The group’s petition hinges heavily on the government’s promise to close the investigation with a Clear Cooperation Policy and Participation Act.
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The National Association of Realtors is asking the nation’s highest court to review its battle with the US Department of Justice investigation.
The 1.5 million-member trade group filed a petition Thursday in the US Supreme Court asking the court to review an April decision by the US Court of Appeals for the District of Columbia Circuit allowing the DOJ to reopen an investigation into the NAR rules, including the controversy. Laws about commissions and out-of-pocket listings are at issue in many anti-NAR suits.
“[T]the majority’s position allowed the DOJ to avoid its contractual obligations based solely on its choice to do so — a result that no other defendant could achieve and no other court would allow,” the petition reads.
Thus the decision below is in direct conflict with this Court’s precedent—and the precedent of other courts of appeals—requiring courts to hold the federal government to its contractual obligations as if it were the other party.”
In 2019, the DOJ began an investigation into NAR’s recently-expired Participation Rule, which required listing agents to provide compensation to potential buyers to deliver listings to a Realtor-related listing service, followed later by NAR’s Clear Cooperation investigation. The policy, which is still in effect, requires listings to be posted on the Realtor-affiliated MLS within one business day of public marketing.
Although the NAR has repealed the Shareholding Act as part of a proposed settlement of antitrust claims nationwide, the CCP is currently being debated in the real estate industry, in part because of the DOJ’s investigation.
In an emailed statement, an 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 with our members to fight to hold the Justice Department to its bargain.”
In 2020, DOJ and NAR agreed on a proposed resolution of the investigation and DOJ sent NAR a letter saying it had closed its investigation into both laws. However, after the Biden Administration took over from the Trump Administration, the DOJ withdrew from the agreement in July 2021 and resumed its investigation into the policies.
“While the new administration is free to change government policies, it is not free to deny government contracts,” reads the NAR petition.
“The Government may have changed its mind about the desirability of its agreement with the NAR, but ‘smart or not, a deal is a deal.’
NAR’s request, like its previous official documents, is largely dependent on the DOJ’s agreement to close its investigation — though the federal agency contends it has never agreed not to reopen an investigation and said as much in its letter to NAR.
NAR has been fighting the DOJ investigation for years. The trade group asked the court in September 2021 “to dismiss the Justice Department’s request to revoke the terms of the settlement agreement.” After a federal judge sided with NAR in January 2023, the DOJ filed suit and an appeals court overturned the lower court’s decision, allowing the investigation to continue. NAR requested a retrial, but an appeals court denied that request in July.
“The majority’s decision – in a court that decides many of the most important government contract cases in the country – threatens stability and expectations of efficiency by creating unprecedented benefits for the government in the interpretation of its largest contracts,” reads the NAR petition. .
“As the dissent below puts it well, the panel majority allows the government to agree to ‘close’ a case or investigation in order to ‘lure a party into the false comfort of a settlement agreement, take what they can, and reopen the investigation.’ seconds later.’
“That result will definitely affect the behavior of independent groups going forward. If private organizations ‘cannot trust the Government to uphold its end of the bargain, they will be reluctant to enter into agreements with the Government at all.’”
The application takes a long time. According to the federal government, four out of nine Supreme Court justices must vote to accept a case and the court accepts only a small percentage of the cases it is asked to review each year: 100-150 of more than 7,000 cases. The court will usually agree to hear a case if it “may have national importance, may harmonize conflicting decisions in regional courts, and/or may have priority value.”
Read the application (reload the page if the document is not visible):
Email Andrea V. Brambila.
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