An appeals court has given the Department of Justice (DOJ) the power to restart an antitrust investigation into the National Association of Realtors (NAR) on Friday.
In a 2-1 decision, a panel of judges in the District of Columbia Circuit Court of Appeals overturned a lower court ruling that dismissed a 2021 investigative subpoena from the Antitrust Division of the DOJ concerning NAR's policies on home seller commissions and choices. Friday filing.
During the Trump administration, the NAR had previously settled with the DOJ. The Biden administration cancelled the settlement and decided to continue the investigation until a lower court prevented it from doing so in 2023. The decision on Friday ruled that the case being previously closed did not mean it could not be reopened, allowing the DOJ to continue investigating potential antitrust 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.
The focus of the legal battle against the real estate trade organization is 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 criticized the ruling in a statement to Politico, saying it is weighing how to proceed.
“NAR believes that the government should be held to the terms of its contracts,” NAR spokesman Mantill Williams told the outlet. “We are reviewing today’s decision and evaluating next steps.”
The Hill has reached out the the NAR.
