{"id":4423,"date":"2023-06-09T16:28:09","date_gmt":"2023-06-09T16:28:09","guid":{"rendered":"https:\/\/preprod.realtrends.com\/blog\/2023\/06\/09\/the-doj-wants-to-continue-investigating-nar\/"},"modified":"2025-03-13T02:51:38","modified_gmt":"2025-03-13T02:51:38","slug":"the-doj-wants-to-continue-investigating-nar","status":"publish","type":"post","link":"https:\/\/preprod.realtrends.com\/blog\/2023\/06\/09\/the-doj-wants-to-continue-investigating-nar\/","title":{"rendered":"The DOJ wants to continue investigating NAR"},"content":{"rendered":"\n<p>The <strong>Department of Justice<\/strong> filed its first brief in its appeal of <a href=\"https:\/\/preprod.realtrends.com\/blog\/articles\/nar-victorious-in-renewed-doj-antitrust-probe\/\" target=\"_blank\" rel=\"noreferrer noopener\">Judge Timothy J. Kelly\u2019s late January ruling<\/a> in favor of the <strong><a href=\"https:\/\/preprod.realtrends.com\/blog\/tag\/nar\/\" target=\"_blank\" rel=\"noreferrer noopener\">National Association of Realtors<\/a><\/strong> (NAR) \u2014 and it is a doozy.<\/p>\n\n\n\n<p>According to the brief, filed last Friday, the DOJ wants to resume\u00a0its \u201cconsequential investigation of conduct that affects over $100 billion in broker fees paid by Americans annually\u201d and states that is never agreed not to reopen its probe into NAR\u2019s Clear Cooperation Policy and <a href=\"https:\/\/preprod.realtrends.com\/blog\/articles\/is-it-time-to-add-a-buyer-representation-agreement-to-your-business-practice\/\" target=\"_blank\" rel=\"noreferrer noopener\">Participation Rule<\/a>.<\/p>\n\n\n\n<p>\u201cThe Department of Justice\u2019s Antitrust Division brings this appeal to restore its authority to investigate potentially anticompetitive rules, policies, and practices of the National Association of Realtors,\u201d the brief states. \u201cBecause NAR rules govern most residential home sales across the nation, they can have a significant economic impact on one of the most important transactions in many Americans\u2019 lives.\u201d<\/p>\n\n\n\n<p>In the brief, the DOJ claims that the lower court made \u201cseveral serious errors of basic contract law\u201d when it stopped its investigation into NAR.<\/p>\n\n\n\n<p>\u201cFirst, the District Court brushed aside the plain language of a letter merely reporting that an investigation had been closed and read into the letter an unstated forward-looking commitment not to further investigate NAR,\u201d the brief states. \u201cThis interpretation also improperly implied a waiver of a sovereign power against the United States and ignored several other textual indications that the Division had no intention to limit its investigative authority.\u201d<\/p>\n\n\n\n<p>In its most recent filing, the DOJ said Kelly\u2019s ruling led to an \u201cabsurd\u201d result, which meant that after the DOJ withdrew from the proposed settlement agreement, NAR was released from any obligations under the agreement. However, the DOJ is still not allowed to investigate the commission and pocket listing policies.<\/p>\n\n\n\n<p>The DOJ also disagreed with Kelly\u2019s comment that a change in presidential administration cannot be used to justify the reopening of the DOJ\u2019s investigation into NAR.<\/p>\n\n\n\n<p>\u201cThe court\u2019s implication that there is something improper about a prosecutor reopening an investigation that had reached no conclusion is wrong,\u201d the brief states. \u201cWhether as a result of changes in leadership, priorities, or other factors, in our constitutional system those decisions are well within the discretion of the Executive Branch. The Division insisted on maintaining the right to reopen its investigation precisely to preserve that prosecutorial discretion.\u201d<\/p>\n\n\n\n<p>In addition, the DOJ claims in the brief that the lower court \u201cmisinterpreted\u201d the original November 2020 settlement agreement between the department and NAR.<\/p>\n\n\n\n<p>\u201cThe plain text of the November 2020 letter states only that the Division \u2018has closed\u2019 its prior investigation; the letter said nothing about future investigations,\u201d the brief notes.<\/p>\n\n\n\n<p>\u201cMany things open after having closed, as law enforcement investigations often do. The District Court read a term into the letter \u2014 a commitment not to undertake any future investigations \u2014that is not there.\u201d<\/p>\n\n\n\n<p>The DOJ highlights that the settlement agreement \u201cexpressly reserved the United States\u2019 right to investigate \u2018any\u2019 NAR rule.\u201d<\/p>\n\n\n\n<p>According to the DOJ\u2019s most recent filing, the department opened the investigation into NAR after receiving a complaint \u201cfrom an industry participant,\u201d and alleges that the Clear Cooperation Policy was \u201c[p]rompted by competition from upstart listing services\u201d and \u201crestricts the choices available to home sellers and listing brokers who want to market homes outside the NAR-affiliated MLS system and potentially excludes new listing services that seek to compete against MLSs for home listings.\u201d<\/p>\n\n\n\n<p>The DOJ also claims that NAR\u2019s buyer broker compensation and pocket listing policies, \u201cby effectively affording sellers\u2019 brokers control over what buyers pay their brokers, the rule could curtail price competition among buyer-brokers,\u201d the June 2023 brief states. \u201cPotentially exacerbating these effects, buyer-brokers could steer customers to higher-commission listings \u2014 or discourage sellers\u2019 agents from offering lower commissions.\u201d<\/p>\n\n\n\n<p>In November 2020, the DOJ\u2019s antitrust division agreed to a settlement after investigating the trade groups listing and\u00a0<a href=\"https:\/\/preprod.realtrends.com\/blog\/articles\/is-it-time-to-add-a-buyer-representation-agreement-to-your-business-practice\/\" target=\"_blank\" rel=\"noreferrer noopener\">agent compensation policies<\/a>.\u00a0The settlement proposed at the time included requirements for NAR to boost transparency about broker commissions and stop misrepresenting that buyer broker services are free.<\/p>\n\n\n\n<p>However, the DOJ, under new leadership in the Biden administration, withdrew the settlement\u00a0<a href=\"https:\/\/preprod.housingwire.com\/articles\/is-nar-ready-to-rumble-with-doj\/?__hstc=43385018.5f1ddc53e010c2865f96cc27f29fdd65.1672670841746.1686260847998.1686322175138.346&amp;__hssc=43385018.2.1686322175138&amp;__hsfp=1390145134\" target=\"_blank\" rel=\"noreferrer noopener\">in July 2021<\/a>. In the June 2023 brief, the DOJ states that \u201cresuming the investigation into these rules was warranted and necessary in light of evidence of the continuing threat of anticompetitive effects of NAR\u2019s rules, policies, and practices on the residential real-estate industry.\u201d<\/p>\n\n\n\n<p>NAR filed a&nbsp;<a href=\"https:\/\/preprod.housingwire.com\/articles\/doj-probes-nar-pocket-listings-ban\/?__hstc=43385018.5f1ddc53e010c2865f96cc27f29fdd65.1672670841746.1686260847998.1686322175138.346&amp;__hssc=43385018.2.1686322175138&amp;__hsfp=1390145134\" target=\"_blank\" rel=\"noreferrer noopener\">petition<\/a>&nbsp;in September 2021 to set aside or modify the DOJ\u2019s probes into the trade group. In his ruling, Kelly stated that allowing the DOJ investigation to continue would take away the benefits NAR had negotiated in the original settlement.<\/p>\n\n\n\n<p>Judge Kelly ruled in <a href=\"https:\/\/preprod.realtrends.com\/blog\/articles\/despite-doj-verdict-nar-isnt-out-of-the-antitrust-woods-just-yet\/\" target=\"_blank\" rel=\"noreferrer noopener\">late January<\/a> that the earlier settlement terms reached by NAR and the DOJ were still valid.<\/p>\n\n\n\n<p>\u201cThe government, like any party, must be held to the terms of its settlement agreements, whether or not a new administration likes those agreements,\u201d Kelly, a Trump appointee, wrote in his ruling.<\/p>\n\n\n\n<p>The DOJ <a href=\"https:\/\/preprod.realtrends.com\/blog\/articles\/doj-appeals-decision-in-nar-antitrust-probe\/\" target=\"_blank\" rel=\"noreferrer noopener\">appealed this ruling in March<\/a>.<\/p>\n\n\n\n<p>The NAR now has until July 21 to file its brief with the appeals court.<\/p>\n\n\n\n<p>\u201cNAR has upheld our end of the agreement, and we expect the DOJ to do the same,\u201d Mantill Williams, a NAR spokesperson, wrote in an email. \u201cAs stated in the court\u2019s original decision \u2018The government, like any party, must be held to the terms of its settlement agreements\u2026\u2019 It is alarming that the DOJ would try to resume an investigation that the Department committed to closing more than two years ago.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The DOJ filed its first brief in its appeal of the late-January ruling about its anti-trust investigation into NAR.<\/p>\n","protected":false},"author":34740,"featured_media":4822,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3255],"tags":[],"coauthors":[1760],"class_list":["post-4423","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-archive"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v25.4 (Yoast SEO v26.8) - 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