NAR continues its battle to keep DOJ case closed
An appeals court ruled that the government could reopen its investigation. NAR says that decision involved “far-reaching and exceptionally important” errors.
While the National Association of Realtors awaits the finalization of its March 15 settlement with home sellers, the organization is turning its attention to a previously closed chapter in the ongoing commissions litigation: NAR's battle with the U.S. Department of Justice.
On Monday, the trade association filed a rehearing petition with the U.S. Court of Appeals in its case involving the DOJ. The petition is in response to an April ruling, where a panel of judges ruled that the government agency could reopen its investigation into potentially anticompetitive real estate practices resulting from rules set by NAR.
On Tuesday, the court ordered the DOJ to respond to the petition within the next 15 days.
What NAR had to say: In the latest filing, NAR attorneys said the panel's April decision goes "where no court has gone before" and conflicts with other decisions made by the appeals court as well as the Supreme Court. The attorneys argued that the decision will fundamentally change the landscape for those at the bargaining table.
"The panel's errors are far-reaching and exceptionally important. Every day, federal agencies resolve civil and criminal enforcement actions through agreements with private parties. It is a bedrock principle that the government must honor its word in those contracts, no matter who occupies the White House or leads the Antitrust Division," NAR attorneys argued in the filing.
Background: The antitrust case was originally settled back in 2020 during the Trump administration. In 2021, following a change in administrations, the DOJ wanted to withdraw from the deal and reopen the investigation. That request was rejected in district court, but the Court of Appeals reversed that decision.
The arguments have come down to the wording of the agreement. It was stated in the settlement that the case was closed, and judges have been wrestling with whether that implies it could never be reopened.
This case is separate from Sitzer/Burnett and others brought by home sellers, which NAR settled in March for $418 million in damages. The rule changes coming out of that agreement are set to take effect in August, while a hearing to finalize the terms is scheduled for November.
Impact: The decision as to whether the DOJ can reopen its investigation could have major ramifications for the industry. In February, the DOJ filed a Statement of Interest in response to the MLS PIN settlement in the Nosalek case. In its statement, the DOJ called for fundamental changes to how commissions should be handled.
Those arguments could provide a blueprint for the government's case against NAR, if the court allows it to be reopened.