Justice Department Can Reopen Realtors Case, Court Rules (3)

The Justice Department can reopen an antitrust probe into the National Association of Realtors, an appeals court ruled Friday, rejecting a bid by the real estate trade group to enforce a 2020 settlement with the Trump administration to close the case.

“The fact that DOJ ‘closed its investigation’ does not guarantee that the investigation would stay closed forever,” the US Court of Appeals for the DC Circuit wrote in a 2-1 decision. “The words ‘close’ and ‘reopen’ are unambiguously compatible.”

Former President Donald Trump’s administration in November 2020 reached a settlement with the group to end an antitrust investigation into its policies.

The proposed settlement included several requirements for the group — which represents more than 1.5 million agents — including boosting transparency about broker commissions and barring 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, President Joe Biden’s 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.

Judges Florence Y. Pan and Karen LeCraft Henderson sided with the Justice Department. Judge Justin Walker, who was appointed by Trump, dissented and said he would side with the real estate group. Pan is a Biden appointee. Henderson was nominated by former President George H. W. Bush.

“As articulated by Judge Walker in his dissenting opinion, NAR believes that the government should be held to the terms of its contracts,” the realtors’ group said in a statement. “We are reviewing today’s decision and evaluating next steps.”

The Justice Department said it was committed to “fighting to lower the cost of buying and selling a home.”

“Real estate commissions in the United States greatly exceed those in any other developed economy, and this decision restores the antitrust division’s ability to investigate potentially unlawful conduct by NAR that may be contributing to this problem,” Assistant Attorney General for Antitrust Jonathan Kanter said in a statement.

Read More: US Homebuyers Expecting $10,000 Savings Face Tough Reality

The industry has come under increased scrutiny in recent years, with a Missouri jury in October finding the NAR and others liable of colluding to keep commissions high in a $1.8 billion verdict. To resolve that case and others, the NAR agreed in March to a settlement that would pay sellers roughly $418 million, with the group saying it would also change some of its rules.

The settlement agreement, which needs to be approved by a court, could pressure fees over time, experts have said, although the exact impact is still uncertain.

(Updates with DOJ statement in ninth paragraph.)

--With assistance from Patrick Clark.

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

Elizabeth Wasserman, Katherine Chiglinsky

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