The company’s request to suspend one case and conclude a deal on another was just denied. The denial highlights a controversy surrounding a payment method known as “reverse auction.”
Whether you’re refining your business model, learning new technology, or finding a strategy to take advantage of the next market boom, Inman Connect New York prepares you to take bold steps. The next chapter is about to begin. Please join us. Join us and thousands of other real estate leaders from January 22-24, 2025.
Weichert faced a roadblock Thursday in its efforts to settle a commission lawsuit, with a judge suspending one lawsuit and blocking the company’s attempts to seal a deal in another.
The move highlights ongoing controversy and unanswered questions about the new payment method used by eXp Realty, whose effectiveness is still uncertain.
What happened was that Weichert Real Estate Affiliates was seeking a “stay” or moratorium on a high-profile antitrust case known as Gibson. The company wanted to stop because it reached a settlement in a little-known lawsuit called the Hooper case.
But on Thursday, the judge presiding over Gibson’s case refused to grant Weichert a suspended sentence. In a five-page order, the judge wrote that the home sellers and plaintiffs who opposed the injunction in Gibson’s case “raise real issues of potentially questionable conduct with respect to Mr. Weichert’s Hooper settlement, and this case raises genuine questions of potentially questionable conduct.” It is necessary to disclose evidence.”
“Given the alleged lack of financial consideration and prompt resolution in the later Hooper case, the plaintiffs’ claims in this case are barred by binding law, resulting in irreparable harm. “It is not in the interest of justice to grant a stay because it may result in an underfunded class settlement in Hooper,” the judge also wrote.
The judge’s order was not necessarily unexpected.
Mr. Weichert’s move to resolve the Hooper lawsuit follows the example of eXp, which did the same thing in early October. EXp later also sought a stay in the Gibson case, but was denied in November. Unable to get the desired respite, Weichert finds himself once again in eXp’s footsteps.
At issue in both settlements is a method the Gibson plaintiffs described as a “reverse auction.” Essentially, this method involves defendants shopping around among similar class actions to find the cheapest settlement. The plaintiffs specifically accuse eXp of obtaining a “sweetheart” deal and want to force the company back to the negotiating table.
Meanwhile, eXp defended the settlement, saying in a court filing that there would be no negative impact in suspending the Gibson case while the court overseeing the Hooper case considers the agreement.
In Weichert’s case, the company filed court documents Tuesday saying it needed to suspend the Gibson case because it must now go through “extensive and burdensome discovery” with the plaintiffs in the case. . The company also wrote that it would be “unfairly prejudiced if it had to continue to expend resources on jurisdictional issues that would be at issue if the settlement were approved.”
Mr. Weichert also argued in Tuesday’s filing that accusations that he used a “reverse auction” to close the deal are “totally unfounded.”
But U.S. District Judge Stephen Baugh was apparently unpersuaded, and in a Thursday order denying Weichert’s request for a stay, he ordered the company and the plaintiffs to continue the Gibson lawsuit.
“Pursuant to the court’s previous order, Weichert and plaintiffs are ordered to engage in discovery regarding the timing and circumstances of Weichert’s settlement with Hooper,” Baugh wrote.
It remains to be seen where Weichert and eXp’s settlement will go next. But the situation highlights the ongoing uncharted waters Commission case and what methods companies can use to resolve the myriad of similar antitrust cases. It raises questions about.
Read the judge’s order denying Mr. Weichelt’s stay request here (if you don’t see the document, please refresh the page).
Email Jim Dalrymple II
