6% Commission Litigation - Update on Hyland v. Homeservices of America

Believe it or not, this case, first filed back in 2005 (and first blogged about here in 2007), is still alive and well in Louisville.  In early 2008 plaintiffs filed their Fourth Amended Complaint, alleging, in a nutshell, that “because of Defendants’ unlawful agreement alleged herein, competition on the basis of commission rates has not occurred and Plaintiffs and class members have paid inflated rates to Defendants.”

In support of their claims, plaintiffs point to the terms of franchise agreements between various defendants, anti-rebate regulations, and refusals to deal.  “[V]arious Defendants have enforced their price fixing agreement by boycotting price-cutting rivals, such as Help-U-Sell.  . . . It is being boycotted because it charges its customers a reduced fixed fee, rather than the standard percentage commission.”

Toward the end of 2008, the court certified plaintiffs’ proposed class:

All persons who paid a commission to Defendants and/or their affiliates listed in Exhibit A (Docket #242) in connection with the sale of residential real estate (excluding initial sales of newly constructed homes) located in the Commonwealth of Kentucky during the period from October 11, 2001 to October 11, 2005. This class excludes governmental entities, Defendants, their parents, subsidiaries, affiliates, and employees of Defendant or their affiliates.

Efforts to resolve the case have so far been fruitless.  Mediation efforts in early 2009 failed, and last summer Judge Russell denied (with leave to refile) a tentative settlement of claims against Re/Max International. 

The court has scheduled a jury trial in this matter to commence on April 16, 2012 (yep, that’s 2012).  Typically these cases settle before trial, and with a trial date nearly two years off, there would seem to be plenty of time to reach a deal.  However, for a variety of reasons, I would not rule out the possibility that the parties will proceed to trial.