The trade group’s petition leans heavily on the government’s promise to close investigations into the Clear Cooperation Policy and the Participation Rule.
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The National Association of Realtors is asking the highest court in the land to weigh in on its fight against a U.S. Department of Justice investigation.
The 1.5-million-member trade group filed a petition Thursday with the U.S. Supreme Court asking the court to review an April ruling by the U.S. Court of Appeals for the District of Columbia Circuit allowing the DOJ to reopen an investigation into NAR’s rules, including controversial rules around commissions and pocket listings at issue in multiple antitrust suits against NAR.
“[T]he majority’s position permitted DOJ to evade its contractual obligations based solely on its preference to do so — a result that no other litigant could obtain and no other court would permit,” the petition reads.
“The decision below thus directly conflicts with this Court’s precedent—as well as the uniform precedent of other courts of appeals—requiring courts to hold the federal government to its contractual obligations as if it were any other party.”
In 2019, the DOJ began an investigation into NAR’s recently-defunct Participation Rule, which required listing brokers to offer compensation to buyer brokers in order to submit a listing into a Realtor-affiliated multiple listing service, followed later by a probe into NAR’s Clear Cooperation Policy, which is still in effect and requires that listing be entered into Realtor-affiliated MLSs within one business day of being marketed publicly.
While NAR has gotten rid of the Participation Rule as part of a proposed nationwide settlement of antitrust claims, the CCP is currently being hotly-debated in the real estate industry, in part due to the DOJ’s scrutiny.
In an emailed statement, a NAR spokesperson told Inman, “Appealing to the Supreme Court to hear this important case and overturn the DC Circuit’s decision is important to NAR as we work on behalf of our members to fight to hold the Department of Justice to the terms of its agreement.”
In 2020, the DOJ and NAR agreed to a proposed settlement of the investigation and the DOJ sent NAR a letter saying it had closed its investigation of the two rules. However, after the Biden Administration took over from the Trump Administation, the DOJ withdrew from the settlement in July 2021 and resumed its probe into the policies.
“Although a new administration is free to change the government’s policies, it is not free to repudiate the government’s contracts,” NAR’s petition reads.
“The Government may well have changed its mind about the desirability of its agreement with NAR, but ‘wise or not, a deal is a deal.’”
NAR’s petition, like its previous legal filings, leans heavily on the DOJ’s agreement to close its investigation — though the federal agency contends it never agreed to not re-open the probe and said as much in its letter to NAR.
NAR has been fighting the DOJ’s investigation for years. The trade group asked a court in September 2021 “to quash a request by the Department of Justice that reneges on the terms of a settlement agreement.” After a federal judge sided with NAR in January 2023, the DOJ appealed and the appeals court overturned the lower court ruling, allowing the probe to resume. NAR asked for a rehearing, but the appeals court denied that request in July.
“The panel majority’s decision — in a court that decides many of the nation’s most important government-contract cases — threatens that stability and expectation of fair dealing by creating multiple unprecedented advantages for the government in the interpretation of its voluminous agreements,” NAR petition reads.
“As the dissent below aptly put it, the panel majority permits the government to agree to ‘close’ a case or investigation to ‘lure a party into the false comfort of a settlement agreement, take what it can get, and then reopen the investigation seconds later.’
“That result will inevitably affect private parties’ conduct going forward. If private parties ‘cannot trust that the Government will uphold its end of the bargain, they will be reluctant to enter agreements with the Government at all.’”
The petition is a long shot. According to the federal government, four of the nine justices on the Supreme Court must vote to accept a case and the court only accepts a tiny percentage of the cases it’s asked to review each year: 100-150 of more than 7,000 cases. The court usually only agrees to hear a case if it “could have national significance, might harmonize conflicting decisions in the federal Circuit courts, and/or could have precedential value.”
Read the petition (re-load the page if document is not visible):
Email Andrea V. Brambila.
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