[00:00:01] Speaker 03:
Case number 23-5065, National Association of Realtors versus United States of America et al.

[00:00:08] Speaker 03:
at balance.

[00:00:09] Speaker 03:
Mr. Liu for the imbalance, Mr. Michel for the appellee.

[00:00:12] Speaker 03:
Mr. Liu, good morning.

[00:00:13] Speaker 02:
Good morning.

[00:00:14] Speaker 02:
May it please the court, Fred Liu for the United States.

[00:00:17] Speaker 02:
I reserve two minutes for rebuttal.

[00:00:20] Speaker 02:
There's no dispute that in November 2020, the Antitrust Division closed its investigation into NAR's participation role

[00:00:28] Speaker 02:
and clear cooperation policy.

[00:00:30] Speaker 02:
The question is whether, in addition to agreeing to close its investigation, the division made a commitment not to reopen it.

[00:00:37] Speaker 02:
The answer is no.

[00:00:40] Speaker 02:
No such commitment appears in the text of the closing letter.

[00:00:43] Speaker 02:
The division repeatedly rejected such a commitment throughout negotiations.

[00:00:48] Speaker 02:
And the record shows that when the division does intend to make such a commitment, it does so in unmistakable language.

[00:00:55] Speaker 01:
Can I ask you a question about that, please?

[00:00:57] Speaker 01:
If we disagree with you about that, can you still win?

[00:01:03] Speaker 01:
Or do you concede that that's the dispute, that's the case, what you just said?

[00:01:08] Speaker 02:
No, we still win because the ordinary meaning of close, particularly when reading the context of the negotiation history of this case, is that closing did not entail any additional commitment not to reopen it.

[00:01:24] Speaker 01:
Well, so I guess

[00:01:26] Speaker 01:
I'm saying if we disagree with you about that.

[00:01:29] Speaker 02:
If you disagree with our reading of the.

[00:01:31] Speaker 01:
Let's say we think that close was a promise to close it and keep it closed.

[00:01:40] Speaker 01:
If we disagree with you about that.

[00:01:42] Speaker 01:
Do you have another theory where you can win or do you concede that's the case?

[00:01:46] Speaker 02:
That is our theory in this court, which is that when the antitrust division made the commitment to close, that did not apply any additional commitment to refrain from reopening.

[00:01:58] Speaker 02:
And that's clear throughout the record.

[00:02:00] Speaker 02:
The division rejected, repeatedly rejected,

[00:02:04] Speaker 02:
any commitment not to reopen.

[00:02:06] Speaker 02:
This is at J.A.

[00:02:06] Speaker 02:
248, at 252, at 259.

[00:02:10] Speaker 02:
Each time the question of whether there would be such a forelooking commitment arose, it was rejected.

[00:02:17] Speaker 02:
And not just rejected like we said no.

[00:02:20] Speaker 02:
We rejected it categorically.

[00:02:22] Speaker 01:
It seems like you kept rejecting it and they kept refusing to settle with you.

[00:02:30] Speaker 01:
And then

[00:02:32] Speaker 01:
You relented, and you said, well, if you'll agree not just to the consent decree, which I understand was never ultimately executed, but also to the post, the temporary order and stipulation, it seems like they refused to agree to the order and stipulation until you gave them the promise to close.

[00:02:56] Speaker 01:
And then once you finally gave them the promise to close,

[00:03:00] Speaker 01:
they gave you consideration for that promise.

[00:03:02] Speaker 01:
And the consideration was their agreement to abide by the temporary order and stipulation, which required them to make some policy changes.

[00:03:12] Speaker 02:
That is all correct.

[00:03:14] Speaker 02:
I think it just raises the question, what was the promise to close?

[00:03:17] Speaker 02:
None of what Your Honor said answers that question.

[00:03:20] Speaker 02:
When we relented and said we would agree to close, we did not relent on giving any sort of commitment to refrain from reopening.

[00:03:30] Speaker 02:
The clearest place to see this in the record is JA-259.

[00:03:34] Speaker 02:
This is the August 12th letter from Michael Murray back to NAR.

[00:03:38] Speaker 02:
And the last sentence of that letter says, as I previously explained, we can't make any commitment not to reopen.

[00:03:46] Speaker 02:
And then the very next thing in the JA, JA-260, is a letter from NAR back to the Antitrust Division dated August 18th.

[00:03:55] Speaker 02:
And it says, we accept the terms of that proposal.

[00:03:58] Speaker 01:
So what do you, what do you, how do you respond to the analogy that NAR gives a parent tells the child close the door.

[00:04:07] Speaker 01:
The child does not obey that order by closing the door and then immediately reopening the door.

[00:04:14] Speaker 02:
I think as NAR acknowledges on page 22 of its brief, context is critical.

[00:04:21] Speaker 02:
And the relevant context here is supplied by the back and forth communications between the two parties on this very issue.

[00:04:29] Speaker 02:
We rejected it three times.

[00:04:31] Speaker 02:
After the last time, we rejected it.

[00:04:33] Speaker 02:
It's not like the parties moved or there was further negotiation.

[00:04:36] Speaker 02:
The very next communication from NAR is we accept.

[00:04:40] Speaker 02:
We accept what JA 259 tells us.

[00:04:44] Speaker 02:
As Michael Murray previously explained, no commitment to never investigate again.

[00:04:49] Speaker 02:
And in fact, if you look at the record, the very first time this idea that the closing letter could be read to contain some sort of commitment, some sort of limitation on the future exercise of executive branch discussion doesn't come up.

[00:05:05] Speaker 01:
What was the closing letter worth?

[00:05:06] Speaker 01:
It seemed to be very important to NAR that they get what they got in the closing letter.

[00:05:12] Speaker 01:
What do you think it was worth?

[00:05:15] Speaker 02:
I think there are three important benefits that NAR got from the closing letter, even as we interpret it.

[00:05:21] Speaker 02:
Number one, as a practical matter,

[00:05:24] Speaker 02:
the closing of the investigation created inertia against reopening and that's because there's an internal process within division to decide when to reopen something.

[00:05:34] Speaker 02:
Now it's true as an ex-ante matter you can't tell how much that practical benefit is.

[00:05:39] Speaker 02:
You don't know if it's going to be two months until the division decides to reopen or it's going to be two years.

[00:05:46] Speaker 02:
But nonetheless, any delay in a new investigation coming up is a benefit.

[00:05:51] Speaker 01:
That's not nothing.

[00:05:53] Speaker 01:
Maybe it's not nothing.

[00:05:53] Speaker 01:
What are the second?

[00:05:54] Speaker 02:
The second benefit is the PR benefit.

[00:05:57] Speaker 02:
We saw this the day after we gave NAR the letter on November 19th.

[00:06:01] Speaker 02:
On November 20th, they took the letter and filed it in pending private litigation in the central district of California involving the clear cooperation policy.

[00:06:10] Speaker 02:
And to this day, NAR continues to invoke this letter, I think to imply that the division doesn't have too much of a concern with the two policies at issue.

[00:06:20] Speaker 02:
And the third thing is they got the immediate benefit of not having to respond to the CIDs that were then pending.

[00:06:27] Speaker 02:
But I think.

[00:06:29] Speaker 02:
I was just going to say, I think it would be wrong to think of the closing letter as the only source of benefit that NAR got from this deal.

[00:06:38] Speaker 02:
You're right that they said, we aren't going to sign on to the consent decree unless we get this closing letter.

[00:06:45] Speaker 02:
But parties all the time in deals say things like, we all agree to this if you throw in one more thing.

[00:06:51] Speaker 02:
Do you have any concern?

[00:06:53] Speaker 01:
at what DOJ is doing here will make it harder for future DOJs to convince parties in NAR's shoes that when DOJ says it will close an investigation, it will stay closed for more than a half minute.

[00:07:12] Speaker 02:
No, because we made clear throughout the process that we weren't making that commitment.

[00:07:17] Speaker 02:
So we're not concerned at all that in the future we won't be just as clear.

[00:07:23] Speaker 02:
We thought we were just as clear here.

[00:07:25] Speaker 02:
The only reason this contract isn't more specific is because NAR had no incentive to ask for more specificity.

[00:07:32] Speaker 02:
If they had, they already knew the answer.

[00:07:35] Speaker 02:
We would have said.

[00:07:36] Speaker 01:
So much your time, and I'm grateful, my colleagues, for letting me have one more question.

[00:07:39] Speaker 01:
I think just one more.

[00:07:42] Speaker 01:
Why did DOJ do what it did in 2021?

[00:07:47] Speaker 01:
What explains it?

[00:07:49] Speaker 02:
Well, I think we had two sets of policies in front of DOJ at that time.

[00:07:55] Speaker 02:
We had the four policies that ultimately became the subject of the proposed consent decree.

[00:08:01] Speaker 02:
And those were policies where the two parties were able to reach some sort of agreement.

[00:08:06] Speaker 02:
Then we had the two policies that were the subject of the closing letter, the clear cooperation policy and the participation rule,

[00:08:11] Speaker 02:
Those were policies that the parties remained far apart.

[00:08:15] Speaker 02:
And so I think the thinking of the division in November 2020 was we got two months left.

[00:08:23] Speaker 02:
Let's finish what we can.

[00:08:24] Speaker 02:
And so they finished their work on the four policies.

[00:08:29] Speaker 02:
And they said, our administration is ending in two months anyway.

[00:08:33] Speaker 02:
We're not going to be able to finish any investigation into these two policies.

[00:08:37] Speaker 02:
It's no skin off our back to agree to close them.

[00:08:41] Speaker 02:
It's a small price to pay for getting NAR's consent

[00:08:46] Speaker 02:
to the proposed judgment on these four things.

[00:08:49] Speaker 02:
But at no point did Makan Delrahim and Michael Murray think that they were binding the future exercise of executive discretion.

[00:08:58] Speaker 02:
It's not as if they repeatedly told NAR

[00:09:02] Speaker 02:
from July through August 2020 that they couldn't make that commitment and then at the last minute did a 180 and did the very thing that they described repeatedly as a non-starter and contrary to department policies.

[00:09:15] Speaker 02:
That's simply not a plausible reading of this record.

[00:09:19] Speaker 02:
And to your last question Judge Walker about whether the department is concerned about the effect of this decision

[00:09:25] Speaker 02:
on future negotiations, I think it's completely the opposite.

[00:09:30] Speaker 02:
If something like the district court's decision is allowed to stand, it will destabilize our ability to negotiate these sorts of things.

[00:09:38] Speaker 02:
What the district court said was, I'm reading this document,

[00:09:43] Speaker 02:
I think NAR should have gotten more out of this deal than they actually got.

[00:09:49] Speaker 02:
I don't think this closing letter is really worth the piece of paper it's written on.

[00:09:53] Speaker 02:
So I'm going to read into the closing letter some sort of commitment.

[00:09:57] Speaker 02:
Does DOJ ever do what NAR says they did here?

[00:10:00] Speaker 02:
Absolutely.

[00:10:01] Speaker 02:
And I think it's not exactly the same, but the closest we will do to something like this is agree not to prosecute.

[00:10:09] Speaker 02:
And I think the difference is telling.

[00:10:13] Speaker 02:
Look at exhibit K and L to NAR's reply in the district court.

[00:10:17] Speaker 02:
This is a model leniency letter from the antitrust division and a model plea agreement from the antitrust division.

[00:10:24] Speaker 02:
And in paragraph three of the letter and in paragraph 15 of the model plea agreement, you will see the unmistakable sort of language we use when we do want to constrain future exercises of discretion.

[00:10:36] Speaker 02:
We say, quote, the United States agrees that it will not bring further charges.

[00:10:41] Speaker 02:
That's the sort of unmistakable language that's missing here.

[00:10:45] Speaker 02:
But I should also emphasize that.

[00:10:47] Speaker 02:
What NAR thinks we gave up here is even more extraordinary than those plea agreements, because those plea agreements agree that we won't bring further charges for specified past conduct.

[00:10:59] Speaker 02:
The policies at issue here are ongoing potential violations of the antitrust laws.

[00:11:05] Speaker 02:
And I think as the OLC opinion that's cited by both parties and as Tasha's exhibit A to NAR's Ply Below shows,

[00:11:13] Speaker 02:
This is pretty unusual.

[00:11:14] Speaker 02:
And you would think that when the executive does this, it would make its intention manifest.

[00:11:19] Speaker 02:
I see that I'm over my time.

[00:11:21] Speaker 03:
So I want to go back to Judge Walker's first question, which was, are you relying on anything else?

[00:11:27] Speaker 03:
And it seems to me that there is a plausible argument that this closing letter, if it's part of an overall agreement that included the consent decree, was withdrawn when the consent decree was withdrawn.

[00:11:40] Speaker 03:
Are you not making that argument?

[00:11:42] Speaker 02:
We're not pressing that argument as a standalone argument here.

[00:11:45] Speaker 02:
But I do think the history of the withdrawal and what it shows about why we withdrew supports our interpretation of the closing letter.

[00:11:57] Speaker 03:
So you're just relying on your interpretation of the closing letter and not that it has been withdrawn.

[00:12:02] Speaker 02:
Correct.

[00:12:03] Speaker 02:
Correct.

[00:12:04] Speaker 03:
And on the unmistakability principle, you didn't raise that in the district court.

[00:12:08] Speaker 03:
Is that something that you're allowed to raise

[00:12:10] Speaker 03:
an appeal if you did not raise it?

[00:12:11] Speaker 02:
Yeah, I think so for two reasons.

[00:12:13] Speaker 02:
The first reason is this court, like the Supreme Court, has distinguished between issues and arguments.

[00:12:19] Speaker 02:
And it has said that so long as an issue was preserved below, a party can raise additional arguments relating to that issue.

[00:12:27] Speaker 02:
We view the relevant issue here as what the meaning of close was between the parties.

[00:12:32] Speaker 02:
And this is just an additional argument that supports it.

[00:12:35] Speaker 02:
The second reason is that the

[00:12:37] Speaker 02:
sort of unmistakability principle appears in Exhibit A to NAR's own reply that it submitted in the district court.

[00:12:45] Speaker 02:
This is the OLC opinion that on page 146 says that courts often construe executive branch settlements narrowly out of respect for executive branch prerogatives and so as not to bind future administration.

[00:13:01] Speaker 02:
So NAR itself put this doctrine in front of the district court and I think it's

[00:13:06] Speaker 02:
it's pretty fair that we get to rely on it, too.

[00:13:11] Speaker 02:
Thank you.

[00:13:24] Speaker 00:
Thank you, Your Honor, and may it please the court, Chris Michelle for Appellee National Association of Realtors.

[00:13:29] Speaker 00:
This case can be resolved on straightforward, narrow, common sense grounds.

[00:13:34] Speaker 00:
The government does not dispute that it entered into a binding contract with NAR.

[00:13:39] Speaker 00:
The government does not dispute that that contract required it to close its investigation into two enumerated NAR rules in return for valuable consideration.

[00:13:48] Speaker 00:
And the government does not dispute that it resumed that same investigation into those same rules, not because of any change in the rules or the law or the facts, but simply because DOJ changed its mind.

[00:14:02] Speaker 00:
As my friend Mr. Liu concedes this morning, DOJ's entire case depends on its contention that its binding promise to close the investigation left it with precisely the same unfettered discretion after it made that promise as it had before it made that promise.

[00:14:18] Speaker 00:
But under that reading, DOJ's promise would mean essentially nothing at all.

[00:14:22] Speaker 00:
In NAR's surrender, a valuable consideration would make little sense.

[00:14:27] Speaker 01:
Opposing counsel listed three things that you gained from the promise, even if you don't gain what you think you gained from the promise.

[00:14:37] Speaker 01:
What's your response to that argument?

[00:14:39] Speaker 00:
Well, I think we didn't gain much of any value from any of the things Mr. Liu mentioned.

[00:14:45] Speaker 00:
I think the first thing he mentioned was some sort of inertia within the government.

[00:14:49] Speaker 00:
Of course, the letter didn't say, we will apply increased inertia against reopening the investigation.

[00:14:56] Speaker 00:
The letter said, we will close the investigation.

[00:14:59] Speaker 00:
The PR benefits, again, that was not something that I think is memorialized in any of the negotiating history.

[00:15:08] Speaker 00:
The third benefit, I can't quite recall what he said.

[00:15:11] Speaker 00:
Going back to the first.

[00:15:13] Speaker 03:
I just want to confirm, it's true though that your client has used that letter, submitted it in other cases.

[00:15:19] Speaker 00:
We have publicized the letter.

[00:15:21] Speaker 00:
Although I guess to take on, I think, the thrust of Judge Walker's question, even if the letter had some benefit, more than zero benefit, the question in the case is not whether the letter had any benefit.

[00:15:34] Speaker 00:
The question is what the parties bargained for.

[00:15:37] Speaker 00:
And I think there are multiple sources of contract meaning that indicate that the letter was worth more than as the district courts had to be worth more than as the district court said the paper that it was printed on.

[00:15:48] Speaker 00:
But I'd start with the ordinary meaning of the term close, particularly in the context of closing the investigation.

[00:15:55] Speaker 00:
The ordinary meaning of close is, of course, end or conclude.

[00:15:58] Speaker 00:
And I agree with my friend, Mr. Liu, that meaning depends on context.

[00:16:04] Speaker 00:
But in the context of an investigation, closing has to mean something more than the government having the same discretion that it had

[00:16:12] Speaker 00:
before it made the promise to close the investigation, then it did after it made the promise to close the investigation.

[00:16:19] Speaker 00:
Otherwise, the promise doesn't mean anything.

[00:16:21] Speaker 03:
But you're conceding now that your client did receive a benefit from being able to use this letter and publicize it and use it in other cases.

[00:16:29] Speaker 03:
Because I thought you started your argument by saying there would be no benefit to this if it wasn't also a commitment not to reprosecute.

[00:16:36] Speaker 03:
But now you appear to be conceding that there were other benefits.

[00:16:39] Speaker 00:
I'm sorry, Judge Pan, I concede that we did display the letter and publicize the letter.

[00:16:46] Speaker 00:
I don't think we derived any significant benefit from that, but I also don't think the case turns on that.

[00:16:53] Speaker 03:
I understand, I just wanted to confirm what your position is, because I thought you started saying it had no value.

[00:17:01] Speaker 01:
To Judge Pan's point, it does seem like one of your strongest arguments would be if the government's right,

[00:17:09] Speaker 01:
then the paper, then the promise was not worth the paper it was printed on.

[00:17:14] Speaker 01:
And maybe it was helpful in the way the government said as its second reason.

[00:17:21] Speaker 01:
But I think the first reason also seems like it might have been helpful to you, the inertia point.

[00:17:26] Speaker 01:
And you might be a little bit more, we might be a little bit more transparent in how we think of the inertia point by saying, you gained the benefit of

[00:17:40] Speaker 01:
being pretty confident that if the personnel and the Antitrust Division didn't change after the election, you'd be good to go.

[00:17:48] Speaker 01:
But you made that bet and you lost the bet.

[00:17:52] Speaker 00:
Well, a couple of responses, Judge Walker.

[00:17:53] Speaker 00:
I think, of course, we're trying to determine what the words of the contract mean here.

[00:17:58] Speaker 00:
And the government's position, and I don't take Mr. Lew to disagree with this, is that the government could have, consistent with its understanding of the letter, reopened the investigation immediately, the night of or the morning after it sent the closing letter.

[00:18:12] Speaker 00:
It's true that some time went by, but I don't, as Mr. Lew said this morning, I don't think he's making any argument that's based on how much time went by.

[00:18:18] Speaker 01:
That would have been pretty inexplicable.

[00:18:20] Speaker 01:
And so you might have thought, that's very unlikely.

[00:18:23] Speaker 01:
Actually, what was the timing of the closing of this agreement?

[00:18:27] Speaker 00:
It was in November of 2020.

[00:18:28] Speaker 01:
It was November 19th and November 20th?

[00:18:32] Speaker 00:
I think that's correct.

[00:18:33] Speaker 00:
Yeah, November 19th is the closing letter.

[00:18:35] Speaker 01:
One thing that the government pointed out is on JA 259, DOJ said that the Antitrust Division just cannot

[00:18:47] Speaker 01:
admit and never investigate challenging the two rules in the future.

[00:18:51] Speaker 01:
And I think the government is suggesting when it said that it just meant we don't have the power.

[00:18:56] Speaker 01:
Well, we don't maybe we don't even have the constitutional authority to bind a future DOJ.

[00:19:01] Speaker 01:
What's your response to that?

[00:19:02] Speaker 00:
Sure.

[00:19:03] Speaker 00:
Two responses.

[00:19:04] Speaker 00:
First, I do think the text matters and the text says,

[00:19:08] Speaker 00:
The division cannot commit to never investigating or challenging NAR's rules and policies in the future.

[00:19:17] Speaker 00:
I mean, that is far more than we're asking for from this court or that the district court interpreted the letter to provide to us.

[00:19:25] Speaker 00:
We're not asking for a commitment to never investigate, and we're not asking for a commitment to never challenge NAR's rules and policies.

[00:19:32] Speaker 00:
We're talking about

[00:19:33] Speaker 00:
two specific enumerated rules and policies.

[00:19:36] Speaker 00:
And we've taken the position throughout the case that if those policies change in some way, the closing letter does not preclude the government from investigating those.

[00:19:44] Speaker 00:
So I think what Mr. Lew said was his best evidence ultimately doesn't show that the government rejected the interpretation of the closing letter that the district court adopted.

[00:19:54] Speaker 00:
Now to your broader question about the government's authority, I think it's frankly an alarming proposition that the government is saying,

[00:20:02] Speaker 00:
It either doesn't have authority or gets some tremendous thumb on the scale any time it sacrifices its enforcement discretion in an agreement with a private party.

[00:20:11] Speaker 03:
The government- It just has to do so clearly and unmistakably.

[00:20:14] Speaker 00:
Our first submission is that it did so clearly and unmistakably here.

[00:20:19] Speaker 03:
Okay, let's talk about that because I'm looking at the language of this letter and I don't see how you can read it to make any commitments about the future.

[00:20:28] Speaker 03:
It says the Antitrust Division has closed its investigation

[00:20:31] Speaker 03:
talking about a particular investigation.

[00:20:33] Speaker 03:
And then it says NIR will have no obligation to respond to CID numbers.

[00:20:39] Speaker 03:
It gives you numbers issued on these particular dates.

[00:20:42] Speaker 03:
It's talking about a particular investigation and particular CIDs.

[00:20:47] Speaker 03:
It's not saying anything about any other investigation, any future investigation.

[00:20:51] Speaker 03:
It's not making any commitment about the future.

[00:20:53] Speaker 03:
And then it says no inference should be drawn from the division's decision to close its investigation into these rules, et cetera.

[00:21:02] Speaker 03:
I don't see how you can read into this any kind of commitment about not prosecuting in the future.

[00:21:07] Speaker 00:
The plain language.

[00:21:08] Speaker 00:
I agree the plain language is critical here Judge Pan and I think the future tense plain language in the second sentence of the letter it said after it says DOJ has closed the investigation and then says accordingly.

[00:21:20] Speaker 00:
In other words, as a result of DOJ closing the investigation, NAR will have no obligation to respond to the two enumerated CIDs.

[00:21:29] Speaker 03:
The enumerated CIDs, it doesn't say we can't issue another one.

[00:21:32] Speaker 00:
It does say they can't issue another one, although I don't even take the government to be taking the remarkable position that it could simply renumber the CIDs and it asks for exactly the same information.

[00:21:44] Speaker 03:
Where do you get, I will not in the future investigate you on these

[00:21:48] Speaker 03:
to policies.

[00:21:50] Speaker 00:
Sure, two things together.

[00:21:51] Speaker 00:
The ordinary meaning, well, a number of things, really, but the ordinary meaning of the word close, which we think implies something more than authority to immediately reopen, coupled with the future language.

[00:22:03] Speaker 03:
Wait, don't gloss over that.

[00:22:04] Speaker 03:
The ordinary meaning of close means we close.

[00:22:07] Speaker 03:
It's closed.

[00:22:08] Speaker 03:
This one is closed.

[00:22:10] Speaker 03:
What does that say about reopening?

[00:22:12] Speaker 00:
Sure, I think in the context of an invest, as I said earlier, in the context of an investigation,

[00:22:18] Speaker 00:
the commitment to close has to mean something more than the government retaining precisely the same.

[00:22:23] Speaker 00:
Investigations are reopened all the time.

[00:22:26] Speaker 00:
Investigations are reopened on a case.

[00:22:28] Speaker 00:
And I think the government at page 53 of its brief says, in the ordinary course, investigations are not reopened.

[00:22:34] Speaker 03:
It's not unusual for investigations to be reopened.

[00:22:37] Speaker 00:
It's certainly possible for investigations to be reopened, but is this important?

[00:22:40] Speaker 03:
It is not unusual.

[00:22:41] Speaker 03:
Do you agree with that?

[00:22:42] Speaker 03:
I mean, they think there are cases set.

[00:22:44] Speaker 03:
Isn't there a Seventh Circuit case showing Kraft or something?

[00:22:46] Speaker 03:
I mean, there are lots of

[00:22:48] Speaker 03:
It's examples of investigations being closed.

[00:22:51] Speaker 00:
I agree with you, Judge Penn, that that's an important case to look at, the Seventh Circuit case.

[00:22:55] Speaker 00:
And there's a critical difference between that case and perhaps the frequent reopenings that you're referring to.

[00:23:01] Speaker 00:
And in those cases, there's no contract.

[00:23:03] Speaker 00:
There's no exchange of consideration from the recipient of the promise to close.

[00:23:07] Speaker 03:
But we're just pretty close here.

[00:23:08] Speaker 03:
I'm I'm just we're talking about the word closed.

[00:23:12] Speaker 03:
Right.

[00:23:12] Speaker 03:
And the plain and ordinary meaning of closed does not imply and will never reopen.

[00:23:17] Speaker 03:
I saying is that things get reopened, not it's not unusual.

[00:23:21] Speaker 03:
And so we're just talking about the meaning of this word.

[00:23:25] Speaker 03:
And given that this is not an unusual thing.

[00:23:27] Speaker 03:
How can you reclose to mean, and we'll never open this again?

[00:23:30] Speaker 00:
I think both in the context of the letter itself and in the context of the party's bargaining.

[00:23:36] Speaker 03:
For example, the district court found as a matter of- And get to the context of this is clear and ambiguous.

[00:23:42] Speaker 00:
I think it's clear and unambiguous against us.

[00:23:46] Speaker 00:
I'm not sure you would need to get to the to the way if it's cleared unambiguous for org.

[00:23:50] Speaker 00:
Well, yeah, it's trying to be just for us.

[00:23:52] Speaker 00:
You don't need to look at it.

[00:23:53] Speaker 00:
No, but I do think it's an it's an accepted principle of contract interpretation to look at the party's bargaining history, but even aside from the bargaining history only.

[00:24:03] Speaker 00:
And I agree it's clear.

[00:24:04] Speaker 00:
We think it's clear and unambiguous in our favor.

[00:24:07] Speaker 00:
I mean, I would take just to give another example of what I think is common sense that can be applied to understanding this.

[00:24:13] Speaker 03:
If I close the door, does that mean I'm never going to open it again?

[00:24:16] Speaker 00:
No, I agree there are contexts where it would make sense to reopen again.

[00:24:20] Speaker 00:
But as Judge Walker alluded to earlier, I think I can come up with hypotheticals where it would be quite surprising that you would immediately reopen it.

[00:24:27] Speaker 00:
For example, if.

[00:24:29] Speaker 03:
But we're not talking about immediately.

[00:24:31] Speaker 03:
You're saying that this says never again.

[00:24:33] Speaker 00:
Well, I want to be very clear, Judge Pan.

[00:24:35] Speaker 00:
I don't think Mr. Lew disagreed with this.

[00:24:37] Speaker 00:
The government's position is that it could reopen immediately.

[00:24:39] Speaker 03:
I know that, but your position is they can never, ever in the future, ever reopen an investigation about clear cooperation policy or participation rule?

[00:24:48] Speaker 00:
I'm sorry if I've left that impression.

[00:24:50] Speaker 00:
Our position is that they can reopen the investigation if there are any material changes in these policies.

[00:24:55] Speaker 03:
Where is that in this letter?

[00:24:58] Speaker 00:
I think that's an interpretation of what it means to refer to an investigation.

[00:25:04] Speaker 01:
In the stipulated temporary order?

[00:25:09] Speaker 00:
That I think referred to what was in place between the time of the closing letter and the consent decree's entry.

[00:25:15] Speaker 00:
But yes, that was from there too.

[00:25:19] Speaker 00:
Just as a matter of common sense, there's a commitment in the consent decree

[00:25:24] Speaker 00:
that NAR will adopt certain rules that correct the policies that DOJ was objecting to.

[00:25:30] Speaker 00:
If NAR had adopted that rule and then repealed it the next day or the next week, I don't think DOJ would say the plain meaning of adopt was satisfied by what you did in this case.

[00:25:41] Speaker 00:
And I don't think DOJ would say, oh, you're improperly reading words in there by saying, we didn't say adopt and not repeal.

[00:25:48] Speaker 00:
I think there's an ordinary common sense meaning here, particularly in the context of a bargain for closing of a law enforcement investigation that implies not immediate reopening with total discretion, which is the import of the government's position in this case.

[00:26:04] Speaker 00:
And of course, the government itself,

[00:26:06] Speaker 00:
fully understand Mr. Luta disagree with this either, appeared to operate under the impression that it was constrained by its promises in this settlement.

[00:26:15] Speaker 00:
And that's why it didn't immediately reopen the investigation in 2021, as it could have if it believed the argument that it's advancing today.

[00:26:23] Speaker 00:
Instead, it went through a labored process of attempting to renegotiate the consent decree and ultimately withdrawing from the

[00:26:29] Speaker 00:
And I think you should look at the government's actions and conduct in real time as opposed to its post-hoc litigation rationale and determining what it itself understood the contract to mean.

[00:26:40] Speaker 00:
As this course has said, the party's conduct is often the best indicator of their understood meaning.

[00:26:45] Speaker 01:
Can you respond briefly to the argument about the unmistakability doctrine that the government makes?

[00:26:50] Speaker 01:
The forfeiture part.

[00:26:52] Speaker 01:
The government says, this canon is just like the Expresso Unius canon, and you can no more forfeit an unmistakability canon than you can the Expresso Unius canon.

[00:27:02] Speaker 01:
And respond to this, too, for better or worse, I think our court has some opinions saying even Chevron cannot be forfeited.

[00:27:10] Speaker 00:
I think the better understanding of it is that it is a doctrine under which courts can trump the ordinary words of a contract.

[00:27:17] Speaker 00:
It's not just a canon of construction.

[00:27:19] Speaker 00:
I think it's rather unfair for the government to chide Judge Kelly for flouting the unmistakability doctrine when it didn't even mention it.

[00:27:26] Speaker 00:
So I do think the better understanding is it can be forfeited.

[00:27:28] Speaker 00:
But in all events, I don't think it applies here.

[00:27:30] Speaker 00:
I would just look at this court's

[00:27:32] Speaker 00:
you know, parade of cases over the years interpreting contracts like this one, settlement agreements, plea bargains, without applying anything like the unmistakability doctrine.

[00:27:43] Speaker 01:
You know, if there's ever been a precedent that says the unmistakability doctrine can be forfeited.

[00:27:50] Speaker 00:
I don't know if there's a precedent on that, Your Honor.

[00:27:52] Speaker 00:
But I do think there's a, I would look at, for example, this court's decision in the Moreno-Membache case, which we cited, where the government, where this court interprets a plea agreement without any kind of unmistakability thumb on the scale.

[00:28:04] Speaker 00:
Judge Garland's opinion for the court, then Judge Garland's opinion for the court, Seeger versus Mukasey, where the government gave up hiring discretion, certainly a sovereign power, and the court,

[00:28:16] Speaker 00:
meticulously applied different canons of contract interpretation without any unmistakability.

[00:28:21] Speaker 00:
The Supreme Court's cases in ITT Continental Baking and United States versus Armour, two cases at the government sites that are about antitrust consent decrees.

[00:28:29] Speaker 00:
In other words, contracts in the antitrust space in which the government gave up enforcement discretion.

[00:28:34] Speaker 00:
There's no hint of the unmistakability doctrine there.

[00:28:37] Speaker 00:
So I think it would be candidly a radical expansion of the unmistakability doctrine to apply it to a simple exercise of enforcement discretion of the kind the government undertook in this case.

[00:28:50] Speaker 00:
All right.

[00:28:51] Speaker 00:
Thank you.

[00:28:51] Speaker 00:
Thank you, Ron.

[00:29:06] Speaker 02:
Thank you, Your Honors.

[00:29:06] Speaker 02:
Just a few quick points in rebuttal.

[00:29:08] Speaker 02:
First, about this discussion about JA-259 and the word never.

[00:29:13] Speaker 02:
My friend suggests that we merely rejected a very rigorous limit that said we would never investigate again.

[00:29:24] Speaker 02:
I don't think that squares with the record.

[00:29:27] Speaker 02:
The page on JA-259, Michael Murray is referring back to previous communications.

[00:29:32] Speaker 02:
If you look at the previous communication on 248,

[00:29:35] Speaker 02:
He is referring to a commitment not to challenge these rules in the future, and he calls it a non-starter.

[00:29:40] Speaker 02:
That is a categorical rejection, not just a rejection of one form of a limit.

[00:29:45] Speaker 02:
And then another thing that reinforces that is, again, what I said earlier.

[00:29:48] Speaker 02:
After Michael Murray on JA 259 says, we can't commit to never doing this again, it's not as if there were more negotiations toward some more modest limit that contains some material change language.

[00:30:01] Speaker 02:
No, after that, the very next communication is we accept those terms.

[00:30:06] Speaker 02:
So there's no way to squeeze out a material change limitation from this record.

[00:30:12] Speaker 02:
The second point I just want to make is about the suggestion that the course of performance after the closing letter suggests that the government had a different view of the closing letter than we do today.

[00:30:24] Speaker 02:
That's simply untrue.

[00:30:26] Speaker 02:
After the closing letter was sent and after the government received comments through the Tony Act process, we looked at those comments.

[00:30:34] Speaker 02:
We thought about the proposed consent decree.

[00:30:36] Speaker 02:
We decided we wanted to withdraw.

[00:30:38] Speaker 02:
The reason we wanted to withdraw wasn't because we thought there was something wrong with the closing letter, which we viewed as a side deal and not even part of the Tony Act process.

[00:30:47] Speaker 02:
Rather, it was because we were concerned the proposed judgment itself

[00:30:51] Speaker 02:
might have race judicata effects that would preclude.

[00:30:55] Speaker 01:
Can you point me to a precedent where the government has made a promise in exchange for consideration to close an investigation and the court has said that the government can reopen the investigation?

[00:31:11] Speaker 02:
Not in a case where we made a promise to do it, but there are cases where there are letters that say we're going to close an investigation and the court doesn't construe those letters to mean that those investigations wouldn't open again.

[00:31:26] Speaker 01:
Did those cases have consideration in exchange for a promise?

[00:31:34] Speaker 02:
No, I'm thinking of the Seventh Circuit case in Schellenbach, which construes a closing letter.

[00:31:40] Speaker 02:
You said today that there was consideration.

[00:31:43] Speaker 02:
And there was consideration here.

[00:31:45] Speaker 02:
So I don't think the fact that the Schellenbach case didn't involve consideration means anything.

[00:31:51] Speaker 02:
I would analytically think of this in two pieces.

[00:31:55] Speaker 02:
One, did the United States make a commitment to close?

[00:31:58] Speaker 02:
A commitment.

[00:31:58] Speaker 02:
And we acknowledge that we made a commitment to close.

[00:32:01] Speaker 02:
And if you look at JA 20 to 21, NAR acknowledges that we closed.

[00:32:06] Speaker 02:
They say on JA 20 to 21, consistent with the terms of the agreement, the antitrust division closed the investigation.

[00:32:13] Speaker 02:
Then the question is, does the meaning of close encompass something broader?

[00:32:18] Speaker 02:
And I do think cases like Schellenbach, even though they don't involve an exchange of communication, are relevant to that ordinary meaning interpretation.

[00:32:27] Speaker 02:
I see that my time is up.

[00:32:29] Speaker 02:
Thank you.

[00:32:30] Speaker 02:
Thank you.