Realtors settlement because it had been reached "under similar unclear circumstances." Weichert reached an agreement with the Hooper plaintiffs last week but damages were not immediately disclosed.
Real Estate News has also reached out to Weichert for comment.