The Supreme Court did not explain its reasoning for the ruling, which will now allow the Justice Department to reopen its investigation into the federal collective bargaining agreement.
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The National Association of Realtors faced another legal challenge Monday when the US Supreme Court refused to take the Justice Department’s case against it.
The Supreme Court did not explain its reasoning for the ruling, which now allows the Justice Department to reopen its investigation into the agency’s questionable commission and pocket listing rules.
“Although the Supreme Court ultimately decided to challenge the lower court’s decision, NAR remains committed to taking every step to fight for the interests of our members and the consumers they serve,” a NAR spokesperson told Inman in a statement.
How the NAR will continue to fight is unclear. NAR’s loss of its appeal means the case returns to the district court where NAR’s request to temporarily halt or modify the DOJ investigation was originally filed.
Now that NAR has failed to stop the investigation, the trade group may try to get the DOJ to send the trade group back in July 2021 to reduce it.
The subpoena, also known as a civil investigative demand (CID), sought information on some of the NAR’s laws, including:
- The defunct Participatory Act, which required listing agents to provide blanket, collective compensation offers to buyer agents for submitting a listing on a Realtor-affiliated listing service.
- Clear Affiliate Policy, which requires listing sellers to post listings on their MLS related Realtor within one business day of marketing the property to the public.
Both laws have been the subject of numerous antitrust lawsuits, some of which are ongoing.
The NAR eliminated the Shareholder Act, also known as the affiliate compensation law, as part of its landmark settlement of $418 million in commission-related lawsuits nationwide last year. The agreement also prohibits listing sellers from making early offers to potential buyers through the MLS.
However, the DOJ pointed out that the amendment did not go far enough and the federal agency would like sellers and listed sellers to be able to make early offers to buyers anywhere, including outside the MLS.
The NAR’s statewide stay is not binding on the DOJ and does not prevent the agency from pursuing the trade group for the same policies addressed in the commission’s lawsuits. Resuming its investigation into the Stakeholder Act may be the DOJ’s first step on the road to a lawsuit against NAR.
Similarly, the DOJ may also choose to refer to the Clear Cooperation Policy. An antitrust enforcer is limited in cases that challenge the law. The CCP has been hotly debated in the real estate industry for several months and is currently being reviewed by the NAR leadership team for possible changes.
The DOJ’s July 2021 CID requested “all documents” covering a wide range of topics, including not only the commission and package listing rules, but also the non-bundling rule that allows MLSs to require sellers to display MLS and non-MLS listings separately. , buyer guidance based on commissions offered to listing sellers, buyer and seller rebates and the Moehrl commission and Sitzer/Burnett antitrust cases.
Screenshot from July 6 DOJ CID related to NAR commission rules
“The requests for ‘all documents’ are broad and seek privileged information,” reads NAR’s September 2021 filing in district court.
Screenshot from the July 6 DOJ CID related to the NAR packet listing policy
Discount brokerage REX Real Estate sued the NAR over its non-merger rule. REX is currently requesting a retrial in that case and the DOJ has requested oral arguments in the federal court in February.
In November, the NAR Executive Committee passed a motion requiring the NAR “to make available MLS counsel of its own choice to Realtor associations that wish to be represented pursuant to Civil Investigative Demands issued by the Department of Justice regarding the MLS’s operating law, and that the team’s expenses these consultants are paid from the budget of the Legal Action Plan.”
The stated reason for the move is to “create costs and time to respond to multiple CIDs … based on the same subject.”
NAR said representation will be available until the CID is satisfied but will not cover any legal costs if the DOJ decides to sue MLS.
NAR and the DOJ reached a proposed settlement in November 2020, which resulted in the association making several clarifications regarding the defunct association’s compensation rule and lockbox access to agents who are not enrolled in the MLS.
However, in July 2021 the DOJ withdrew from the agreement, saying that the NAR refused to agree to changes that would protect the Department’s right to investigate antitrust claims in the future. A few months later it was revealed that the DOJ had reopened its investigation into the NAR commission and anti-packaging rules just days after withdrawing from the settlement and dropping its original complaint.
The NAR jumped into action, hoping to force the DOJ to hold the original agreement. NAR filed its case before the U.S. Court of Appeals for the District of Columbia Circuit in December 2023, and when that failed, NAR filed a petition in October to have the case transferred to the Supreme Court, arguing that the DOJ should uphold “only contractual promises.” like other groups.”
“If vacated, the decision below will harm the interests of various private parties that contract with the government, from high-profile firms that are vital to our nation’s economy to criminal defendants who face substantial government prosecution benefits,” NAR attorneys wrote. October installation.
Email Andrea V. Brambila.
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