US judge rejects call to withdraw from real estate antitrust lawsuit

By Mike Scarcella

April 11 (Reuters) - A federal judge in Missouri declined a request that he withdraw from hearing a major antitrust lawsuit after disclosures showed lawyers in the case previously donated to political campaigns involving the judge’s wife.

In an order on Thursday, U.S. District Judge Stephen Bough said Howard Hanna Real Estate Services had not met the “heavy burden of proof” to justify his recusal in the litigation in Kansas City.

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

A spokesperson for Howard Hanna said the company was evaluating the judge's order. Bough and an attorney for the plaintiffs did not immediately respond to requests for comment.

Pittsburgh-founded Howard Hanna markets itself as the country’s largest family-owned real estate brokerage.

The lawsuit was filed by plaintiffs' lawyers who had won a landmark class action jury verdict in Bough’s courtroom in a related antitrust lawsuit.

Home sellers since that October 2023 verdict 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’s wife is an attorney and at-large councilmember for Kansas City, Missouri. Bough had disclosed the donations from members of the plaintiffs’ team in an earlier, related class action.

Donations from plaintiffs’ lawyers to the judge’s wife “create an appearance of impropriety” for the court, Howard Hanna had argued to the court.

A lawyer for the plaintiffs countered that the donations were not improper and that Howard Hanna delayed raising its disqualification bid "until after it lost all its motions trying to escape accountability in Missouri."

In his ruling, Bough said his wife’s campaign committee had received “contributions from a huge cross section of the community, including lawyers representing both plaintiffs and defendants in this case.”

The judge questioned the timing of the recusal bid by Howard Hanna, saying it had come after the court declined the company’s effort to dismiss the lawsuit.

Bough, in his decision, said he “has taken significant time and effort to comply with the ethical rules.”

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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