The U.S. Department of Justice (DOJ) has filed an appeal of a lower court ruling that blocked the agency from investigating the National Association of Realtors (NAR) for potential antitrust violations.
The DOJ’s appeal, filed in the U.S. Court of Appeals for the District of Columbia Circuit, challenges a January ruling by U.S. District Judge Timothy Kelly, who granted NAR’s motion to quash a subpoena issued by the DOJ.
The subpoena sought information from NAR about two of its rules: the Participation Rule, which requires listing brokers to offer the same commission to all buyer-brokers when listing a particular property for sale on an MLS; and 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.
The DOJ argues that the two rules may violate antitrust laws by restricting competition in the real estate industry. The agency alleges that the Participation Rule may stifle competition among buyer-brokers by giving sellers’ brokers control over what buyers pay their brokers. The DOJ also alleges that the Clear Cooperation Policy may restrict the choices available to home sellers and listing brokers who want to market homes outside the NAR-affiliated MLS system.
NAR has denied any wrongdoing and has said that the two rules are necessary to protect consumers. The trade group has also argued that the DOJ’s investigation is politically motivated.
The DOJ’s appeal is the latest development in a long-running dispute between the agency and NAR. In 2018, the DOJ opened an antitrust investigation into NAR, alleging that the trade group’s rules may be anticompetitive. In 2020, the DOJ and NAR reached a settlement agreement that would have required NAR to make changes to the Participation Rule and the Clear Cooperation Policy. However, the Biden administration withdrew from the settlement agreement in July 2021.
The DOJ’s appeal is still pending in the U.S. Court of Appeals for the District of Columbia Circuit. It is unclear when the court will issue a ruling.
What does this mean for real estate agents?
The DOJ’s appeal could have a significant impact on the real estate industry. If the DOJ is successful in its appeal, it could lead to changes in the two rules that are being investigated. These changes could make it easier for real estate agents to compete with each other and could lead to lower commissions for buyers and sellers.
However, it is important to note that the DOJ has not yet won its appeal. The case is still pending in the U.S. Court of Appeals for the District of Columbia Circuit. It is also possible that the two rules will be upheld, or that the DOJ will reach a new settlement agreement with NAR.
Real estate agents should continue to monitor the situation and should consult with an attorney if they have any questions about the DOJ’s investigation or the potential impact of the case on their business.
Click Here to Review the DOJ filing. PS: the interesting parts start on page 15 of the 86 page document.