An appeals court granted the Department of Justice (DOJ) authority to reopen an antitrust probe into the National Association of Realtors (NAR) Friday.
In a 2-1 decision, a District of Columbia Circuit Court of Appeals panel of judges reversed a lower court decision to “set aside” a 2021 investigative subpoena from the Antitrust Division of the DOJ that it had issued in a previously closed investigation into NAR policies related to the commission and the choices of home sellers, per the Friday filing.
The NAR had previously settled with the DOJ during the Trump administration. The Biden administration nixed the settlement deal and opted to continue the investigation until a lower court blocked its ability to do so in 2023. The Friday court decision ruled that the case being previously closed didn’t mean it couldn’t be reopened, allowing the DOJ to continue its investigation into possible anti-trust behavior.
“In our view, the plain language of the disputed 2020 letter permits DOJ to reopen its investigation. We therefore reverse the judgment of the district court,” Judge Florence Pan wrote in the majority ruling on Friday.
At the center of the legal fight against the real estate trade organization are the high commission rates on home sales, paid by the buyer, which contribute to increasingly unaffordable home prices.
The realtor association recently agreed to pay $418 million in a settlement with home sellers over commission rates.
In a statement by the DOJ on Friday, Jonathan Kanter, assistant attorney general of the DOJ Antitrust Division, said “[r]eal-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.”
“The Antitrust Division is committed to fighting to lower the cost of buying and selling a home. I would like to commend the staff of the Antitrust Division and our colleagues in the department for achieving this important result,” Kanter continued.
Judge Justin Walker cited the NAR and DOJ’s previous agreement as his reason for dissent, stating that the NAR “made a contract with the Antitrust Division of the Department of Justice.”
“As in every contract, each side gained something, and each side gave something up,” Walker stated. “The Realtors agreed to give up four policies that DOJ considered anticompetitive. In exchange, DOJ promised that it had ‘closed’ its investigation into two other policies.”
The NAR slammed the ruling in a statement to The Hill, saying it is weighing how to proceed.
“As articulated by Judge Walker in his dissenting opinion, NAR believes that the government should be held to the terms of its contracts,” said NAR spokesman Mantill Williams. “We are reviewing today’s decision and evaluating next steps.The National Association of Realtors remains steadfast in our commitment to promoting consumer transparency and to supporting our members in protecting their clients’ interests in the home buying and selling process.”