DOJ appeals NAR win in probe of commission, pocket listing rules

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The U.S. Department of Justice has filed an appeal seeking to overturn a lower court ruling in favor of the National Association of Realtors that limits the antitrust enforcer’s ability to investigate the trade group’s policies regarding buyer broker commissions and pocket listings.

The Jan. 25 ruling set aside the DOJ’s request for information from NAR on those policies and drew a variety of reactions from agents, brokers and other industry players, demonstrating divisions within the real estate industry over the two controversial rules. NAR has 1.5 million members nationwide.

On Friday, the DOJ formally appealed the ruling to the U.S. Court of Appeals for the District of Columbia Circuit. The agency’s filing did not contain other details on the appeal or say when the DOJ would submit its opening brief laying out its arguments against the ruling. Inman has reached out to the DOJ and will update this story if and when a response is received.

The rules at issue in this case are the subject of multiple antitrust lawsuits filed against NAR filed by private parties, some in which the DOJ has intervened. No matter what happens with the DOJ’s investigation, those lawsuits are ongoing.

Mantill Williams

In an emailed statement, NAR spokesperson Mantill Williams told Inman, “Regardless of the DOJ’s appeal, we remain confident in our position and that we will ultimately prevail. NAR has upheld our end of the agreement, and we simply expect the DOJ to do the same.”

“NAR guidance for local MLS broker marketplaces has long been recognized to promote fair, transparent and competitive real estate markets for consumers and businesses,” he added.

In 2019, the DOJ sent NAR a civil investigative demand (CID) over several of its rules. The parties came to a settlement while the DOJ was under the Trump administration but after the Biden administration took over, the agency abruptly withdrew from that settlement agreement on July 1, 2021.

Days later, the agency sent NAR another CID seeking new information on two of the trade group’s rules:

• The Participation Rule requires listing brokers to offer a blanket, unilateral offer of compensation to buyer brokers in order to submit a listing into a Realtor-affiliated MLS.
• The Clear Cooperation Policy requires listing brokers to submit a listing to their Realtor-affiliated MLS within one business day of marketing a property to the public.

In September 2021, NAR filed a petition attempting to quash the DOJ’s demand, contending NAR only agreed to the settlement after assurances that it would receive a letter affirming the DOJ had closed its investigations into the Participation Rule and Clear Cooperation Policy. The DOJ subsequently sent that letter.

In January, Judge Timothy J. Kelly of Washington, D.C.’s district court granted NAR’s petition, ruling that the demand violated the “validly executed settlement agreement” between the two parties.

“At bottom, not setting aside the CID at issue would deprive NAR of the benefit for which it bargained: The closure of the Antitrust Division’s investigation into its Participation Rule and Clear Cooperation Policy,” Kelly, a Trump appointee, wrote in a memo accompanying the order.

“The government, like any party, must be held to the terms of its settlement agreements, whether or not a new administration likes those agreements. For this reason, the CID at issue must be set aside.”

Kelly, however, did not rule out future investigations against NAR or even of the rules at issue if NAR were to change the rules or the way it enforces them.

Email Andrea V. Brambila.

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