Robert A. Braun of Cohen Milstein Sellers & Toll PLLC has helped home sellers reach about $1 billion in settlements over real estate broker commissions and has also helped land deals for buyers in antitrust cases involving pharmaceuticals and electronic components, earning him a spot among antitrust practitioners under age 40 honored by Law360 as Rising Stars.
The biggest case of his career and why it was challenging:
Braun said an antitrust case targeting real estate broker commissions is the biggest case of his career so far. He is helping lead a class of home sellers saying they overpaid for broker services because of rules from the National Association of Realtors that required sellers to pay the fees for a buyer’s broker.
Home sellers in Braun’s case and others have struck settlements and proposed settlements totaling around $1 billion with the NAR and a number of major brokerages, and have also secured changes to the trade group’s rules to improve competition in the residential real estate industry.
“Any case where you are setting out not only to obtain monetary relief for your clients, but to literally change the rules governing how an industry operates, is going to be challenging,” Braun said. “The defendants are going to be very dug in, and they’re going to fight tooth and nail to maintain the status quo. I think this case was a perfect example of that.”
The largest settlement struck so far is with the NAR itself, a $418 million deal reached in March that includes policy changes to increase transparency and fairness around broker commissions. Other deals included $208.5 million in settlements struck with Anywhere Real Estate Inc., RE/MAX, and Keller Williams Realty Inc.
“In a lot of ways, it’s an incredibly both impactful and interesting case,” Braun said.
His proudest moment as an attorney:
Successfully negotiating the settlement with the NAR is Braun’s proudest moment as an attorney, he said. That’s because he was able to play a major role in drafting and negotiating a settlement that has the potential to impact how houses are bought and sold across the country, he explained.
The purchase or sale of a home is often the largest transaction completed by Americans, and Braun said they pay brokers a significant “tax” that makes it harder and more expensive to buy or sell a home. The NAR settlement will not only return some of the money home sellers have overpaid, it will also benefit future buyers and sellers by allowing for more competition, he said.
“I’m proud of the work that we’ve done to make the process of selling and buying a home less expensive,” Braun said. “We’re hopeful that pulling down some of the barriers to competition in the industry will energize a new wave of innovative companies and models for buying and selling homes that will benefit consumers.”
Other notable cases he’s worked on:
Braun is part of a Cohen Milstein team representing the Washington, D.C.’s government in a case accusing RealPage Inc. and a number of residential landlords of using the software company’s revenue management platform to effectively fix the rents for apartments in the district.
In a notable case earlier in his career, Braun represented direct purchasers in a case accusing Panasonic and other electronics companies of colluding for over a decade to artificially inflate the price of linear resistors, which are used to regulate electricity in a wide range of everyday products including automobiles, televisions, cellphones and computers.
A California federal court gave final approval in 2019 for a $50.25 million settlement between the electronics companies and direct purchasers.
Braun said the resistors case allowed him to cut his teeth as a young attorney by providing opportunities he might not have had on a larger case at that stage in his career. This included the chance to take depositions of senior executives at large international electronics companies and to put together the theory of the case.
“It was an incredible experience as a young attorney, and I think the case was also ultimately a successful one,” he said. “Compared to the $1 billion in Realtor settlements, it’s a bit smaller, but I was very proud of my work on that case and the result that we achieved.”
A D.C.-based property management company has settled a lawsuit from the Equal Rights Center (ERC) accusing the company of discriminating against potential residents by denying them housing on illegal grounds.
ERC’s lawsuit accused AIR Property Management TRS, known as AIR Communities, of discriminating against voucher holders and using “overbroad eviction and criminal history screenings,” at two of its Northwest D.C. apartment complexes.
As part of the settlement, AIR Communities — which owns and manages Latrobe Apartment Homes in Logan Circle, Upton Place in Cathedral Heights and Vaughan Place in McLean Gardens — has agreed not to deny applicants based on criminal convictions more than seven years old and evictions more than three years old, in compliance with D.C. law.
Jury says Similac maker failed to warn of risk; Abbott says it disagrees with verdict
A jury ordered Abbott Laboratories ABT -0.68%decrease; red down pointing triangle to pay $495 million in compensation and damages after determining that the company failed to warn that its formula for premature infants increased the risk for a bowel disease.
Shares of Abbott, which makes the Similac formula, fell about 5% in extended-hours trading.
A Sixth Circuit judge pressed General Motors on Thursday about why it waited three years to argue that some plaintiffs were bound by arbitration agreements in a class action over allegedly defective transmissions, saying a major car company should be aware most consumers sign such contracts.
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GM is appealing the certification of 26 classes of drivers who say their vehicles had faulty transmissions that could cause shudders and hard shifts, sometimes making the vehicles difficult to stop.
In certifying the classes in March 2023, U.S. District Judge David M. Lawson determined GM waived its right to compel arbitration “by engaging in this litigation and seeking dispositive rulings from the court on the plaintiffs’ claims — some of which were forthcoming in its favor.” GM raised arbitration against absent class members in its answer to the third amended complaint, according to proceedings.
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Douglas McNamara, of Cohen Milstein Sellers & Toll PLLC., representing the class, said GM could have pled the arbitration defense sooner.
“And that’s the problem here. They never pled it in the affirmative answer,” McNamara told the panel, which was down to two judges Thursday with the absence of U.S. Circuit Judge R. Guy Cole Jr.
Judge Moore asked McNamara about GM’s argument that discovery is needed to determine who has arbitration agreements.
McNamara said the reason GM doesn’t know who has arbitration agreements is that the dealers are the ones who issue them. He said GM shouldn’t be able to “glom on” to dealers’ agreements.
“They could have always pled it. They didn’t, and that’s why it was waived,” McNamara said.
McNamara said GM’s estimate that 40% — which he said GM “made up” — of class members signed arbitration agreements still leaves about 480,000 plaintiffs to survive the numerosity threshold for certification.
. . .
McNamara said there is no state supreme court that definitively said a defect needs to manifest to support a warranty claim.
“In fact, it doesn’t really make any sense. If you can show now that you have a present economic injury, because you bought a vehicle that you paid too much for because of defects, because it has diminished value —why do we need to wait for a manifested defect?” McNamara said.
McNamara said all the class members have standing because they all overpaid for their vehicles.
Bloomberg Law interviews Molly J. Bowen, a partner in the firm’s Securities Litigation & Investor Protection practice, and recipient of Bloomberg Law’s 40 Under 40: They’ve Got Next award.
Please describe two of your most substantial, recent wins in practice.
I was on the leadership team in In re Wells Fargo Securities Litigation, which resulted in a landmark $1 billion settlement—the largest securities class action settlement of 2023 and largest ever not involving a restatement or parallel enforcement action by the SEC or DOJ. I played a significant role in our successful opposition to motion to dismiss, oversaw discovery, and worked closely with experts on our damages theory, which involved novel questions about market volatility during the Covid-19 pandemic.
I also played a pivotal role in the FirstEnergy’s derivative litigation, stemming from the company’s involvement in a major bribery scandal. The case was hard-fought; we overcame a motion to dismiss, a motion to stay, and appeal of the denial of that motion, and conducted extensive party and non-party discovery before reaching a settlement. We recovered $180 million for the company plus historic corporate governance reforms, including six directors departing and active board oversight of political spending and lobbying.
Cohen Milstein’s securities practice is unique in the opportunity to litigate both class action and shareholder derivative matters. I’m proud to partner with our extraordinary clients in protecting their investments and holding public companies accountable.
What is the most important lesson you learned as a first-year attorney and how does it inform your practice today?
Always be preparing for trial. I started out at a mid-size firm in Miami that was a local leader in complex commercial litigation and regularly went to trial, and I was lucky to be thrown into multiple trial teams starting just a month after I joined the firm. It was daunting, exhilarating, and incredibly educational.
In my current world of securities class actions at Cohen Milstein, a national plaintiffs’ law firm, trials are exceedingly rare, but having that mindset and understanding how to put together a succinct, compelling case that makes sense to a jury has profoundly shaped my approach to litigation.
In discovery we can get hundreds of thousands of documents and take scores of depositions, but at the end of the day, whether at trial or mediation, what really matters is focusing your audience on a few key documents, having an air-tight damages calculations, and persuasively explaining what happened and why it matters.
How do you define success in your practice?
Success is achieving an amazing result for the clients and the class that we represent. We have a wide range of cases and so the best possible outcome differs—sometimes potential damages are huge and sometimes they are smaller, and sometimes the most impactful result is internal governance reforms rather than a financial remedy.
In each case, we carefully consider what wrong occurred and how to best repair the injured party, and then zealously fight for that result in partnership with our clients and with the guidance of experts. It’s always a thrill on the day that checks go out to class members, or you see a reform implemented, and the work you’ve been doing for years has a concrete impact out in the world.
What are you most proud of as a lawyer?
In terms of case victories, Pinterest was a special one for me. With support of my mentor and practice group co-chair Julie Goldsmith Reiser, this was the first case where I really led the litigation—investigating and drafting the complaint and motion to dismiss opposition, as well as the settlement negotiations.
We achieved best-in-class reforms that really brought human capital management and diversity, equity, and inclusion efforts from sort of a remote HR function to the core of the business model and governance, including significant support for making Pinterest’s platform more inclusive and requiring internal audit to monitor the settlement commitments and DEI [Diversity, Equity, and Inclusion] efforts. The settlement also ended the company’s use of non-disclosure agreements in many circumstances, which was a key issue for former employee whistleblowers.
On a personal note, I’m proud that I have found a way to litigate my cases aggressively and achieve excellent results while remaining true to myself. Now and again, I run into bullying or obstructive tactics, and it just doesn’t have to be that way. You can be persuasive, be effective, and uphold high standards while treating others with professional respect.
Who is your greatest mentor in the law and what have they taught you?
I have learned so much from the judge that I clerked for, Hon. Karen Nelson Moore on the Sixth Circuit Court of Appeals. She is a brilliant, incisive thinker and asks excellent questions.
She also exemplifies what it looks like to stay the course and continue doing the work, even though at times she has often been in the dissent among her colleagues—a perspective that has felt particularly relevant for me as a plaintiffs’ lawyer. The year that I spent in her chambers thinking, debating, and writing about the law will always be a career highlight and source of inspiration.
Tell us your two favorite songs on your summer music playlist. (Feel free to also include a line or two on why these resonate if you like.)
We take lots of road trips in the summer, and “I’ve Been Everywhere” by Johnny Cash is one of those perfect driving songs.
I am also really enjoying Maggie Rogers’ recent album, full of beautiful songs about transitions and friendship. Plus, she is a Maryland native—the governor recently declared it Maggie Rogers Day!
A stopgap measure that kept a key US financial regulator’s whistleblower office afloat during a funding crisis is set to expire unless lawmakers revive it, putting the cash-for-tips program in jeopardy.
The Commodity Futures Trading Commission, under a program established by Congress after the 2008 financial crisis, offers awards to whistleblowers whose tips lead to successful enforcement actions. The awards come from a revolving fund capped at $100 million that also pays for the CFTC’s whistleblower office and its staff.
Lawmakers are weighing how to keep the office open if the fund is depleted. Also up for debate is raising the fund’s cap to $300 million, putting it in line with the Securities and Exchange Commission.
“No one thought that we would be awarding whistleblowers anything close to that amount,” said attorney Christina McGlosson, former acting director of the CFTC’s whistleblower office who joined Cohen Milstein Sellers & Toll PLLC in April.
The CFTC’s office has awarded more than $47 million to whistleblowers since September, including an $18 million award in October, according to the agency. More awards are expected.
More than 30% of the CFTC’s enforcement investigations stem from whistleblowers, according to the National Whistleblower Center. The number of tips the office receives more than tripled from fiscal 2019 to 2023, according to agency data.
“There is a pipeline of awards and $100 million is not going to be sufficient,” McGlosson said.
Current and former New York Life workers received final approval for a $19 million deal ending their lawsuit claiming the insurance giant kept inferior proprietary investment options in its employee 401(k) plans.
On Thursday, U.S. District Judge Jesse M. Furman signed off on the settlement agreement, overruling a single objection to the proposed class settlement. The workers said in a February motion for preliminary approval that the $19 million deal totals 20% to 25% of the losses they claimed the plans suffered because New York Life violated the Employee Retirement Income Security Act.
Justice Department might pursue additional changes to the costs associated with buying and selling a home
With the real-estate industry poised to abandon its longstanding commission structure next month, the Justice Department is signaling it isn’t done scrutinizing how real-estate agents get paid.
The industry has battled many lawsuits alleging that the system for compensating agents keeps costs artificially high. It largely resolved these lawsuits in March with a sweeping settlement that will make it easier for home buyers to negotiate fees with their own agents and could lead more buyers to forgo agents altogether.
But federal enforcers’ recent actions indicate they are still weighing whether the settlement goes far enough. If they decide it doesn’t, they could pursue more substantial changes to the costs associated with buying and selling a home.
The Justice Department has intervened in two industry lawsuits and sent a formal inquiry to the California Association of Realtors, a large state trade association, about some legal forms it provides for agents to use during the home-sale process. It has also asked some real-estate companies about their rules governing listings.
At a meeting with the National Association of Realtors in late June, the department raised concerns that agents will attempt to circumvent the new rules, NAR President Kevin Sears said in a letter to the group’s members.
“Clearly the DOJ is still very much involved in this,” said Gary Acosta, chief executive of the National Association of Hispanic Real Estate Professionals, who attended the meeting.
The new industry rules included in the NAR class-action settlement go into effect on Aug. 17, but the full settlement is not scheduled to receive final approval from a federal judge until November. That means the Justice Department has months to decide if it wants to formally object to the settlement and argue it won’t bring commissions down enough. That wouldn’t automatically negate the agreement, but a judge could tell the parties to go back to the negotiating table.
An attorney for the Justice Department said at a court hearing in another case in May that the department hadn’t yet decided whether to intervene in NAR’s settlement.
The Justice Department has a history of investigating the residential real-estate business dating to the 1940s, when a department lawsuit led the Supreme Court to declare that local real-estate associations’ mandatory fees were illegal.
A court order last year prevented the Justice Department from doing much to investigate the industry. Then in October, private plaintiffs received a historic $1.8 billion jury verdict in Kansas City, which empowered the plaintiffs’ attorneys to negotiate a nationwide settlement.
The agreement reached in March with NAR is expected to lead to the biggest upheaval in the process of buying and selling homes since the 1990s, when the current system was enacted.
The Justice Department got the green light in April to resume investigating NAR after a federal appeals court ruled that the department wasn’t bound by a previous settlement with the trade group. Now it has to decide whether to let the private plaintiffs’ settlement go into effect and see how the industry adapts or try to push for changes before then.
Eric Kafka of Cohen Milstein Sellers & Toll PLLC has secured major client wins in high-dollar consumer protection cases, including a recent $40 million settlement for advertising purchasers in a case over Facebook’s alleged inflation of advertising performance metrics, earning him a spot among the class action law practitioners under age 40 honored by Law360 as Rising Stars.
The most interesting case he’s worked on lately:
Kafka worked on LLE One LLC et al. v. Facebook Inc., in which Facebook agreed to pay $40 million to settle litigation in California federal court alleging it misled a proposed class of advertisers about how much time users spend watching paid video ads by using inflated video-viewing metrics.
“It was an interesting case because it implicated cutting-edge technological issues,” Kafka said, adding that “one of the things that makes class actions as a whole so interesting to litigate is that as technology progresses, the type of work and the subject matter of our cases naturally progresses.”
Cases such as this allow him to engage with questions about “the engineering side of how the company operates.” He cited the fact that he gets to work with experts on a range of subject matters to do things like quantify damages for the alleged misconduct.
“I’ve been blessed to work with absolutely brilliant experts who work in economics or computer science who are leaders in their fields but also have ability to communicate with lay people,” Kafka said.
The biggest case he’s worked on:
The biggest case Kafka worked on is still in the midst of litigation, DZ Reserve et al. v. Meta Platforms Inc., in which a class of Facebook advertisers claim they were deceived about the company’s “potential reach” metric.
“We allege that Potential Reach was shown to every advertiser who purchased Facebook ads on Ads Manager, and that Potential Reach is an important metric to advertisers,” Kafka said.
He added that, “while I have represented plaintiffs litigating the whole spectrum of consumer class actions, I have also developed a particularly deep expertise litigating against Big Tech companies.”
Why he chose to go into class action law:
Kafka said class actions are a “very important tool to vindicate the rights that would never be vindicated individually,” offering a quote from former Seventh Circuit Judge Richard Posner: “The realistic alternative to a class action is not 17 million individual suits, but zero individual suits, as only a lunatic or a fanatic sues for $30.”
“I feel a tremendous obligation to the class or putative class to give them the best representation possible,” Kafka said.
He added that he viewed it as an area “that was both important and challenging” and said going into this field of law is an opportunity to “vindicate the rights of individuals in a landscape where courts were providing more scrutiny to plaintiffs’ claims than they had 20 years or thirty years beforehand.”
How he thinks the practice and the legal industry will change in the next 10 years:
“I think that class action law is well-suited to continue to play a very positive role in vindicating the rights of individuals and deterring corporate misconduct,” Kafka said.
Kafka said that while it is true that there is more scrutiny of class action claims and class certification bids, he sees himself as part “of a rising generation of plaintiff class action litigators who are finding ways to certify classes and represent their clients within the current legal framework.” Although people may see slightly fewer class actions than before, he said, one of his goals is “finding the right cases that are pointing to true problems that need to be solved and then litigating them very robustly.”
Chiquita’s money helped buy weapons and ammunition used to kill innocent victims.
—US Government sentencing memo, 2008
In 2007, Chiquita — one of the world’s largest banana producers — admitted that for years it had been knowingly paying a Colombian terrorist organization to protect its operations in the country. The consequence was predictably violent, allegedly resulting in thousands of murders, disappearances, and acts of torture. This week, nearly two decades later, a federal jury in South Florida ordered the company to pay upwards of $38 million in damages in the first of multiple waves of wrongful death and disappearance lawsuits.
This explainer explores the factors that drove the multinational to make these payments, the consequences, and the legal impact.
How does a banana company find itself in the position of bankrolling paramilitary forces?
Chiquita has operated banana plantations in Colombia since the 1960s — a decade that saw guerrilla forces taking up arms against the country’s government amidst a backdrop of political instability and violence. This period witnessed the formation of such militant leftist groups as the Revolutionary Armed Forces of Colombia (FARC) and the National Liberation Army (ELN). In response, right-wing paramilitary groups like the United Self-Defense Forces of Colombia (AUC) emerged, fueled by the support of landowners and corporations wishing to counter what they perceived as rebel threats.
In a 2020 complaint, relatives and victims of paramilitary violence described the dynamic as follows:
In order to undermine communities’ and individuals’ support for the guerillas, the AUC and its constituent groups, including the ACCU, adopted a strategy of terrorism, routinely engaging in death threats, extrajudicial killings, attacks on civilian populations, torture, rape, kidnapping, forced disappearances, and looting. The AUC purposely used killings and cruelty to terrorize the civilian population into ceasing support for guerrilla groups.
According to court documents, AUC leader Carlos Castaño informed Colombian Chiquita subsidiary Banadex in 1997 that his forces would soon drive FARC out of the region of Uraba, where Banadex grew bananas, and that Banadex would be expected to start making regular payments to an intermediary firm. In a 2007 factual proffer, Chiquita claimed, “Castaño sent an unspoken but clear message that failure to make the payments could result in physical harm to Banadex personnel and property.”
AUC’s tactics appear to have mirrored the protection racket methods of other global organized crime syndicates, who have historically demanded protection payments or “krysha” from businesses, their demands backed by implicit threats of violence for failure to comply. Chiquita had been making similar payments to FARC and ELN forces between 1989 and 1997 before they were driven out by the AUC, prosecutors wrote in a sentencing memo accompanying Chiquita’s initial guilty plea.
In September 2001, the US government designated the AUC as a terrorist organization. Chiquita continued its payments for another three years, before selling off its Colombian holdings in 2004. In 2007, the company pleaded guilty to issuing more than 100 payments to the AUC between 1997 and 2004, amounting to more than $1.7 million. Following its admission, Chiquita agreed with federal prosecutors to pay $25 million in damages. The company’s executives were spared criminal prosecution in both the US and Colombia.
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Leslie Kroeger, a partner at Cohen Milstein and a member of the plaintiffs’ trial team, said, “After a long 17 years against a well-funded defense, justice was finally served.”