The U.S. Department of Justice’s appeal against a lower court’s ruling on its investigation into the National Association of Realtors’ commission and pocket listing policies is heating up.

On Friday, attorneys for the DOJ’s Antitrust Division filed a brief claiming that the lower district court has misinterpreted a letter the DOJ sent to NAR in November 2020, which the agency said said gave  NAR “almost three years of protection in the face of serious concerns of anticompetitive conduct.” 

It’s time for NAR’s rules to be assessed on their own merits, including antitrust violations that cost American homebuyers billions of dollars each year, DOJ said.

The brief was filed in the U.S. Court of Appeals for the District of Columbia Circuit.

Central to the appeal are two documents dating from November 2020. One is a proposed settlement agreement DOJ’s antitrust divisions agreed to after investigating NAR’s Clear Cooperation Policy and Participation Rule. The second is a three-sentence letter the DOJ sent to NAR telling the trade group that it had closed the investigation, absolving the NAR from the obligation  to comply with two previously-issued civil investigative demands (CIDs) requesting information on those rules.

The DOJ, under new leadership in the Biden administration, withdrew the settlement in July 2021 and a few days later issued a new CID to NAR that was similar, as it is looking into the same NAR policies

NAR filed a petition in September 2021 to set aside or modify the DOJ’s probes into the trade group. In late January 2023, Judge Timothy J Kelly of the U.S. District Court for the District of Columbia ruled in favor of NAR, stating that the earlier settlement terms were still valid.

The DOJ appealed the ruling in March and filed its first brief in early June. NAR filed a reply brief in late July.

NAR accepted that the DOJ had withdrawn from the settlement agreement and also released NAR from any obligations entailed in the settlement agreement, freeing NAR to resume its prior conduct.

The DOJ argued that the November 2020 letter does not say, as NAR contends, that the Division can only investigate is commission and pocket listing policies if NAR changes them. Instead, the DOJ states that the letter simply memorializes that the DOJ had closed the investigation, but it did not grant  NAR immunity from future investigation. 

The DOJ filing also clarified that a closed investigation can be reopened at its discretion. DOJ attorneys emphasized that the agency did not simply reissue the previous CIDs, but offered a separate one triggering independent legal obligations and procedures under the law.

Additionally, the DOJ stated that in order it to waive its sovereign right to investigate and prosecute potentially unlawful conduct, the law requires the DOJ to explicitly say it’s waiving that right, which the DOJ said it did not do in the November 2020 letter.

Based on prior communications with the NAR, the DOJ claimed the trade group understood the difference between a commitment not to investigate and a letter confirming it has closed an investigation.

The filing states that NAR asking for both statements “underscores that NAR did not believe that a letter memorializing the closing of an investigation would bar a future one and that the Division had no reason to ascribe such a belief to NAR.”

NAR did not return a request for comment by the time of publication.