Though the National Association of Realtors is not out of the legal woods yet, the trade group does have reason to celebrate. A federal court judge on Wednesday dismissed all antitrust allegations made by REX Real Estate against NAR and Zillow.
The remaining claims in the case are all against Zillow, meaning that NAR is no longer a defendant in the case and will not have to participate if it heads to trial next month as scheduled.
In his order dismissing the claims, Judge Thomas Zilly of the U.S. District Court for the Western District of Washington wrote that the “Court concludes that REX has failed to present evidence of the conspiracy alleged in its Amended Complaint, namely, a purported agreement between NAR, Zillow, and non-party MLSs to segregate, conceal, and demote non-MLS listings on Zillow’s websites and mobile platforms.”
The antitrust claims against NAR and Zillow were dismissed with prejudice.
In the order, Zilly noted that NAR’s No-Commingling Rule was optional and that about 29% of Realtor-affiliated MLSs had not adopted the rule, without any repercussions from NAR. On its own, the rule “does not constitute direct or circumstantial evidence of an anticompetitive agreement between NAR and Zillow,” Zilly wrote.
“The undisputed evidence in this action shows that neither NAR nor its affiliated MLSs were involved in Zillow’s decision to implement the challenged two-tab display that allegedly drove REX out of business,” he added.
Zilly also pointed out the unlike other brokerage, Zillow continued to display REX’s listings.
“The evidence demonstrates that instead of precluding REX’s listings entirely, like websites such as Redfin did … Zillow expended significant time and resources to ensure that REX’s and other non-MLS listings would remain on its platforms, albeit under a separate tab,” the order reads.
Originally filed by REX in March 2021, the lawsuit alleges that changes made to Zillow’s website “unfairly hides certain listings, shrinking their exposure and diminishing competition among real estate brokers.”
Two months prior, in January 2021, Zillow began moving homes out of its initial search results for sellers who chose not to use agents adhering to the NAR and local multiple listing service (MLS) practices.
In January 2022, NAR filed a countersuit claiming that REX uses false advertising and misleading claims to deceive consumers in violation of the Lanham Act, but the countersuit was dismissed in late April 2022.
In mid-May 2022, REX ceased its brokerage operations.
A little over a year later, in mid-June 2023, the three parties involved in the suit, all filed motions for summary judgment on at least some issues, if not the entire lawsuit.
Earlier this month, Zilly ruled on other claims in the lawsuit, allowing three of REX’s claims against Zillow to head to trial: a false advertising claim under the Lanham Act, a claim for unfair or deceptive trade practices under Washington’s Consumer Protection Act (CPA) and a claim alleging defamation.
Although Zillow’s legal battle against REX is not over, the company was pleased with Wednesday’s ruling.
“Today’s ruling is a significant victory for Zillow in this case. The court agreed REX’s antitrust claim was without merit and lacked any evidence to back it up,” Will Lemke, Zillow’s manager of corporate communications, wrote in an email. “This ruling affirms Zillow’s business decisions were squarely focused on improving the data on our website for consumers. With REX’s central argument tossed from this case, we believe the public now sees this case for what it is: REX seized upon another company’s website design change to hide its own business failings.”
The lawsuit is scheduled to head to trial on September 18. NAR and attorney for REX did not return a request for comment by the time of publication.
