NAR Seeks Rehearing on DOJ Investigation Ruling

In a document filed Monday, May 20, 2024, the National Association of Realtors (NAR) filed a petition with the U.S. Court of Appeals for the District Court of Columbia Circuit. 

The goal of that petition is a rehearing of the court’s three-judge panel decision allowing the Department of Justice (DOJ) to reopen its investigation into the trade association. 

From the NAR petition: 

“The divided panel’s decision in this significant government-contract interpretation case goes ‘where no court has gone before,’ directly conflicts with precedents of this Court and the Supreme Court, and will reshape the landscape for all ‘who find themselves on the other side of the bargaining table’ with the government.”

DOJ vs NAR Backstory

Here’s a quick recap of the settlement back and forth between NAR and the DOJ:

• November 2020: The DOJ sent a letter to NAR agreeing to close its investigations after agreeing to a settlement. That settlement required NAR to improve its transparency regarding broker commissions and to stop misrepresenting buyer agent services as “free.”
• July 2021: With a new president in office, the DOJ withdrew the settlement, arguing that the settlement terms put undue restrictions on regulators, preventing their investigation of rules they deem harmful to consumers.
• September 2021: NAR filed a petition to either set aside or modify the DOJ’s probes.
• January 2023: Judge Timothy Kelly of the U.S. District Court for the District of Columbia ruled in favor of NAR, reasserting the earlier settlement terms. 
• March 2023: The DOJ appealed this ruling
• December 2023: A three-judge panel heard arguments from the DOJ and NAR
• April 2024: The panel ruled 2-1 in favor of the DOJ and allowing it to continue its investigations into NAR.

NAR’s petition for a rehearing argues that the only reason the DOJ put forth to justify reopening its investigation into the trade group was “its preference to do so.” 

The petition also claims a rehearing is justified because the three-judge panel’s decision “conflicts with at least three strains of circuit court and Supreme Court precedent.” NAR’s own reporting on the petition argues “the government should be held to the terms of its contracts.” 

“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. If the DOJ position adopted by the divided panel here is ultimately accepted, ‘businesses and private citizens w[ill] be exposed to perpetual uncertainty regardless of the commitments or representations made by the Government in settling investigations.’”  (NAR Petition)

NAR’s dispute with the DOJ does not affect its pending settlement agreement reached on March 15 to resolve private class action commission lawsuits. 

Meanwhile, at today’s Nosalek hearing…

We’re not done with DOJ news just yet. 

The DOJ also weighed in on NAR’s settlement agreement in the Sitzer/Burnett case during a status hearing on Tuesday for the Nosalek commission lawsuit (also known as MLS PIN). 

Jessica Leal, attorney for the DOJ, noted that the DOJ sees the settlement as an improvement, but that it may push for stricter rules beyond what’s in the agreement. 

In her statement, Leal said, 

“…offers of compensation should not be made anywhere, but certainly not on the MLS.”

The DOJ has not yet decided if it will intervene in the Sitzer/Burnett settlement agreement, but will make a decision on whether to file a statement around October. 

As far as the Nosalek lawsuit, Judge Patti Saris set the next hearing date for June 21. 

Stay tuned for updates as we learn more.