US Realtors Face Renewed Risk of Federal Antitrust Probe (1)

The National Association of Realtors may face a renewed antitrust probe, after a panel of judges appeared skeptical of its claims that the US is barred from reopening the investigation.

The NAR argued at a hearing Friday, at the US Court of Appeals for the DC Circuit, that a 2020 Justice Department letter seemingly closing the probe prevents the agency from pursuing it again.

“If I close the door, does that mean I’m never going to open it again?” said Judge Florence Y. Pan. “I’m looking at this letter and I don’t see how you can read it to make any commitments about the future.”

The Trump administration in November 2020 reached a settlement with the group to end the antitrust investigation into its policies. The DOJ had been investigating the trade group’s home listing and agent compensation policies since 2019.

The proposed settlement included several requirements for NAR, including boosting transparency about broker commissions and ending claims that real estate buyers don’t pay for any services. The Justice Department issued a letter stating that it was closing the probe in connection with two of the group’s other rules.

Eight months later, the Biden administration withdrew from the settlement, which hadn’t been finalized, and sought to continue the probe. The organization sued, arguing that the closing letter prevented the Justice Department from restarting its investigation. A lower court judge agreed and the Justice Department appealed.

The NAR, which has more than 1.5 million members, is facing a slew of antitrust cases that allege the group colluded to keep real estate agent commissions high. On Oct. 31, a Missouri jury in one of those suits sided with the plaintiffs in a verdict that could result in multibillion-dollar damages. The group is appealing.

Additional cases are looming, including another class-action suit over commissions in Illinois, which is expected to go to trial early next year. Damages in that case could reach $40 billion, posing an existential risk to the trade group.

But the biggest threat to the status quo is the Justice Department. The agency also recently injected itself into a Massachusetts lawsuit that centers on buyer commissions, a move that may indicate it wants to decouple buyer and seller commissions.

Christopher Michel, a lawyer for the group, called it “an alarming proposition” that the government can simply reopen an investigation after agreeing to shutter it.

“Closing has to mean something more than the government having the same discretion it did after it made the promise to close,” he said. “Otherwise, the promise doesn’t mean anything.”

Judge Justin Walker, who was appointed by former President Donald Trump, told the NAR that they had taken a chance. Pan was appointed by President Joe Biden.

“You gained the benefit of being pretty confident that if the personnel and the antitrust division didn’t change after the election, you’d be good to go,” said Walker. “You made that bet and you lost.”

(Updates with additional details beginning in sixth paragraph.)

To contact the reporter on this story:
Leah Nylen in Washington at lnylen2@bloomberg.net

To contact the editors responsible for this story:
Sara Forden at sforden@bloomberg.net

Anthony Aarons, Peter Jeffrey

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