Today, the National Association of Realtors (NAR) filed a writ of certiorari with the U.S. Supreme Court challenging the U.S. Department of Justice’s (DOJ) attempt to reopen a closed antitrust investigation.
At the core of this case is a 2020 settlement, which NAR argues should prevent the DOJ from resuming an investigation they agreed to close. The new filing asserts that a government body, particularly one devoted to justice, should honor its own commitments, despite any changes in (national) leadership.
Since the U.S. Court of Appeals sided with the DOJ on Friday, July 12 of this year, NAR’s appeal to the Supreme Court could change (or at least shine a light on) how the government handles settlements and agreements.
The outcome of this petition could shape the future of real estate practices—and possibly set a new precedent for contractual obligations at the government level and across various industries.
NAR vs. DOJ: The Supreme Court Appeal
On Thursday, October 10, NAR asked the U.S. Supreme Court to review the DOJ’s renewed antitrust investigation, detailing the years-long legal battle surrounding it.
NAR’s argument is the DOJ shouldn’t have the right to reopen an investigation it previously agreed to settle in 2020.
And while the U.S. Court of Appeals ruled in the DOJ’s favor in July 2024, NAR’s petition to the Supreme Court reasserts its conviction that the original settlement was final and binding.
NAR’s petition includes the following legal arguments:
- The government must honor its contractual obligations, including those set forth in the agreement reached between NAR and the DOJ to close the latter’s investigation—and not reopen cases due to changing preferences or a change in administration.
- No legal precedent allows a government body to reopen closed investigations
- The previous court’s decision (i.e., the U.S. Court of Appeals’ decision in the DOJ’s favor) is “exceptionally wrong and important,” with broad implications for government contracts in various contexts—including but not limited to the real estate industry.
The DOJ agreed to the settlement during the Trump administration and sought to reopen the investigation after Biden became president.
From the NAR filing:
“Restoring that principle (of contractual obligations) is critical because the government enters into contracts in a vast range of contexts… in which contracting partners rely on the government to keep its word.
“Although a new administration is free to change the government’s policies, it is not free to repudiate the government’s contracts.”
DOJ vs. NAR BACKSTORY
Here’s a quick recap of the NAR vs. DOJ settlement:
- 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, allowing it to continue its investigations into NAR.
- May 2024: NAR filed a petition for a rehearing of the court’s decision.
- June 2024: The DOJ responded to the petition stating that a “rehearing is not warranted.”
- July 2024: NAR’s request for a rehearing was officially denied on Friday, July 12.
- October 2024: NAR filed a petition with the U.S. Supreme Court, challenging the DOJ’s attempt to reopen a closed antitrust investigation.
DOJ’s Narrowed Focus and Ongoing Scrutiny
For its part, the DOJ has agreed to narrow its document requests to focus on NAR’s involvement in the Moehrl and Sitzer/Burnett lawsuits and the Clear Cooperation Policy, which is currently under fire.
Despite the DOJ’s persistence in the legal battle, NAR president Kevin Sears fully expects further inquiries from the Department into post-settlement real estate practices.
Stay tuned for more as the story develops.
