HomeServices Needs US Supreme Court docket To Weigh Sitzer | Burnett Case
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The final actual property franchisor standing in a bombshell antitrust lawsuit often called Sitzer | Burnett needs to take its case to the best courtroom within the land.
On Friday, Feb. 2, HomeServices of America filed a petition to the U.S. Supreme Court docket for a “writ of certiorari,” asking the courtroom to assessment an August ruling by the U.S. Court docket of Appeals for the Eighth Circuit affirming a decrease district courtroom ruling that HomeServices can’t implement arbitration agreements signed by vendor purchasers of its franchisees as a result of the contracts the sellers signed weren’t immediately with HomeServices.
That ruling cleared the best way for HomeServices and two of its subsidiaries, BHH Associates and HSF Associates, to be tried as defendants in a three-week trial in October — a trial HomeServices says ought to by no means have occurred as a result of the homeseller plaintiffs signed arbitration agreements waiving their proper to pursue class motion litigation.
That trial resulted in a historic verdict by which a jury discovered that Keller Williams, RE/MAX, Anyplace, the Nationwide Affiliation of Realtors, HomeServices, BHH Associates and HSF Associates, conspired to inflate dealer fee charges paid by homesellers. The jury awarded $1.78 billion in damages to a category of roughly 500,000 Missouri householders. If that award stands, it will be trebled by regulation to greater than $5.3 billion.
In accordance with the petition, the query HomeServices needs the Supreme Court docket to resolve is who decides — the arbitrator or the courts — whether or not an entity that didn’t signal an arbitration settlement can implement it when the settlement says it will be as much as the arbitrator.
“The Eighth Circuit’s faulty choice to usurp the arbitrator’s authority subjected HomeServices to an unwarranted class trial and a ensuing jury verdict of $1.8 billion,” the petition reads.
“That trial ought to by no means have occurred as a result of the plaintiffs are required to arbitrate their claims — and their arguments opposing arbitration should be resolved by the arbitrator, not a courtroom.”
The circuit courts are break up on the petition’s query, in accordance with the submitting. The First, Second, Third and Sixth Circuits have held that the courtroom should go away the query of arbitrability — whether or not one thing could be arbitrated — to the arbitrator whereas the Fourth, Fifth, Eighth and Ninth Circuits have stated the courtroom could resolve the query of arbitrability for itself, even when the contract has delegated that concern to the arbitrator, the petition stated.
The petition is an extended shot, however that circuit break up could tip the scales in its favor. In accordance with the federal government, 4 of the 9 justices on the Supreme Court docket should vote to just accept a case and the courtroom solely accepts a tiny proportion of the instances it’s requested to assessment every year: 100-150 of greater than 7,000 instances. The courtroom often solely agrees to listen to a case if it “may have nationwide significance, may harmonize conflicting selections within the federal Circuit courts, and/or may have precedential worth.”
Requested why HomeServices believes its arguments can be extra profitable in entrance of the Supreme Court docket than they have been earlier than the appeals courtroom, HomeServices Government Vice President Chris Kelly highlighted the blended rulings by circuit courts.
“Our attraction is rooted within the rules of the Federal Arbitration Act, which clearly mandates that arbitration agreements be honored as they’re written, together with clauses that delegate interpretative authority to arbitrators,” Kelly instructed Inman in a press release.
Chris Kelly
“Within the Sitzer-Burnett case, the courtroom took upon itself the function of decoding the arbitration settlement, a call we imagine was opposite to the Act’s stipulations. This attraction highlights a considerable inconsistency amongst circuit courts concerning the interpretation of arbitration agreements and delegation clauses.”
“By bringing this concern earlier than the Supreme Court docket, we goal not solely to hunt a decision for this particular case however given the break up among the many circuit courts, additionally to make sure the uniform utility of the Federal Arbitration Act nationwide, thereby preserving the integrity and supposed operate of arbitration agreements,” Kelly added.
Sitzer | Burnett was initially filed in 2019 and received class-action standing in April 2022. The go well with alleges that some NAR guidelines — together with one which requires itemizing brokers to supply purchaser brokers a fee with the intention to listing a property in a Realtor-affiliated a number of itemizing service — violate the Sherman Antitrust Act by inflating vendor prices.
Anywhere, RE/MAX and Keller Williams have all had proposed settlements within the Sitzer | Burnett case preliminarily authorized by the U.S. District Court docket in Western Missouri, the latter on Thursday. Subsequently, NAR, HomeServices of America, BHH Associates and HSF Associates, are the remaining defendants within the case.
Kelly stated HomeServices doesn’t know when the Supreme Court docket will make its choice on whether or not to grant the petition. Requested whether or not HomeServices plans to settle the case if its petition shouldn’t be granted, Kelly stated, “HomeServices stays dedicated to resolving this and the opposite instances in a way that finest protects the customers we serve.”
Michael Ketchmark
Reached for remark, Michael Ketchmark, lead counsel for the plaintiffs in Sitzer | Burnett, instructed Inman, “Now we have reviewed House Companies’ filings and we really feel assured within the underlying choice by the Eighth Circuit.”
