HomeServices asks the Supreme Court to review Sitzer-Burnett ruling

by Emily Mack

Back in October, HomeServices of America was one of two major brokerages found liable of conspiring to inflate commissions. Now, the Berkshire Hathaway affiliate is asking the U.S. Supreme Court to review a ruling related to the case.

The ruling in question occurred in August 2023, months before the final verdict in the now-famous Sitzer-Burnett trial. In that case, the U.S. Court of Appeals for the Eighth Circuit affirmed a lower district court’s ruling that the dispute should go to trial rather than arbitration. The appellate court said HomeServices could not enforce arbitration agreements signed by its franchisees’ seller clients, because those were not directly with HomeServices.

That decision paved the way for the eventual Sitzer-Burnett verdict which called for HomeServices, as well as co-plaintiffs National Association of REALTORS® (NAR) and Keller Williams, to pay a combined $1.78 billion in damages to affected homesellers. The decision threatens the industry-standard commissions for buyers’ agents, as similar lawsuits were quickly filed around the country.

However, on Feb. 2, HomeServices filed a petition with the highest court in the land requesting that the justices review that August ruling. Subsidiary companies BHH Affiliates, LLC and HSF Affiliates, LLC are co-petitioners.

“Our appeal is rooted in the principles of the Federal Arbitration Act, which clearly mandates that arbitration agreements be honored as they are written, including clauses that delegate interpretative authority to arbitrators,” HomeServices Executive Vice President Chris Kelly said in a statement. “This appeal highlights a substantial inconsistency among circuit courts regarding the interpretation of arbitration agreements and delegation clauses.”

It’s worth noting, though, that the Supreme Court hears less than 5% cases submitted for review each year.

HomeServices’ filing comes one day after Keller Williams agreed to pay $70 million as part of a proposed settlement aiming to resolve more than a dozen pending buyer-commissions-based lawsuits. Real estate parent companies Anywhere Real Estate and RE/MAX reached comparable settlements prior to the Sitzer-Burnett verdict.

NAR, meanwhile, has yet to officially appeal, although the association continually expresses intent to do so.

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