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The federal government should be compelled to keep its promise to not investigate the National Association of Realtors’ commission and pocket listing policies or else risk future antitrust settlements with businesses, the U.S. Chamber of Commerce told an appeals court Friday.
The Chamber filed a “friend of the court” brief in support of NAR in its litigation against the U.S. Department of Justice. The U.S. Court of Appeals for the District of Columbia Circuit is currently considering whether to overturn a lower district court ruling setting aside a July 2021 request from the DOJ for information from NAR on its Clear Cooperation Policy around pocket listings and Participation Rule on commissions.
In its amicus brief, the Chamber noted that the government settled 85 percent of civil antitrust cases it brought between 2010 and 2019.
“Such settlements are good all around — the Government lacks the resources to bring every case to trial, and settlement agreements allow parties to resolve the Government’s concerns without burdening private parties and the courts,” attorneys for the Chamber wrote.
“But if private parties think that the Government may turn around mere months later and reopen the very investigation it promised to close — as it did here — they will think twice about entering such settlement agreements. Thus, the Government’s position is not only unlawful and unfair but counterproductive to the efficient administration of justice.”
The Chamber describes itself as the world’s largest business federation, representing about 300,000 direct members with more than 3 million companies and professional organizations under them.
The DOJ declined to comment for this story. In an opening brief to the appeals court in June, attorneys for the DOJ argued that the agency never agreed not to reopen a probe into NAR’s commission and pocket listing policies when it sent NAR a letter in November 2020 telling the trade group that it had closed its investigation into the rules. The antitrust enforcer reopened the investigation about seven months later, after withdrawing from a proposed settlement with NAR and a change in presidential administrations.
The DOJ reopened its probe with a new civil investigative demand (CID) — a type of administrative subpoena — seeking information on the trade group’s rules, including:
- The Participation Rule, which requires listing brokers to offer a blanket, unilateral offer of compensation to buyer brokers in order to submit a listing into a Realtor-affiliated multiple listing service.
- The Clear Cooperation Policy, which requires listing brokers to submit a listing to their Realtor-affiliated MLS within one business day of marketing a property to the public.
NAR, which boasts 1.5 million members, maintains that it only agreed to the proposed settlement with DOJ, which outlined changes to other NAR MLS-related policies, in return for the agency’s closure of its investigation of those two rules.
“If adopted here, the Government’s position would have deeply troubling impacts on the business community,” the Chamber’s brief said.
“Contracting with the Government can often be an expensive and onerous undertaking. In settling disputes with the Government, as illustrated here, businesses are often required to make significant changes to their practices and structures, as well as to submit to consent decrees (which constitute their own form of intrusion).
“If businesses cannot trust that the Government will uphold its end of the bargain, they will be reluctant to enter agreements with the Government at all. The Government’s position here will thus have ‘the certain result of undermining the Government’s credibility at the bargaining table and increasing the cost of its engagements.'”
Echoing a brief NAR filed with the appeals court on July 21, the Chamber emphasized that overturning the lower court ruling and allowing the DOJ’s investigation to proceed would undermine the rule of law.
“Despite wielding immense power, the Government remains bound by its obligations regardless of its current personnel,” the brief said. “This is a necessary feature of our nation’s commitment to the rule of law, which has created a stable, fair, and predictable contracting system that in turn has promoted economic growth and innovation.”
Mantill Williams
In an emailed statement, NAR told Inman that it was “pleased” by the Chamber’s support of its position.
“We believe their position further reiterates that the district court’s previous careful decision that, ‘The government, like any party, must be held to the terms of its settlement agreements…’ is correct, and it ultimately should be affirmed,” NAR spokesperson Mantill Williams said.
“As we said in our earlier brief, after having signed an agreement previously, the Department of Justice’s (DOJ) argument that it can resume its investigation based solely on a change of leadership or change of heart lacks legal merit. NAR has upheld our end of the agreement, and we expect the DOJ to do the same.
“It is alarming that the DOJ would try to resume an investigation that the Department committed to closing more than two years ago. NAR guidance for local MLS broker marketplaces has long been recognized to ensure fair, transparent and competitive real estate markets for consumers and businesses.”
The deadline for the DOJ to file another appeals court brief is August 11. Oral arguments in the case have not yet been scheduled.
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.
