DOJ defends realtor probe despite since-withdrawn settlement

A sale sign points to a home in Dallas
A sale sign points to a home in Dallas, Texas September 24, 2009. REUTERS/Jessica Rinaldi
  • DOJ lawyers deny saying U.S. would refrain from any future inquiry
  • Two civil subpoenas issued to National Association of Realtors concerning rules, practices
  • NAR's Quinn Emanuel lawyers call investigation 'unprecedented'

(Reuters) - The U.S. Justice Department is arguing in Washington, D.C., federal court that it should be allowed to press its antitrust investigation of National Association of Realtors (NAR) policies and practices despite an earlier, but since withdrawn, settlement.

DOJ antitrust enforcers said in a filing on Wednesday in U.S. District Court for the District of Columbia that the settlement, abandoned in July, was not finalized. They said nothing now stands in the way of a civil subpoena seeking information about agent commission and marketing practices from Chicago-based NAR.

"The division never made any commitment to refrain from further investigation of NAR. On the contrary, the division repeatedly stressed that it would not make such a commitment," DOJ senior counsel James Luh said in the court filing.

The Justice Department is investigating NAR rules and policies that enforcement officials said restrict how agents can market properties and how commissions are set.

The rules in question "may have anticompetitive effects" that cause buyers to pay more in fees and give sellers less choice in how properties are shown to prospective buyers, the government said.

The new filing came in response to a legal effort from the realtors association, represented by Quinn Emanuel Urquhart & Sullivan, to block a civil investigative demand.

Quinn Emanuel partner Ethan Glass, a lawyer for the realtors group, did not immediately return a message on Thursday seeking comment. A Justice Department spokesperson did not immediately comment.

Attorneys for NAR asserted in a petition on Sept. 13 in Washington, D.C., federal court that DOJ was out of bounds in moving to investigate industry practices after earlier settling claims. NAR's lawyers have asked the court to set aside the investigative demand or more narrowly tailor it to remove "overly broad, unduly burdensome or harassing" requests.

"These actions by the Antitrust Division are unprecedented," Quinn Emanuel partner Ethan Glass wrote in the petition. "NAR has not identified any other time that the Antitrust Division has sought to withdraw from a duly negotiated settlement even though the defendant had complied with all of its obligations."

NAR said in a statement on Thursday that "if DOJ's view prevails, it would undermine the strong public policy in favor of upholding settlement agreements and public confidence that the government will keep its word."

DOJ's court filing said the closing letter sent to NAR in November "did not preclude any future investigation by the United States."

The earlier agreement would have required NAR to amend rules to provide more information to prospective home buyers about commissions and to prohibit brokers and agents from representing their services are free.

The case is National Association of Realtors v. United States, U.S. District Court for the District of Columbia, No. 1:21-cv-02406-TJK.

For plaintiff: Ethan Glass of Quinn Emanuel Urquhart & Sullivan

For defendant: James Luh of the Justice Department

Read more:

U.S. Justice Department withdraws from settlement; launches probe of realtors

Realtor group beats back antitrust lawsuit over home-listing service

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