When the Supreme Court on Monday denied the National Association of Realtors’ (NAR) petition to hear its appeal of a lower court’s ruling that allowed the Department of Justice (DOJ) to reopen its long-running investigation, the trade group officially ran out of court options.
But while it may seem like the Supreme Court’s decision marks the end of things for NAR, legal experts in the industry feel like this could be just the beginning.
“NAR has two real choices here,” said Chuck Cain, an attorney and the president of Alliance Solutions. “It could try to engage with the DOJ and come up with a new settlement that the DOJ won’t back out of, or it could decide to keep fighting.”
No matter which path NAR chooses, it will be adding even more time to a legal battle that dates back to 2018, when the DOJ opened an investigation into NAR’s now-defunct Participation Rule and its current Clear Cooperation Policy. The parties reached an initial settlement in 2020, which required NAR to boost transparency about broker commissions and to stop misrepresenting that buyer broker services are free. In exchange for NAR’s compliance, the DOJ said it would close the investigation.
But the DOJ, under new leadership during the Biden administration, withdrew the settlement in July 2021. It stated that the terms of the agreement prevent regulators from continuing to investigate certain association rules that could harm buyers and sellers.
NAR filed a petition in September 2021 to set aside or modify the DOJ’s probes into the trade group. In January 2023, U.S. District Court Judge Timothy Kelly ruled that the terms of the settlement were still valid and that allowing the investigation to continue would take away the benefits NAR had negotiated in the original settlement.
The DOJ appealed the ruling in March 2023, which led to the reversal of Kelly’s ruling in April 2024 by the appeals court. This decision permitted the DOJ to reopen its investigation into NAR.
Roughly six months later, in October 2024, NAR filed a writ of certiorari asking the Supreme Court to review the decision of the appeals court.
Given the meandering trajectory this litigation has taken, NAR is lucky to still have options. But neither choice offers a certain outcome as this lawsuit has shown that settling doesn’t always mark the end of legal concerns.
Throughout its legal filings, NAR has repeatedly said that allowing the DOJ to reopen its investigation — which it claims the DOJ agreed to close — sets a bad precedent.
“If left in place, the decision below will unsettle the interests of the diverse private parties who routinely contract with the government, from sophisticated firms vital to our nation’s economy to criminal defendants confronted with the government’s vast prosecutorial advantages,” NAR’s filing from late December 2024 reads
Marx Sterbcow, the managing attorney at Sterbcow Law Group, shares a similar view.
“It definitely is concerning, especially if you are representing a client and you settle, and you think you and the government are on the same page, only to find out that you actually aren’t — that’s nerve wracking,” Sterbcow said. “I think, as a result, we are going to see people litigate disputes with the government more frequently instead of just settling.”
Because NAR has previously tried to settle, only to end up entangled in another legal battle, industry experts are not convinced NAR will go this route again.
Instead, many believe NAR will continue to engage and fight with the DOJ. NAR even suggested as much in a statement it issued after the Supreme Court’s decision.
In an emailed statement, a NAR spokesperson wrote that the trade group “remains committed to taking every possible step to fight for the interests of our members and the consumers they serve.”
But what that next fight may entail remains to be seen. Through filings in various private lawsuits, the DOJ has made it clear that it has concerns over NAR’s Clear Cooperation Policy, its optional no-commingling rule and its buyer representation agreements, which were mandated by NAR’s commission lawsuit settlement. Additionally, the DOJ does not want offers of buyer broker compensation advertised anywhere. According to Cain, any or all of these items could be the source of the next legal battle between the parties.
“The ball is in the court of the DOJ,” Cain said. “They may decide to bring some action somewhere — and what the basis for that action is remains to be seen — but there are hints out there, and then NAR is going to have to go deal with each of those gun fights.”
“It is like Pandora’s box,” Sterbcow added. “The DOJ being able to reopen the investigation just opens up a whole new can of worms, and it could get out of control. I don’t think it will, but you never know.”
With the Supreme Court’s decision coming a week prior to the start of the second Trump administration, it remains to be seen if the DOJ and its new leadership will actually investigate any of these concerns.
“Whether or not the focus in regard to antitrust at the DOJ might shift from NAR to other groups remain to be seen,” Cain said. “So, I think it is more a question of focus as to what the DOJ opts to move forward with, and then we will see how vigorous they are, but there is no reason to think they will be necessarily less vigorous than they have been.”
President-elect Donald Trump has chosen Gail Slater to lead the DOJ’s antitrust division, a pick most observers believe will be easily confirmed. Prior to Slater’s nomination, many in the real estate industry were hoping that Trump’s victory would lead to a lessening of antitrust scrutiny on the industry. But Slater, a veteran technology and media policy adviser, is known as a bit of an antitrust hawk, suggesting that the same scrutiny of the real estate industry could continue.
“NAR has already upset the apple cart with the DOJ, and I don’t see the DOJ letting off the gas pedal at all when they now have even more leverage than they had before — why would they let it all go?” Sterbcow said. “And I don’t see the Trump administration or the Trump DOJ coming in to save the day.”
Given Slater’s previous work in the technology and media sectors, however, Cain believes the real estate industry may not be as big of a focus for the Trump-led DOJ.
“I think it will be a question of how much time and money they have to devote to this, especially if they are going to be fighting companies like Google and Apple — those are going to be very expensive litigations and government entities do have budgets.”
Although DOJ strategy and focus could change at any time, Cain believes the industry will have a sense of where the DOJ is heading with antitrust enforcement by this summer.
“They’ll have either brought something by then or it will appear that they are busy elsewhere,” Cain said.
Despite any sense of security that may bring, Cain said the threat of the DOJ taking action will continue to loom over the industry.
“The industry is going to have to live under this until something happens, whether that is an action brought by the DOJ or the DOJ saying that they are going to do anything, but that is not how the department works,” Cain said. “Usually, they just let people sit and stew.”
