In its response to NAR’s appeal, the Department of Justice acknowledged that it closed investigations into two NAR policies in 2020 but did not agree not to reopen the investigations.
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The Justice Department clearly retains the authority to reopen investigations into policies developed by the National Association of Realtors, and therefore should be free to continue investigating those policies, the agency ruled Wednesday in the Supreme Court’s ruling. This was stated in the documents submitted to.
Justice Department lawyers responded to an appeal NAR filed with the high court in October. In the appeal, a trade group of real estate agents asked the judge to reconsider an April ruling by the U.S. Court of Appeals for the District of Columbia Circuit that allowed the Justice Department to reopen the investigation. It was incorporated into NAR’s rules, including controversial rules regarding fees and pocket listings that have been the subject of multiple antitrust lawsuits against NAR.
The Justice Department acknowledged in its filing that it had agreed in 2020 to conclude its investigation into rules of participation and clear cooperation policies.
“There is no dispute that in 2020, the Department agreed to ‘close’ its investigation regarding two of Petitioner’s rules: Rules of Participation and Clear Cooperation Policy,” the Justice Department wrote. “At issue is whether the department not only agreed to end the investigation, but also agreed not to reopen it.”
The Department of Justice said it retained the right to revisit the policy at some point in the future through settlement negotiations with NAR.
“During the negotiations, the Department repeatedly informed appellant that even if the department agreed to close the investigation, it could not promise to refrain from future investigations under appellant’s rules,” the Justice Department wrote to the Supreme Court. said.
The Justice Department wrote that it began investigating NAR’s rules in 2018 after complaints from industry participants.
Specifically, the department was considering rules of participation and a clear cooperation policy. Participation rules required listing brokers to provide compensation to buyer brokers. A clear cooperation policy requires listing agents to list a property on the multiple listing service within one day of the property being sold.
The Department of Justice issued two civil investigative demands (CIDs) requesting substantive documentation regarding two policies.
The parties ultimately negotiated a settlement in which the Department of Justice concluded its investigation, and the Department of Justice filed a settlement proposal with the U.S. District Court in November 2020.
Eight months later, in July 2021, the Ministry of Justice submitted a new CID seeking information on participation rules and a clear cooperation policy.
NAR challenged the decision in district court and won a favorable ruling, but it was reversed on appeal earlier this year.
In October, NAR took the issue to the Supreme Court.
“[T]The majority position allowed the Department of Justice to avoid contractual obligations based solely on its own wishes, an outcome that other litigants could not obtain and that no other court would allow. ” says the petition.
In response, the Department of Justice said it has made clear through negotiations with NAR and other meetings that it reserves the right to launch an investigation in the future.
The court said the appellate court had invoked “a well-established principle that a contract should not be construed as ‘transferring the sovereignty of the United States’ unless the government unambiguously waives that right.” said.
Meanwhile, the Department of Justice concluded its investigation in 2020, eliminating the need to respond to the CID with the possibility that the investigation would not be reopened, and by using that closure in its antitrust case at the time. NAR wrote that it benefited.
“The Court of Appeals in this case finds that the government has not made a commitment to refrain from reopening an antitrust investigation it has closed,” the Justice Department wrote to the Supreme Court. “That decision is correct and consistent with decisions of this court and other appellate courts.”
“Thus, the government’s decision to reopen the investigation did not include a withdrawal or repudiation of any ‘binding’ undertakings,” the lawyers wrote. “Because the following decisions do not relate to the questions posed in the petition, this action is inadequate as a vehicle for judicial review.”
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