Dictionary book

NAR relies on dictionary in latest volley against DOJ

The National Association of Realtors’ latest volley in its case against the US Department of Justice includes images from the Merriam-Webster dictionary that define the words ‘closed’ and ‘open’ – a stark example of the distance between the two sides as they fight to find out if the DOJ can investigate two of the NAR’s rules.

On Friday, the 1.5 million-member trade group filed a response to the DOJ’s objection last month to a NAR motion to rescind or modify the federal agency’s request for a civil investigation seeking to new information on Buyer’s Broker Commission Rules and Pocket Listings.

The crux of NAR’s argument is that the DOJ agreed – as part of a settlement agreement from which the agency abruptly withdrew on July 1 – to close investigations into two rules: the cooperation policy clear of NAR, which requires listing brokers to submit a listing to their MLS within one business day of marketing a property to the public, and NAR’s Participation Rule, which requires listing brokers to offer commissions to buying brokers to participate in multiple listing services affiliated with the real estate agent.

NAR argues that the DOJ did not actually close the investigations and that the civil investigation request the agency sent to the trade group on July 6 continued those investigations, rendering that request “invalid.”

“In October 2020, the Antitrust Division unconditionally accepted NAR’s settlement offer, which required a commitment from the Antitrust Division to ‘close’ its participation rule and clear cooperation policy investigation,” wrote NAR’s attorneys in the filing.

“In this context, the word ‘close’ is a verb that means ‘to end’. This term should be interpreted according to its “ordinary meaning”, and the Antitrust Division’s position that it was free to “initiate” this same investigation at any time contradicts the plain meaning of the parties’ agreement.

“By its ordinary meaning, the verb ‘open’ means ‘to move (like a door) from a closed position’ or ‘to begin a course or activity.’ So what the Antitrust Division did is the exact opposite of what the word “close” contemplates in the parties’ agreement.

NAR’s response is 18 pages with 547 pages of exhibits, including photographs of the dictionary entries for “close” and “open” starting at page 510.

“Close” means “close”

The DOJ’s public statements when it backed out of the proposed settlement, saying the agency was concerned the deal would impede its ability to protect real estate brokerage competition and prevent it from pursuing other related antitrust claims. to NAR’s rules “show that it had agreed to close its investigation into the Attendance Rule and the Clear Cooperation Policy, and that it could not have any investigations opened regarding either rule”, says NAR in its file.

“The Antitrust Division’s actions also confirm that it understood that ‘shut down’ means ‘shut down,'” the lawyers for NAR wrote.

“Before trying to opt out of the settlement, the Antitrust Division asked NAR to amend the settlement agreement to allow it to investigate the rule of participation and the clear cooperation policy.

“The fact that the Antitrust Division requested a change to the settlement agreement is a concession that the settlement, unless changed, actually limits the ability of the Antitrust Division to investigate the participation rule and NAR’s clear cooperation policy.

“The Antitrust Division’s words and actions therefore rebut its assertion that the Settlement Agreement imposes no limitations on further investigation of the Participation Rule and Clear Cooperation Policy.”

In a letter sent the same day the settlement agreement was offered to the court, the DOJ informed the NAR that it had closed its investigations into the two policies. In that letter, the DOJ included a sentence that read, “No inference should be drawn, however, from the Division’s decision to terminate its investigation of those rules, policies, or practices not covered by the consent decree.”

According to NAR, this sentence does not mean that the DOJ reserved some right to a future policy investigation because the DOJ did not request and the parties did not negotiate this term.

“Instead, he unconditionally accepted NAR’s proposed settlement, which did not include such a limitation, and that means there was no such reservation in the settlement agreement,” says the folder.

“[T]This sentence has not changed and cannot change the plain meaning of the Settlement Agreement. It only warns third parties that they should not draw any inference from the Antitrust Division’s decision to terminate the investigation, which is not controversial,” the filing added.

Because NAR did not negotiate the language of the closing letter or even see it before it was sent, then “the second sentence of the letter cannot be considered part of the agreement if it takes the meaning proposed by the Antitrust Division,” NAR’s attorneys wrote.

“A party cannot introduce a new material clause into a contract after an agreement has been reached simply because it no longer likes a party to the agreement it has entered into.”

What the dossier does not address

NAR’s filing makes it clear that the trade group considers the settlement agreement to be binding on the government, and therefore its arguments to quash the latest investigation depend on which court enforces the agreement.

But in its own previous filing, the DOJ argued that the deal was not final and therefore the agency could walk away from it.

“In 2020, the United States and the NAR discussed, and the United States ultimately filed, a proposed settlement that would have resulted in the entry of a consent judgment by the Court,” the DOJ filing states. .

“But no consent judgment was ever made.”

The Antitrust Proceedings and Sanctions Act, known as the Tunney Act, required a period of public notice and comment before any final settlement with the NAR, and it was during this process that the Antitrust Division of the DOJ concluded that the reservation of rights provision in the draft final judgment “should be revised to avoid potential confusion as to whether the judgment would preclude further action by the Division on matters not covered by the judgment,” DOJ attorneys wrote.

When NAR did not accept the modification, the agency withdrew from the agreement as permitted by paragraph 2 of the proposed settlement, they added.

Screenshot of Proposed NAR-DOJ Settlement

The latest NAR filing does not address this particular DOJ argument.

The DOJ acknowledged that it had agreed to issue a closure letter confirming to NAR that it had closed an investigation into two of NAR’s policies. However, the agency’s filing indicates that it views its latest request as a new investigation and not a continuation of the previous one, as claimed by the NAR.

“The three-sentence closing letter did not contain any commitment to refrain from conducting future investigations into the NAR or its practices or issuing new CIDs in conjunction with such investigations,” the DOJ filing said.

“The NAR advances”

This week at its Realtors Conference & Expo, NAR is considering three MLS policy proposals inspired by the disputed settlement with the DOJ: a rule barring buying agents from marketing their services as “free”; a ban on filtering ads by commission or brokerage name; and a policy requiring MLSs to display buyer broker commissions on their listing sites and in the data feeds they provide to agents and brokers.

Mantill Williams

“The Department of Justice’s (DOJ’s) withdrawal from a fully binding and enforced agreement runs counter to public policy standards and consumer interests,” NAR spokesman Mantill Williams said in a statement. a press release sent by e-mail.

“NAR is making progress on the Agreement’s pro-consumer measures and remains committed to regularly reviewing and updating our policies for local brokerage markets to continue advancing efficient, fair and transparent practices for the benefit of consumers.

“Allowing the DOJ to backtrack on our binding agreement would not only undermine public confidence that the government will keep its word, but would also undermine the pro-consumer changes advanced in the agreement. NAR delivers on its commitments to consumers – we just expect the DOJ to do the same.

Read the latest NAR filing:

Email Andrea V. Brambila.

Like me on Facebook | follow me on twitter