D.C. Circuit Greenlights National Association of Realtors Investigation

In April 2024, the D.C. Circuit ruled that the DOJ’s Antitrust Division could reopen their National Association of Realtors investigation and the allegedly anti-competitive practices of the trade organization with about 1.4 million members. Patterson Belknap reports that the ruling reverses a district court, which nullified an administrative subpoena issued to the National Association of Realtors (NAR) on grounds that it contravened a binding settlement agreement between the parties.

This case is different from recent actions from the Antitrust Division and home sellers claiming that NAR’s policies on commissions to agents are anti-competitive. This case dates to an antitrust suit brought in 2005, challenging NAR’s operation of multiple-listing services (MLS). 

The suit claimed that NAR’s policies allowed traditional brokers to block Internet-based competitors’ customers from having full online access to all listings, thus inhibiting competition and discouraging lower commission rates for consumers. The parties reached a ten-year settlement in 2008 requiring NAR to change several policies.

In 2018, after that settlement expired, the Antitrust Division again investigated NAR’s policies relating to MLSs and issued two subpoenas. In 2020, the parties again entered settlement negotiations, and the NAR asked the Antitrust Division to refrain from investigating the Participation Rule, a topic addressed by one of the subpoenas, for ten years. The Antitrust Division refused.

Ultimately, the parties agreed to a Proposed Consent Judgment, which did not address the Participation Rule. It contained a clause stating that nothing in the document restrained the United States from investigating and bringing actions relating to antitrust violations. After negotiations, the Antitrust Division withdrew from the Proposed Consent Judgment and issued a Demand seeking information about the Participation Rule and other matters. 

A district court ruled that the Demand should be set aside as a violation of the agreement. A two-judge majority of a D.C. Circuit panel reversed, ruling that the language of the letter closing the agreement did not bar further investigation or issuance of an investigation Demand.

Patterson Belknap notes that the decision does not reflect any particular view about whether the policies under investigation violate antitrust laws. That will have to be answered in future litigation.