The National Association of Realtors (NAR) received a new legal headache as the U.S. Circuit Court of Appeals in Washington, D.C., ruled the U.S. Department of Justice (DOJ) can reopen its investigation into the trade group’s Participation Rule and Clear Cooperation Policy.
The DOJ and NAR reached a settlement agreement in November 2020, but the 2-1 ruling by the court determined the agreement did not prohibit the DOJ from reopening the probe into the Participation Rule and Clear Cooperation Policy, which requires sellers’ agents to provide a blanket offer of compensation to buyer brokers in order to show a home featured on a multiple listing service. Changes to the commission structure were part of NAR’s $418 million settlement announced last month to resolve the charges brought in the Sitzer/Burnett trial.
Judge Florence Pan, a Biden appointee, in a 21-page opinion, wrote, “We will not interpret a contract to cede a sovereign right of the United States unless the government waives that right unmistakably. 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.”
In his dissenting opinion, Judge Justin Walker warned, “After today, behind the facade of its promise to close an investigation, 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.”
