As it previously indicated it would, the National Association of Realtors (NAR) filed a writ of certiorari with the Supreme Court on Thursday. The trade group is asking the nation’s highest court to consider an appeals court’s decision to allow the Department of Justice to reopen its investigation into NAR.
In July, the appeals court denied NAR’s request for a rehearing and in late August, the association announced that it would appeal the decision to the Supreme Court.
The appeals court’s decision overturned the ruling of District Court Judge Timothy Kelly, who ruled in January 2023 that the terms of an earlier settlement reached by the DOJ and NAR ending the department’s investigation into the trade group were still valid. Kelly also ruled that allowing the investigation to continue would take away the benefits NAR had negotiated in the original settlement.
The DOJ appealed the ruling in March 2023 and filed its first brief a few months later.
The two parties reached an initial settlement in 2020, ending the DOJ’s investigation into NAR’s listing and agent compensation policies. The settlement proposed at the time included requirements for NAR to boost transparency about broker commissions and to stop misrepresenting that buyer broker services are free. In exchange for NAR’s compliance, the DOJ said it would close the investigation.
But the DOJ, under new leadership in the Biden administration, withdrew the settlement in July 2021. It stated that the terms of the agreement prevent regulators from continuing to investigate certain association rules that could harm buyers and sellers.
NAR filed a petition in September 2021 to set aside or modify the DOJ’s probes into the trade group.
In its writ of certiorari, NAR claims that the Supreme Court should review the appeals court’s decision because it is “both exceptionally wrong and exceptionally important.”
NAR argues that by allowing the government to retract from the promise it made to close its investigation, the appeals court is setting a poor precedent and that changing a binding contract “based solely on its preference to do so” is something “a private party could never successfully invoke,” the filing states. Prior to the appeals court ruling, NAR notes that there have been no instances where the government was allowed to reopen an investigation it had agreed to close.
“Restoring that principle (of contractual obligations) is critical because the government enters into contracts in a vast range of contexts … in which contracting partners rely on the government to keep its word,” the filing stated.
NAR also alleged that the DOJ’s decision to reopen the investigation was due to a change of leadership after President Joe Biden took office.
“Although a new administration is free to change the government’s policies, it is not free to repudiate the government’s contracts,” the filing stated.
