Law Firms Eye $36.8M from $110M Settlement Pool in Landmark Gibson Case

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In a high-stakes legal showdown reshaping the real estate industry, law firms representing homeseller plaintiffs are now set to claim $36.87 million from a $110.6 million settlement pool, according to a recent filing. This significant sum comes as a reward for their relentless pursuit of justice against major real estate firms and the National Association of Realtors (NAR) over alleged anticompetitive practices.

A Five-Year Legal Odyssey

The legal battle, known as the Gibson case, represents a monumental effort by trial attorneys who dedicated over 105,000 hours across five years to challenge prominent defense teams. These attorneys are seeking to recoup a third of the $110.6 million secured from nine major real estate companies, plus approximately $200,000 in remaining expenses. This claim is part of a broader effort to address allegations that the real estate industry engaged in illegal collusion to inflate broker commission rates for homesellers.

The Gibson case was filed in Missouri, coinciding with the verdict of another related case, Sitzer | Burnett. These cases, alongside other lawsuits like Moehrl, have collectively led to nearly $987.1 million in proposed settlements. The trial attorneys aim to recover around $329 million, including expenses, from this total.

The Fight for Fair Compensation

The legal team argues that their extensive efforts—reviewing millions of documents, engaging 20 experts, and conducting about 180 depositions—merit the substantial fee. They highlight that their “lodestar,” or the total amount of work hours calculated at prevailing rates, amounts to approximately $90.8 million. This figure surpasses the amount they are seeking, underscoring the immense labor and risk involved in the litigation.

“The Settlements represent more than just financial recovery; they signify a pivotal victory that will lead to significant changes in industry practices,” said attorney Eric Dirks. These changes include new requirements for buyer agents to secure signed contracts outlining their compensation before showing homes and the removal of compensation offers from multiple listing services.

High-Stakes Legal Costs

The legal fees reflect the gravity of the case. Partners at Dirks’ law firm command an hourly rate of $1,250, while paralegals are billed at $300 per hour. Associates, who played a crucial role in the case, earn $600 per hour. Notably, lead plaintiffs’ attorney Michael Ketchmark reported a staggering $10.1 million in fees for nearly 7,000 hours of work, billed at $1,450 per hour. Marc Seltzer of Susman Godfrey, the highest-paid attorney, charges $2,200 per hour.

As the legal community awaits the final approval hearing for the Gibson settlements scheduled for October 31, the outcome promises to impact not only the involved parties but also set new standards for transparency and fairness in the real estate industry.

This case exemplifies the crucial role of dedicated legal representation in holding powerful industries accountable and pushing for meaningful reforms that benefit the broader public.