US judge in brokerage antitrust case faces recusal bid over political donations

By Mike Scarcella

March 11 (Reuters) - A national real estate brokerage has asked a U.S. judge in Missouri to withdraw from hearing a major antitrust lawsuit after disclosures showed plaintiffs’ lawyers in the case previously donated to political campaigns involving the judge’s wife.

Howard Hanna Real Estate Services in a court filing on Monday said ethics rules require the recusal of U.S. District Judge Stephen Bough, whose wife is an attorney and at-large councilmember for Kansas City, Missouri.

Howard Hanna is among several defendants in the lawsuit, which was filed by home sellers in 2023 and accused brokerages of conspiring to inflate the commission that sellers pay in residential real estate sales.

The donations from plaintiffs’ lawyers to the judge’s wife “create an appearance of impropriety” for the court, Howard Hanna said. The company has denied violating U.S. antitrust law.

Howard Hanna declined to comment, as did Bough, through his court chambers.

In a statement, a lead lawyer for the plaintiffs, Michael Ketchmark, said on Tuesday that "the attack on the court lacks merit."

Ketchmark said "there’s nothing wrong with supporting a candidate for city council" and that Howard Hanna delayed raising its disqualification bid "until after it lost all its motions trying to escape accountability in Missouri."

Howard Hanna's legal team at WilmerHale includes former Bill Clinton-era U.S. solicitor general Seth Waxman.

Pittsburgh-founded Howard Hanna markets itself as the country’s largest family-owned real estate brokerage, employing 15,000 sales associates in nearly 500 offices. The firm said it ended 2023 with more than $37 billion in closed sales volume.

The lawsuit against Howard Hanna and other brokerages was filed by plaintiffs lawyers who had just won a landmark class action jury verdict in Bough’s courtroom in a related antitrust lawsuit.

Since that October 2023 verdict, home sellers have secured more than a billion dollars in settlements with major brokerages and the real estate industry’s chief trade group. The verdict spurred a wave of similar lawsuits against brokerages around the country.

Bough had disclosed the donations from members of the plaintiffs’ team in the earlier class action.

“The ethics rules make it abundantly clear if I know someone is donating to my wife, then I need to put them on the conflicts list,” Bough said at a hearing last year in that case.

He said at the hearing that he had just learned that one of the members of the plaintiff’s team had donated to his wife. The judge also said some of the large defense law firms in the Kansas City area donated to his wife.

At the hearing, Bough said he would be “more than glad to step down,” but none of the parties asked for his recusal at the time.

The case is Don Gibson et al v. National Association of Realtors et al, U.S. District Court for the Western District of Missouri, No. 4:23-cv-00788-SRB.

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