The Justice Department will be allowed to reopen an antitrust investigation into the National Association of Realtors, a federal appeals court ruled Friday after the trade group insisted that the probe could not go forward because of the terms of an earlier settlement.
Judge Florence Pan, writing for the majority of a D.C. Circuit Court of Appeals three-judge panel, said a closing letter in the earlier case, written by the government in the previous administration, did not mean the investigation could never be reopened, reported Politico.
"We will not interpret a contract to cede a sovereign right of the United States unless the government waives that right unmistakably," Pan said in the 21-page opinion. "The closing letter contains no 'unmistakable term' ceding DOJ's power to reopen its investigation: To the contrary, it includes a 'no inference clause' that explicitly disclaims any intent to include unstated terms."
The investigation focused on how real estate agents have been compensated, which critics say amounts to illegal price fixing and inflates housing costs.
Last month, the NAR agreed to settle numerous lawsuits by paying $418 in damages while eliminating a rule concerning the commission system.
NAR spokesperson Mantill Williams on Friday said the trade group is evaluating its next steps, and that it believes "the government should be held to the terms of its contracts."
The association agreed to drop its "cooperative compensation" policy this summer. The policy mandates that sellers' agents must give buyer brokers an offer of compensation to show the property on the Realtors' Multiple Listing System.
Critics say the system locks in high commissions, with buyer and sellers splitting commissions of 5% to 6%, inflating the cost of housing.
The NAR reached its settlement with the Trump-era DOJ in November 2020, but the Biden administration pulled out of the deal less than a year later, in a move rejected by a lower court.
The DOJ appealed that ruling in the D.C. court, leading to Friday's decision.
"We note that NAR should not have been misled by the words used in the closing letter because investigations are routinely 'closed' and then later 'reopened,'" Pan wrote.
Judge Justin Walker, a Trump appointee, voted against the agreement, saying that the original settlement had required realtors to either modify or repeal some policies.
"DOJ's reading invests one side of the exchange with no real meaning at all," he said in his dissent. "It says that the Realtors gave up something (a lot, actually) in exchange for nothing more than a promise by DOJ to close an investigation it could immediately reopen — in other words, for a promise 'worth nothing but the paper on which it was written.'"
Walker added that the ruling means "the government can lure a party into the false comfort of a settlement agreement, take what it can get, and then reopen the investigation seconds later."
Sandy Fitzgerald ✉
Sandy Fitzgerald has more than three decades in journalism and serves as a general assignment writer for Newsmax covering news, media, and politics.
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