Why NAR says its Supreme Court appeal has massive implications

The National Association of Realtors says its U.S. Supreme Court petition over a federal probe carries profound weight for businesses and private citizens. 

The massive trade group followed through last week on its promise to take its fight with the Department of Justice to the nation's highest court. The petition for writ of certiorari focuses on feds walking back their promise in 2021 to end an investigation into NAR's practices.

The Supreme Court must still decide to hear the case, and may dismiss the petition with no reason given. It also has no deadline to make its decision. 

A federal court sided with NAR's challenge to the DOJ's reneging, but an appeals court changed course this spring in allowing feds to proceed. The case has no relation to NAR's monumental Sitzer/Burnett settlement this year in which it changed some rules the DOJ had scrutinized. 

"A rule that the government receives special treatment permitting it to easily escape its contractual commitments would create profound instability, along with basic unfairness," wrote attorneys for NAR. 

Counsel argues the majority ruling in the U.S. Circuit Court for the District of Columbia's 2-1 decision in April breaks case precedent and allows feds to move in a way they would never allow a private citizen to do so. 

The trade group did not respond to a request for comment this week, but previously said it wanted to ensure the DOJ sticks to its 2020 agreement. The appeals court ruling, it said, would jeopardize the government's agreement to countless civil and criminal settlements, and with state and local governments. 

The DOJ began its probe in 2019, focusing on NAR's Participation Rule and Clear Cooperation Policy. The Participation Rule, which requires a broker who participates in a Multiple Listing Service to make an offer of compensation to a buyer broker, was axed this year in the Sitzer/Burnett resolution.

The Clear Cooperation Policy, which requires immediate listings, meanwhile was not affected. In the DOJ's official 2020 settlement, it agreed to four other NAR policy changes unrelated to the two regulations in question. 

Federal investigators in January 2021, at the onset of the Biden Administration, decided to resume their "closed" investigation,  NAR contends. The DOJ argued it never promised to not reopen the investigation despite the agreed-to settlement. 

"Without intervention from this Court, the position adopted by the panel majority will expose businesses and private citizens to perpetual uncertainty regarding the government's commitments or representations when settling investigations," NAR argued. 

Final approval for the $418 million Sitzer/Burnett settlement is scheduled for November 26. The association implemented rule changes around agent compensation in August, and fallout predicted by industry veterans may yet be materializing.