Mere weeks after being dealt a sizable blow by the Supreme Court, The National Association of REALTORS® (NAR) secured a more significant victory Wednesday when a U.S. District Court sided with the association in its ongoing dispute with the U.S. Department of Justice (DOJ).
Judge Timothy Kelly ruled that the DOJ needs to “set aside” its investigation into the NAR’s Participation Rule and the Clear Cooperation Policy, arguing that not doing so would “deprive NAR of the benefit for which it bargained.”
“The government, like any party, must be held to the terms of its settlement agreements, whether or not a new administration likes those agreements,” Kelly wrote in his ruling.
It’s been nearly two years since the Justice Department shocked the industry by announcing that it would withdraw from a settlement with NAR to continue investigating NAR’s multiple listing service (MLS) policies.
The move set off a series of courtroom and public volleys between the two entities, ultimately leading to NAR filing a lawsuit to quash the DOJ’s request to back out of the settlement claiming that it was a “complete, unprecedented breach” of their agreement.
NAR had also indicated that it had already begun to implement agreed-upon changes, which would repeal and modify specific rules based on the settlement.
The Justice Department retorted by asserting that it “never committed to refrain from further investigation into NAR and its practices.”
“In 2020, the United States and NAR discussed, and the United States eventually filed, a proposed settlement that would have culminated in entry of a consent judgment by the Court, but no consent judgment was ever entered,” said DOJ Senior Counsel James Luh in a 2021 court filing where the agency sought to have the courts deny NAR’s petition.
The DOJ and NAR have had a contentious relationship for decades over different aspects of NAR’s policies and how real estate has operated; however, both have managed to find ways of settling those disputes amicably.
In previous interviews, pundits have told RISMedia that both entities have had a pattern of working things out that has helped develop “relative certainty” that issues could be resolved and both parties could trust each other.
This latest dispute between NAR and the DOJ dates back to 2019 when the latter’s Antitrust Division began investigating certain practices and policies of NAR. A year later, the two parties began hashing out a possible settlement.
According to the filing, NAR began changing its policies to comply with the terms it and the Justice Department agreed upon towards the end of the year.
“The Participation Rule and Clear Cooperation Policy were not a part of the Stipulation and Proposed Final Judgment, though,” read an excerpt from the filing. “Thus, those rules ‘have not been changed, modified, or amended since the Antitrust Division closed its investigation in 2020.'”
In July 2021, the Antitrust Division reopened the investigations, and the DOJ requested to back out of the settlement.
Kelly ultimately agreed with NAR in his Wednesday ruling that the terms the two entities had agreed on in 2021 were still valid.
“The Antitrust Division’s commitment to close its investigations into the Participation Rule and Clear Cooperation Policy and effectively rescind the CID(civil investigative demand)—and to confirm those actions in writing—was essential to the parties reaching a settlement and is consistent with the partially integrated written agreement. So those commitments must be considered part of the overall agreement,” read an excerpt from the ruling. “With that common-sense interpretation of the parties’ settlement in hand, it is not hard to conclude that the new CID violates the agreement.”
NAR did not immediately reply to RISMedia’s request for comments on this story.
This is a developing story.
