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The defendants fighting a multibillion-dollar jury verdict that could upend the real estate industry are recruiting some heavy-hitters to make their case to a higher court, including two former U.S. solicitors general.
The parties have also settled on a schedule for post-trial motions that delays a final judgment in the case until the spring.
Real estate franchisor Keller Williams, which boasts more than 187,000 agents in its ranks, has hired Paul D. Clement of Clement & Murphy, who served as former U.S. solicitor general of the U.S. between 2005 and 2008 and has argued more than 100 cases before the U.S. Supreme Court.
“Widely recognized as one of the top appellate attorneys in the United States, Clement’s extensive experience representing clients across diverse, high-profile cases of national significance is unparalleled and well-matched for this high-stakes appeals process,” Keller Williams spokesperson Darryl Frost said in a statement.
On Oct. 31, after less than two and a half hours of deliberations, a Kansas City jury in a case called Sitzer | Burnett found Keller Williams, the National Association of Realtors, Anywhere (formerly, Realogy), RE/MAX, HomeServices of America and two of its subsidiaries, BHH Affiliates and HSF Affiliates, conspired to inflate broker commission rates paid by homesellers, awarding the plaintiffs nearly $1.8 billion in damages, which will be tripled by law to nearly $5.4 billion.
Clement said he was “delighted” to represent KW in its “high-stakes appeal” of the verdict.
“The verdict here raises serious legal issues and poses a threat to a wide range of businesses by converting practices enshrined in state law into per se antitrust violations,” Clement said in a statement.
KW and NAR have objected to a decision by the judge in the case, Stephen R. Bough, to not allow a reference to a Missouri state law to be included in the jury’s instructions, despite a request from the defendants.
After the plaintiffs dismissed their own state claims, the case proceeded solely under a federal claim alleging the defendants had violated the Sherman Antitrust Act. In addition, the Missouri law allows, but does not require, commission sharing. The plaintiffs in the case are challenging a requirement to share commissions under NAR’s cooperative compensation rule.
Keller Williams declined to comment on any legal errors the company will be challenging in its appeal.
Katie Johnson, NAR’s chief legal officer, told attendees at its annual conference, NAR NXT in Anaheim, California, this week, that the nearly 1.6-million-member trade group is getting ready to appeal. NAR’s legal team said the association would argue for a “complete reversal” of the verdict and laid out its planned grounds for appeal at the event.
“We are navigating the post-trial verdict and hiring the best appellate counsel who can bring our arguments to the Eighth Circuit and convince them to overturn the district court,” Johnson said.
NAR has hired Gregory G. Garre, partner at Latham & Watkins and global chair of its Supreme Court & Appellate Practice, according to Reuters. Garre served as principal deputy solicitor general under Clement and succeeded Clement as U.S. solicitor general from 2008 to 2009. He has argued 48 cases before the U.S. Supreme Court. He is currently defending Purdue Pharma’s bankruptcy settlement before the court.
Garre is working with Roman Martinez, also a partner at Latham & Watkins, who has argued 13 cases before the Supreme Court and dozens of appeals in various circuits, including the Eighth Circuit.
NAR has also retained Quinn Emanuel for its appeal. With more than 1,000 attorneys, the firm says it is the largest in the world devoted solely to business litigation and arbitration.
HomeServices of America, owned by Warren Buffett’s Berkshire Hathaway, has retained multinational law firm Gibson, Dunn & Crutcher for its appeal. According to Reuters, partner Theodore J. Boutrous Jr. will lead the charge for the franchisor and its subsidiaries.
According to his website, Boutrous has “successfully persuaded courts to overturn some of the largest jury verdicts and class actions in history” and has argued hundreds of appeals, including before the Supreme Court, 12 different federal circuit courts of appeals, and 11 different state supreme courts.
Former federal trial and appellate judge Gregg J. Costa, antitrust partners Cynthia Richman and Christopher D. Dusseault, antitrust litigation associates Julian Wolfe Kleinbrodt and Harry R. S. Philips, and litigation associate Samuel Dawson Adkisson round out the appellate team from Gibson, Dunn & Crutcher for HomeServices, according to public legal filings.
Despite a proposed settlement in the Sitzer | Burnett case, Anywhere (formerly Realogy) has hired Aaron D. Van Oort and Kevin P. Wagner, both partners at Faegre Drinker. According to his website, Van Oort “has argued more than 50 appeals and has won victories for clients as both appellee and appellant, including winning reversals of adverse jury verdicts in both federal and state courts.”
RE/MAX, which also has a proposed settlement in the case, declined to comment for this story.
Michael Ketchmark of Ketchmark & McCreight, lead counsel for the Sitzer | Burnett plaintiffs, told Inman that his firm is assembling its own team of appellate attorneys and would divulge their identities once the team was in place.
“We will be ready for the appeal,” Ketchmark said.
Regarding the defendants’ moves to hire appellate lawyers, Ketchmark quipped, “Come on in. The water’s nice.”
In the meantime, the district court on Tuesday granted a joint motion from the parties requesting that the “clerk’s judgment” — the court clerk’s recording of the jury verdict — be vacated so the plaintiffs can request their own entry of judgment and the defendants can object and comment on the plaintiffs’ proposed form of judgment.
According to Ketchmark, the joint motion is a “procedural step” so that both sides can file post-trial motions seeking to change the final judgment. For the plaintiffs, that will mean formally asking for the damages award to be trebled, as is provided under the law, he said.
According to the court’s order approving the motion, post-trial motions by the defendants are due by Jan. 8, any oppositions to those motions are due by Feb. 26, and replies to those oppositions are due by March 18. A judgment in the case at the district court level won’t come until 30 days after all post-trial motions have been resolved.
That briefing schedule “will afford the Parties and the Court adequate time to address the complex issues in this case based on the voluminous trial record,” attorneys for the plaintiffs and defendants said in the motion.
“The Parties’ agreement to stay execution of any judgment until 30 days after resolution of all post-trial motions also eliminates any confusion and provides additional time for the Parties to discuss the terms of a possible supersedeas bond.”
A supersedeas bond is an appeal bond. Any appeal would come after post-trial motions and the final judgment. But before any defendants appeal, they’ll have to post a bond of a to-be-determined amount to guarantee they can pay the plaintiffs their due if they don’t succeed in convincing a higher court to see things their way.
Asked for comment on the court granting the joint motion, KW’s Frost told Inman, “As a takeaway, the most important thing for agents to do is focus on delivering and communicating their value proposition. Commissions have always been negotiable — nothing has changed.”
HomeServices and Anywhere did not respond to requests for comment for this story.
Email Andrea V. Brambila.
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