In another loss for the National Association of Realtors, a court ruled that the U.S. Department of Justice can reopen its investigation into commission-sharing rules.
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The U.S. Department of Justice can reopen its investigation into the National Association of Realtors board of directors rules, according to a ruling Friday by the U.S. Court of Appeals for the District of Columbia.
Five years ago, the Department of Justice began an investigation into NAR’s cooperative compensation rule, also known as the participation rule.
The DOJ and NAR reached an agreement on a proposed settlement of the 2020 investigations, and the DOJ sent a letter to the NAR indicating it had concluded its investigation into the two rules. However, after the White House changed hands, the Justice Department withdrew from the settlement in July 2021 and resumed its investigation of the rule.
NAR has successfully petitioned a lower court to quash the subpoena. That ruling was overturned in a split ruling on Friday.
“The district court granted NAR’s petition and concluded that the new subpoenas were barred by the validly executed settlement agreement. We disagree,” court ruling. “We therefore reverse the district court’s decision.”
The court held that the “plain language” of the 2020 letter left open the possibility for the Justice Department to reopen the investigation.
The three-judge panel heard oral arguments on December 1, at a time when NAR was still publicly stating that it would appeal the Sitzer | Burnett’s verdict. On March 15, NAR announced it would resolve this case and others that continue to spread across the country, all focusing on essentially the same thing.
Friday’s ruling allows the Justice Department to continue its campaign to put pressure on the real estate industry.
Judge Justin R. Walker wrote a dissenting opinion saying the Justice Department had a contract with NAR and that reopening the investigation would violate that contract.
“As in every contract, both parties gain something and both parties give up something,” Walker wrote. “Realtors agreed to drop four policies that the Justice Department deemed anticompetitive. In exchange, the Justice Department promised to have ‘closed’ its investigation of two additional policies.”
Walker has previously said NAR’s settlement with the Justice Department is a bet that the department and its staff will not change under the Biden administration and that the Justice Department will let the matter rest.
“The benefit you get is a lot of confidence that if there are no changes in personnel and antitrust after the election, you can leave,” Walker said during the December debate. “You made a bet and you lost.”
NAR spokesman Mantill Williams noted Walker’s objections in a statement and said it is considering its options.
“As Judge Walker set out in his dissent, NAR believes the government should abide by the terms of the contract,” Williams said. “We are reviewing today’s decision and assessing next steps.”
This article will be updated.
