Hyland et al v. Homeservices of America, Inc. et al
MEMORANDUM OPINION & ORDER by Senior Judge Thomas B. Russell on 12/21/2011: granting in part 530 MOTION to Continue Motion for Adjournment of Trial Date and Associated Deadlines filed by Christopher R. Burnette, Mystic Burnette ; Discovery d ue by 4/6/2012., Dispositive Motions due by 4/20/2012., Telephonic Final Pretrial Conference set for 7/13/2012 at 11:00 AM before Senior Judge Thomas B. Russell., Jury Trial set for 7/30/2012 at 9:30 AM in Louisville Courtroom before Senior Judge Thomas B. Russell.cc:counsel (KJA)
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF KENTUCKY
CASE NO. 3:05-CV-612-R
CASEY WILLIAM HYLAND, et al.
HOMESERVICES OF AMERICA, INC., et al.
MEMORANDUM OPINION AND ORDER
This matter is before the Court upon Plaintiffs’ Motion for Adjournment of Trial Date
and Associated Deadlines (DN 530). After a telephonic conference with the parties, this Court
ordered an expedited briefing schedule on the matter (DN 534). The HomeServices Defendants
and Defendant McMahan Company, Inc. (d/b/a Coldwell Banker McMahan Company) have
filed their response to Plaintiffs’ motion as well as a proposed scheduling order. Plaintiffs have
replied. This matter is now ripe for adjudication.
In this class action suit, filed on October 11, 2005, Plaintiffs allege that Defendants
engaged in a price-fixing conspiracy to inflate the price of commissions charged by real estate
brokers for the purchase of real estate in Kentucky. The remaining defendants can be
subdivided into four groups: (1) the HomeServices Defendants (HomeServices of America, Inc.
and HomeServices of Kentucky, Inc. d/b/a Semonin Realtors and Rector-Hayden Realtors); (2)
McMahan Company, Inc. d/b/a Coldwell Banker McMahan Company; (3) the Re/Max Group
(Re/Max International, Inc.; Properties East, Inc. d/b/a Re/Max Properties East; Alliance Real
Estate Services, LLC d/b/a Re/Max Alliance; Realtors 2000, Inc. d/b/a Re/Max Alliance; and
Re/Max of Kentucky/Tennessee, Inc.); and (4) the Realogy Defendants (Realogy Corporation,
Century 21 Real Estate LLC, and Coldwell Banker Real Estate Corporation).
On November 17, 2007, this Court certified a Rule 23(b)(3) class consisting of “All
persons who paid a commission to Defendants and/or their affiliates . . . 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 . . . .”
DN 322. Defendants sought to appeal the Court’s certification order; however, on March 13,
2009, the defendants’ petition for leave to appeal the Court’s order was denied by the Sixth
Circuit. DN 325.
On August 17, 2009, this Court denied Plaintiffs’ motion for a preliminary approval of a
proposed settlement with Re/Max International. DN 331. Pursuant to that proposed settlement,
Re/Max International would pay $46,250 in cash and provide cooperation to Plaintiffs in the
prosecution of this action against the remaining defendants. This cooperation would have
included Re/Max International making employees available for interviews and depositions, and
for declarations and affidavits. Re/Max International would further provide relevant documents
to Plaintiffs upon request and make its employees available to testify at the trial of this action.
This Court declined to preliminarily approve of this settlement citing concerns over the low
monetary value of the settlement in light of the costs of providing notice of the proposed
settlement. Specifically, “if notice of the settlement were not combined with other required
notices, this settlement would actually be a monetary net loss to the class.” DN 331 at 4. The
Court then noted that “[i]f other settlements are granted preliminary approval, the class’s
resources would be conserved by combining . . . all the communications with the class into a
single notice.” Id. at 5. For these reasons, the Court deferred consideration of the request for
preliminary approval until it could be determined if all or a substantial number of settlements as
a whole merit preliminary approval. Id. at 6.
On November 23, 2011, Plaintiffs filed a motion for preliminary approval of a proposed
settlement with the Realogy Defendants. DN 530. Plaintiffs simultaneously filed a motion
renewing its previously denied motion for preliminary approval of the Re/Max International
settlement (DN 531). Plaintiffs seek to combine notice of the proposed settlements with notice
of the pendency of this class action.1 Additionally, in light of the potential settlement with the
Realogy Defendants, Plaintiffs filed this motion for an adjournment of the trial date.
The HomeServices Defendants, in their response to Plaintiffs’ motion for an
adjournment, point to several actions on the part of the plaintiffs which, in their view, constitute
dilatory conduct and a failure to diligently prosecute and prepare their action. Specifically:
Plaintiffs waited over nineteen months from the close of class discovery to begin fact
Plaintiffs have not taken a single deposition since October 19, 2010.
Plaintiffs produced a list of 63 proposed deponents and 173 potential deponents.
Plaintiffs spent several months contending that the HomeServices Defendants’ hard
copy production of closing files was dilatory or inappropriate.
Plaintiff waited nearly a year to meaningfully engage on a sensible ESI protocol.
Plaintiffs sought and received multiple extensions and continuances of pre-trial
deadlines, including a total 118 day extension of the discovery deadline and a 201 day
extension of the deadline for expert disclosures.
If both settlements were approved, the only remaining defendants would be the HomeServices Defendants and
Plaintiffs respond that the lengthy discovery process is largely due to the actions of the
HomeServices Defendants, specifically:
HSA blocked 35 depositions by moving for a Protective Order.
HSA delayed electronic discovery for 10 months by asserting they could not search
for ‘%’ signs, requiring Plaintiffs to hire experts to disprove Defendants’ assertions.
HSA belatedly produced 52,000 pages of e-discovery in August and September 2011.
HSA blocked the discovery process by abusing the notice process.
HSA’s document production was performed in a manner Plaintiffs’ believed to be not
in compliance with the court order.
The current trial date for this action is April 16, 2012 with the deadline for Daubert and
dispositive motions set for February 3, 2012. Under Federal Rule of Civil Procedure, the
scheduling order “may be modified only for good cause and with the judge’s consent.” Fed. R.
Civ. P. 16(b)(4). “The primary measure of Rule 16’s ‘good cause’ standard is the moving
party’s diligence in attempting to meet the case management order’s requirements. A district
court should also consider possible prejudice to the party opposing the modification.” Andretti v.
Borla Performance Industries, Inc., 426 F.3d 824, 830 (6th Cir. 2005)(internal quotations
Plaintiffs contend that good cause exists for adjourning the trial date for the following
reasons: (1) it will afford class members the opportunity to exclude themselves from the Class;
(2) it will permit the settling Defendants to avoid the remaining litigation steps in this case; (3) it
will narrow the scope of the remaining litigation and permit additional settlement progress to be
made before the remaining litigation steps occur; and (4) it will allow Plaintiffs the documentary,
testimonial, and other important cooperation from Re/Max International as contemplated by their
1. Arguments in Favor of Granting an Adjournment
Of the reasons proffered by Plaintiff supporting their position that an adjournment would
be in the interest of the administration of justice, the Court finds the issue of notice to class
members to be the most compelling. Rule 23(c)(2)(B) mandates that for 23(b)(3) classes, “the
court must direct to class members the best notice that is practicable under the circumstances,
including individual notice to all members who can be identified through reasonable effort. The
notice must clearly and concisely state . . . that the court will exclude from the class any member
who requests exclusion . . . and . . . the binding effect of a class judgment on members under
Rule 23(b)(3).” Fed. R. Civ. P. 23(c)(2)(B). Class members must be given the opportunity to
opt-out of the class before any adverse summary judgment and trial. 7AA Charles A. Wright,
Arthur R. Miller, Mary K. Kane, and Richard L. Marcus, Federal Practice and Procedure, § 1788
(3d ed. 2011).
If this Court were to preliminarily approve the settlements with the Realogy Defendants
and Re/Max International, then an additional notice of the proposed settlements must be sent to
class members. Rule 23(e) mandates that “[t]he court must direct notice in a reasonable manner
to all class members who would be bound by the [proposed settlement].” Fed. R. Civ. P.
23(e)(1). Then, “[i]f the proposal would bind class members, the court may approve it only after
a hearing and on finding that it is fair, reasonable, and adequate.” Id. at 23(e)(2).
Regardless of whether or not the Court grants preliminary approval of the proposed
settlements, notice must be sent to the class members. This will necessarily take time to
determine the individual class members, to send individual notice (if possible), provide summary
notice, and allow a sufficient time for class members to opt-out. If the Court were to
preliminarily approve the proposed settlements, the Court would need additional time in which to
conduct a fairness hearing. All of this must, of course, occur before the Court rules on any
motion for summary judgment.
2. Arguments Against Granting an Adjournment
Although Plaintiffs cite to the anticipated cooperation from Re/Max International as a
reason in favor of an adjournment, the Court finds that this actually weighs in favor of not
granting the adjournment. It became clear during this Court’s December 1, 2011 teleconference
that Plaintiffs and the Realogy Defendants reached an agreement “in principle” to settle in April
2011 and informed Magistrate Judge Moyer that they would submit the settlement papers in
May. Plaintiffs only submitted the proposed settlement on November 23, 2011, six months later.
Plaintiffs now seek the Court’s approval of both the potential Realogy settlement and the
potential Re/Max settlement, with hopes that the ability to combine notices will result in this
If the Court were to approve one or both of these potential settlements, it is unclear how
much value the class will receive from Re/Max’s cooperation beyond that which they could have
received through the ordinary discovery process. However, if the Plaintiffs were able to obtain
new and relevant information through Re/Max’s cooperation, this would necessarily create the
need for additional delays and extensions. For example, Plaintiffs would likely seek to
supplement their expert reports to accommodate this new information. This would create the
need for additional expert discovery and for Defendants to supplement their expert reports. This
in turn, would likely delay the submission of Daubert motions and motions for summary
The parties have been litigating this case for over six years. Although all parties likely
shoulder some of the blame for the lengthy and contentious discovery process, Plaintiffs cannot
claim that they have not had sufficient time to complete discovery and prepare for an April trial.
Judge Moyer has warned the parties about the danger of continued discovery battles, stating that
“[he saw] no reason to advise Judge Russell to change this trial date, and the more time the
parties devote to discovery disputes, the less time they have to do their fact discovery.” DN 514
at 15. Allowing Plaintiffs more time to discover evidence supporting the merits of their case
now, over three years since the class was certified, is not the “good cause” necessary for this
Court to delay the remaining deadlines and trial.
Although the Court finds that Plaintiffs have not shown good cause for the requested 120day adjournment of the trial and the associated deadlines, the Court is concerned about affording
class members proper notice so as not to deprive them of due process. The Sixth Circuit has
noted that sixty days-notice prior to exclusion and objection satisfy due process for absent class
members. See Fidel v. Farley, 534 F.3d 508, 514-15 (6th Cir. 2008). Accordingly, Plaintiffs’
motion for adjournment is GRANTED IN PART.
IT IS HEREBY ORDERED that:
1. Plaintiffs’ motion for preliminary approval of the proposed settlement with the Realogy
Defendants is ripe.
2. Plaintiffs filed a motion for preliminary approval of the proposed settlement with Re/Max of
Kentucky-Tennessee, Inc. on December 15, 2011. Any response shall be filed by December
29, 2011. Any reply shall be filed by January 5, 2012.
3. The Court will attempt to have a ruling on Plaintiffs’ motions for preliminary approval of the
proposed settlements by January 16, 2012.
IT IS FURTHER ORDERED that the parties shall:
1. Identify experts in compliance with Fed.R.Civ.P. 26(a)(2):
January 5, 2012
February 3, 2012
February 17, 2012
March 2, 2012
2. No later than April 6, 2012, the parties shall complete all discovery.
3. No later than April 20, 2012, counsel for the parties shall file all dispositive motions and any
motions objecting to the admissibility of expert witness testimony under Fed.R.Evid. 702 and
Daubert v. Merrell Dow Pharmaceutical, Inc., 509 U.S. 579 (1993), Kumho Tire Co. v.
Carmichael, 526 U.S. 137 (1999). Responses shall be due May 11, 2012 and any replies due
May 25, 2012.
4. On or before June 18, 2012:
a. File a list of exhibits intended to be used at trial
b. Produce for inspection of opposing counsel, marked for identification, all
exhibits and charts which will be used at trial
c. Comply with Rule 26(a)(3) as to witnesses and exhibits
d. File any motions in limine (any responses shall be filed within 7 days)
e. File a pre-trial brief containing a succinct statement of facts of the case, the
questions of facts and questions of law with citations
f. Submit proposed jury instructions
g. Submit proposed jury voir dire questions. The Court shall conduct voir dire.
h. Designate portions of depositions to be used at trial (opposing counsel shall have
5 days thereafter to make additional designations)
5. A telephonic final pretrial conference will take place on July 13, 2012 at 11:00 E.D.T.
6. This action is assigned for trial by jury on the 30th day of July 2012, at 9:30 a.m. Counsel
shall appear in chambers at 8:30 a.m.
With regards to the notification procedure, IT IS FURTHER ORDERED:
1. If the proposed settlements are preliminarily approved:
a. Class Notice will begin January 27, 2012.
b. Plaintiffs shall file a motion for final approval of the proposed settlements by
March 23, 2012. Responses will be due March 30, 2012 and replies by April
6, 2012. Class members will file any objections or notice of their intent to
appear at the fairness hearing by April 6, 2012.
c. Requests for exclusion from the class must by post-marked no later than March
d. A fairness hearing will take place on April 17, 2012.
e. If the settlements are approved, class members must submit proof of claims by
May 18, 2012.
2. If the proposed settlements are not approved:
a. Class Notice will begin January 27, 2012.
b. Requests for exclusion from the class must be post-marked no later than March
As a final matter, the Court reiterates that this action will be tried on July 30, 2012 if not
settled or dismissed.
December 21, 2011
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