Real Estate Giant Seeks Judge’s Recusal Over Campaign Donations in Antitrust Case

A major U.S. real estate brokerage has requested that a Missouri federal judge step aside from presiding over a significant antitrust case, citing concerns about potential conflicts of interest linked to donations made to the judge’s wife. According to a court filing made by Howard Hanna Real Estate Services on Monday, the company argued that U.S. District Judge Stephen Bough should recuse himself from hearing the case due to ethics rules triggered by campaign contributions from lawyers representing the plaintiffs.

The lawsuit in question, filed by home sellers in 2023, accuses several real estate brokerages, including Howard Hanna, of conspiring to inflate commissions that sellers must pay in residential real estate transactions. The legal team representing Howard Hanna pointed out that donations made by members of the plaintiffs’ legal team to the wife of Judge Bough, who is both an attorney and a councilmember for Kansas City, Missouri, could create an appearance of partiality, thus violating judicial ethics standards.

Howard Hanna, which operates nearly 500 offices and employs 15,000 sales agents across the country, maintains that it did not violate any U.S. antitrust laws. The company did not provide further comment on the situation, and lawyers representing the plaintiffs in the case have yet to respond to requests for statements. Judge Bough has also not commented on the matter, as of the latest reports.

This motion to recuse comes after a similar case in Judge Bough’s court resulted in a landmark antitrust victory for home sellers in October 2023. The plaintiffs’ legal team secured a major class action verdict that set the stage for more than a billion dollars in settlements with top brokerages and the National Association of Realtors. This verdict has prompted a wave of additional lawsuits filed by home sellers across the nation, all of which are closely tied to the central allegations regarding commission inflation.

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At a hearing during the earlier case, Bough disclosed that he was aware of donations from both plaintiffs’ attorneys and certain defense law firms in Kansas City to his wife’s political campaigns. The judge acknowledged at the time that such contributions raised ethical questions and noted that it was his responsibility to report these donations if they could potentially influence his impartiality. “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 remarked during the hearing.

Despite these revelations, Bough did not step down from the case at that time, as no parties formally requested his recusal. Howard Hanna’s legal team, which includes former U.S. solicitor general Seth Waxman, now seeks to have Bough removed from the ongoing litigation, citing the same ethical concerns.

The case, Don Gibson et al v. National Association of Realtors et al, is being heard in the U.S. District Court for the Western District of Missouri. It has attracted significant attention as part of a broader wave of antitrust lawsuits challenging practices within the real estate industry. Per Reuters, the outcome of these cases could have a far-reaching impact on the way residential real estate commissions are structured in the U.S.

Source: Reuters