Lawsuits are disputes between two parties, either private citizens to private citizens, entity to entity, or citizen to entity [e.g., criminal lawsuits are government bringing cases against a private citizen or private entity]. With rare exception, the parties to a lawsuit can, at any time, enter into a separate agreement washing the dispute away in exchange for adherence to the terms of the new agreement. These agreements [alternately known as a “Settlement” or a “plea bargain” depending on the type of lawsuit], will end the lawsuit, though the court usually has the right to reject the settlement agreement if there is a belief that the settlement was reached through fraud, mistake or coercion [in family law cases, the court is able to reject a settlement if they do not believe it in the best interest of the child as well; similarly for minors, incompetent individuals, or receiverships the court exercises some degree of dismissive oversight]. If the court doesn’t reject the settlement, then it’s officially the end of the lawsuit, and the parties have agreed upon some sort of solution that works for them without forcing the issue into a courtroom. If the facts undergirding the agreement don’t change, it remains valid. The settlement tends to include exchanges of money and releases of liability, essentially stating “in exchange for ____, we can no longer sue you over the specific action we were just suing you for.”
The settlement terms will remain in full effect unless one of several things happens:
- if there is essential, material, new evidence that comes to light that was not available at the time of the settlement [e.g., someone comes wandering out of the woods after surviving a plane crash and several months in the wilderness and has key, new information about the case that implicates one of the parties to the settlement];
- if information that influenced a party into entering the settlement turns out to have been fraudulent;
- if the settlement had clerical errors or failed to follow proper legal procedure [e.g., a decimal point placed incorrectly and appears to give one party substantially more than they expected];
- if information comes out that the settlement was created through duress [e.g., a party only entered the settlement terms because the opposite party was threatening their family]; or
- if there was a breach of the terms of the settlement [e.g., settlement says “don’t use the house as a rental,” but you start using it as a rental].
It is important to understand that the above events are extraordinary exceptions to the norm, with the exception of “breaching terms of the settlement.” Generally, once a settlement is reached, even deep buyer’s remorse won’t undo the settlement.
If one of the above occurs and the effectiveness of the settlement is in question, the parties can “reopen” the lawsuit and, the court can demand that the parties follow the terms of the settlement [interdictions or specific performance], damages can be pursued, fines can be imposed, and in extremely rare circumstances the settlement agreement can be nullified [e.g. if settlement terms were only agreed to under duress, the court won’t hold the settlement as valid]. If the settlement is nullified, the liability shield and terms of the settlement no longer have effect.
In law there is a separate concept known as the “class action” lawsuit. Class actions occur when a single action affects a gigantic number of people. Think like “US Navy using asbestos without telling people about the danger and exposing hundreds of thousands of workers to mesothelioma” cases, or “train overturns and explosion damages entire town” lawsuits. If the group of people is so large that it would be impractical to individually notify all of the people, if the group all have similar claims for injury, if there is some representative with a typical claim just like everyone else in the group who can be the public face of the group, and if the representative of the class and their lawyers can prove they can handle a case of this size, then the courts can permit the giant bundled “everyone at once” class action lawsuit to happen in one large scale case. Once the class is established, it includes everyone with similar claims who are part of the class, unless the person “opts out” of being in the class. Opting out is the default, so if a train flips over in a town and every citizen is injured to some extent, the class action includes everyone hurt by the train derailment, except those who specifically told the court and class action representative “I don’t want to be in this class.” Philosophically, this means that the first lawyer to certify a class of individuals who are harmed by a giant injury event represents all those who want to be in the lawsuit and all those who are silent about the lawsuit, whether intentionally or through ignorance. It is very commonplace for a class action lawsuit to have a plaintiff group comprised of many people who simply do not know they are part of the lawsuit. What the class action does, however, is ensure that the court can affirmatively tie off every single loose end for a lawsuit at the same time. They can put hundreds of issues to bed simultaneously rather than harrying the court system with a thousand small-fry lawsuits; and if someone wants to bring a small-fry lawsuit, the court will have been notified and will know exactly who is not covered by the class action. Judicial expediency at the expense of the individual.
The above is why the Sitzer/Burnett lawsuits from 2023 and the settlement in 2024 were applicable nationwide. The class was established for anyone who sold a home anywhere in the United States during a particular set of dates and paid a commission to a real estate brokerage in connection with that sale. The settlement included provisions that would create a shield against liability. In essence, if a copycat lawsuit was brought arguing the same thing as the Sitzer case, the response could be “we already answered this question and the issue was settled.” That is, in part, the benefit of the nationwide settlement, which tamps down identical arguments brought in other states. However, to benefit from the settlement’s legal shield, the settlement had requirements — acts that must be taken. Requirements that representation agreements not charge “whatever the seller offers,” mandates that there be an agreement before touring, restraints on MLSs setting up off-MLS procedures for establishing cooperative compensation, etc. If a “covered entity” [party opting into the protections of the settlement] complied and continues to comply with the settlement terms, all copycat claims alleging same or similar claims as Sitzer would be settled or otherwise addressed. It should be understood, however, that the settlement does not protect actions that occur after the settlement [if here in 2025 you keep doing what caused the lawsuit back in the early 2020s, a new lawsuit can be brought against you, essentially saying “the settlement only covered you for things that happened before 2024.”].