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On Monday, a protracted authorized battle involving the Nationwide Affiliation of Realtors and the Justice Division lastly got here to an in depth.
Or did it?
The case revolves across the DOJ’s investigation right into a pair of NAR guidelines the take care of listings and agent compensation. The DOJ needed to reopen an investigation into the principles, whereas NAR argued the feds had agreed not to take action. NAR took the struggle to the Supreme Court docket, which on Monday declined to take the case. Inman lined the scenario intimately, however at a look the Supreme Court docket’s resolution to move has an air of finality to it.
Nonetheless, NAR struck a defiant tone, arguing in an announcement Monday that it’s going to nonetheless take “every possible step to fight for the interests of our members and the consumers they serve.”
In that mild, Inman reached out to a number of attorneys who concentrate on actual property, antitrust points or each to seek out out what occurs subsequent and what sorts of battles lie forward. The takeaway from these conversations is that almost all attorneys weren’t stunned by the result on the Supreme Court docket. But in addition, that final result doesn’t imply the story is over. There’s doubtless nonetheless loads of authorized wrangling to return, and there’s at the least one large wildcard within the type of a brand new presidential administration.
In different phrases, the struggle between NAR and the DOJ will proceed — although its final result is much from sure.
What occurs subsequent
The authorized struggle between NAR and the DOJ stems from a proposed settlement the 2 entities reached in November 2020. In July 2021, the DOJ withdrew from the settlement. The DOJ then resumed its investigation into NAR’s guidelines. NAR responded by attempting to drive the DOJ to uphold the unique settlement. And the particular difficulty NAR took to the Supreme Court docket concerned a request — a subpoena, or civil investigative demand (CID) — for info from the commerce group.
So now, as a result of the Supreme Court docket handed on the case, the quick factor that occurs is NAR has to adjust to that request.
Marty Inexperienced
“Take into account this was a discovery dispute case the place the DOJ had issued requests for info and NAR mentioned, ‘wait a minute, you settled with us and agreed to close your investigation so those are not proper requests for inquiry,’” attorney Marty Green, a principal at Polunsky Beitel Green, said. “So basically where you are is back with the court below. So the DOJ can now continue to do what they’re going to do.”
Inexperienced added that NAR’s efforts to struggle the CID are “exhausted” at this level.
Nevertheless, authorized wrangling will not be over.
Dylan Carson — an lawyer and companion at legislation agency Manatt, Phelps & Phillips — instructed Inman that NAR might sooner or later push again on particular requests. For instance, if the DOJ asks for deposition from a selected particular person, or for particular paperwork, NAR might theoretically argue on the district courtroom degree that the scope or nature of such requests is inappropriate for some purpose.
Dylan Carson
Carson went on to say that “the CID statute is pretty well established” so NAR may need a troublesome time combating particular DOJ requests for info, however he mentioned that what generally outcomes is compromise.
All of which is to say there may be extra wrangling forward, but it surely’s more likely to happen considerably within the weeds.
“The law is pretty clear on a lot of this stuff, what’s relevant and what’s appropriate,” Stephen Libowsky, additionally a companion at Manatt, Phelps & Phillips, instructed Inman. ” It’s possible you’ll argue about, ‘do I need this person or that person? Do I need a two-day deposition or a one-day. Or three hours?’ However I’d count on this could take a extra genteel strategy within the sense that affordable heads would are available and say, everyone knows what we have to do, let’s get it finished.”
The Trump wildcard
The entire above mentioned, there’s a wildcard hanging over the case: the upcoming presidential inauguration of Donald Trump. But it surely’s unclear what which means for the scenario.
Earlier in his profession, Carson labored within the DOJ’s antitrust division. He instructed Inman that when a brand new White Home administration takes workplace the company’s nonpolitical workers attorneys keep in place, whereas new political appointees take cost. On this case, which means the DOJ might proceed its investigation, however prime leaders within the company might theoretically and finally take a unique stance — maybe a much less aggressive one — in comparison with what occurred through the administration of President Biden.
It’s additionally value noting that NAR and the DOJ reached their settlement throughout Trump’s first time period in workplace, whereas the DOJ withdrew from the deal after Biden took workplace. So might Trump’s return revive the settlement? Possibly.
“During a transition there’s usually an explanation of what current investigations are going on, and when the new folks get into place, they may decide to change the enforcement priorities,” Carson mentioned. “So they could revisit and go back to the deal that NAR had with the prior administration”
However Carson and Libowsky each famous that Trump has nominated Gail Slater to guide the DOJ’s antitrust division. Slater beforehand labored on the FTC and each attorneys who spoke to Inman about her characterised Slater as a severe lawyer who might not need to merely abandon the case.
Stephen D. Libowsky
“I suspect that Gail Slater, who’s nominated to head the antitrust division, will continue a number of the current enforcement priorities,” Libowsky mentioned. “So I think real estate will still be a focus.”
Libowsky additionally pointed to the breakup of telecom large Bell Programs in 1983 as an analogy. He recalled that the corporate first drew antitrust scrutiny through the presidency of Jimmy Carter. When Ronald Reagan then took workplace, many assumed the case would finish or shrink. However the Reagan administration did precisely the other.
“They doubled or tripled down on it and took it far more aggressively because they looked at it anew and said, ‘not only is this a great case, this is the right thing to do,’” Libowsky mentioned.
All of which is a good distance of claiming that the Trump administration is a consider what comes subsequent. It’s simply unimaginable to say what sort of an element.
No large surprises
Although the one certainty proper now seems to be that the struggle between NAR and the DOJ will proceed in some kind, attorneys who spoke with Inman weren’t essentially stunned by this week’s Supreme Court docket final result.
“This was exactly what I was expecting,” Inexperienced mentioned. “Because the issue was not the type of issue that the Supreme Court would ordinarily consider. The fact is that the Supreme Court hears so few cases that a discovery dispute and the contract issue related to that just didn’t seem to warrant the Supreme Court’s involvement.”
Ed Zorn
Different attorneys agreed. Nevertheless, Ed Zorn — a dealer, lawyer, and common counsel of the California Regional MLS — identified that NAR had prevailed in a decrease courtroom and had “some very valid arguments.”
“It’s not like this was a slam dunk either way,” he instructed Inman.
Nevertheless, even Zorn was not shocked by the result on the Supreme Court docket.
“I think the Supreme Court should have taken it,” he mentioned. “But it was not unexpected.”
Zorn, who has emerged as one in all actual property’s distinguished authorized voices throughout latest antitrust litigation, criticized among the DOJ’s actions within the case, together with the multi-year period of the investigation and an absence of specificity about any violations.
“I think it’s incumbent upon the government to very clearly articulate what the problems are,” Zorn mentioned. “For them to expect a resolution without clearly articulating what the issues are is unfair and un-American, frankly.”
Zorn additionally argued that the case might theoretically be wrapped up by March, if the attorneys — notably from the DOJ — might come collectively and strike a deal. However even Zorn couldn’t say if such a situation would possibly truly occur in the actual world.
“Can you actually end a case with the DOJ? Is that even possible?” he puzzled. “I don’t know.”
