Court denies motions to dismiss Gibson commission lawsuit

You can’t win them all. After successfully being dismissed from the Moratis commission lawsuit in Pennsylvania, Hanna Holdings, the parent company of Howard Hanna Real Estate Services, was not as fortunate in the Gibson commission lawsuit.

On Monday, Judge Stephen R. Bough — who also oversaw the Sitzer/Burnett suit — denied motions to dismiss the Gibson suit that were filed by several defendants. These include Howard Hanna, William Raveis Real Estate Inc., Crye-Leike Inc., Berkshire Hathaway Energy Co., Weichert Real Estate Affiliates, Real Estate One Inc., eXp World Holdings, eXp Realty, Illustrated Properties, William L. Lyon & Associates Inc. and Windermere Real Estate Services Co. Inc.

While the defendants cited various reasons for why the court should dismiss the suit, most cited lack of personal jurisdiction and improper venue. None of the brokerage defendants are headquartered in Missouri, and they argue that the plaintiffs have failed to state a claim.

In his ruling, Bough acknowledged that the defendants “argue that they have insufficient minimum contacts with Missouri to support a finding of personal jurisdiction that satisfies due process.” But he ultimately sided with the plaintiffs, noting that three of them sold homes in the district and were required to offer commissions to buyers brokers in order to list their properties on the MLS.

“Broadly, Plaintiffs have plausibly established that a ‘substantial part of the events’ giving rise to the claim occurred with three of the four named Plaintiffs selling homes within this District where they were injured by the mandatory Challenged Rules which all Defendants enforced,” the ruling states. “Accordingly, venue is proper in the Western District of Missouri under § 1391 and the Court has personal jurisdiction over Defendants.”

In regard to the defendants’ assertion that the plaintiffs have failed to state a claim, Bough wrote that in reviewing the conspiracy elements of the plaintiffs’ claims, he believes they have satisfied the necessary pleading requirements.

“Plaintiffs’ assertion that Defendants agreed to carry out the National Association of Realtors’ (NAR) allegedly anticompetitive policies is adequately supported by factual allegations regarding both the substance and nature of their purported agreement,” Bough wrote.

“Plaintiffs present facts showing the terms and effects of the alleged horizontal agreement and the methods allegedly used by Defendants to uphold and perpetuate it. In turn, Plaintiffs’ allegations plausibly suggest the franchisees, subsidiaries, and agents of each Defendant knew of, complied with, participated in, and benefitted from the Challenged Rules.”

Of the defendants impacted by Bough’s ruling, only Weichert and eXp have settled the commission lawsuits. But the two brokerage defendants chose to settle with the Hooper suit plaintiffs in Georgia, much to the ire of the Gibson plaintiffs, who have filed a motion to intervene.