Although the Supreme Court did not explain the reasons for its decision, it will allow the Justice Department to reopen its investigation into the association’s cooperation compensation provisions.
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The National Association of Realtors faced another legal blow Monday after the U.S. Supreme Court declined to take the case against the Department of Justice.
The Supreme Court did not explain its reasons for the decision, but it allows the Justice Department to reopen its investigation into the association’s controversial board and pocket listing rules.
A NAR spokesperson told Inman, “Although the Supreme Court ultimately decided not to review the lower court’s decision, NAR remains committed to doing everything in its power to serve the interests of its members and the consumers they serve. We will continue to make every effort to fight the situation.”
It’s unclear how NAR will continue its fight. NAR’s denial of the appeal means the case will be returned to the district court where NAR’s motion to suspend or modify the Justice Department’s investigation was originally filed.
Now that NAR has failed to block the investigation, industry groups may seek to reduce the administrative subpoenas that the Department of Justice sent to industry groups in July 2021 to make them less onerous.
The subpoena, also known as a civil investigative demand (CID), sought information regarding some of NAR’s rules, including:
Participation rules are now obsolete. This required listing brokers to provide comprehensive, unilateral indemnification to buyer brokers in order to submit listings to real estate agent-affiliated multiple listing services. Our clear cooperation policy requires listing brokers to submit listings to the MLS that partners with real estate agents within one business day of selling a property to the public.
Both rules have been the subject of multiple antitrust lawsuits, some of which are still pending. NAR eliminated the Participation Rule, also known as the Collaborative Compensation Rule, last year as part of a landmark $418 million nationwide settlement of fee-related litigation. The agreement also prohibited listing brokers from making pre-emptive offers of compensation to buyer brokers through the MLS.
But the Justice Department said the settlement doesn’t go far enough and that federal regulators want to prevent listing brokers and sellers from making preemptive offers of compensation to buyer brokers anywhere, including outside the MLS. It was shown that Reopening an investigation into the rule could be the first step for the Justice Department toward litigation against NAR.
NAR and the Department of Justice reached a settlement in November 2020 that provided the association with some clarification regarding its now-defunct co-op fee provision and access to the lockbox for non-MLS agents. I decided to do this.
However, in July 2021, the Department of Justice withdrew from the settlement, citing NAR’s refusal to agree to amendments that would protect the Department’s right to investigate future anticompetitive claims. Months later, it was revealed that the Justice Department had reopened its investigation into NAR’s board and pocket listing rules, days after it withdrew from the settlement and dropped the initial charges.
NAR took action in hopes of getting the Justice Department to uphold its original agreement. NAR filed suit with the U.S. Court of Appeals for the District of Columbia Circuit in December 2023, and after that failed, NAR filed a lawsuit with the U.S. Court of Appeals for the District of Columbia Circuit in October, ruling that the Department of Justice “must keep its contractual promises.” A motion was filed to have the matter handed over to the court. Just like any other political party. ”
“If this decision is allowed to stand, many people, from sophisticated corporations vital to our nation’s economy to criminal defendants who face vast prosecutorial advantages of the government, will continue to use the government’s would destabilize the interests of the diverse private entities that contract with the NAR,” NAR lawyers wrote. Declaration for October.
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