Court sets new trial date for June 5, 2023, as the legal battle over the National Association of Realtors’ no-commingling rule continues.

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Discount brokerage REX Real Estate is seeking a court order to force real estate giant Zillow to turn over data on For Sale By Owner (FSBO) listings on its website, as the battle of wills between the companies continues toward a June 2023 trial date.

In a motion to compel filed Thursday, REX argues that Zillow’s FSBO listing data is “highly relevant” to REX’s antitrust claims, which allege that a National Association of Realtors rule, known as the no-commingling rule, prompted Zillow to separate non-MLS listings from MLS listings on its website. The non-MLS listings, which include REX’s listings as well as FSBO listings, appear under an “Other” tab on Zillow’s site, separate from an “Agent Listings” tab for MLS listings.

When reports indicated that REX was closing shop in May, REX blamed NAR and Zillow for the death of REX’s business model.

“The display change had the effect of suppressing competition and depriving consumers of lower priced alternatives for buying and selling homes,” the attorneys for REX wrote in the filing.

“In REX’s case, its listings on the ‘Other’ tab had significantly reduced views and REX lost sales and revenues. Ultimately, REX’s losses were so great that it was driven out of business.”

According to the filing, data on FSBO listings, which add up to 6.2 percent of all listings nationwide, will show the impact on REX’s listings of being moved to the “Other listings” tab in that it could serve as “powerful corroboration of REX’s position that the two-tab display proximately caused REX economic harm.”

The data would also show the harm of the display change on competition more generally, according to the filing.

“If, following Zillow’s display change, there has been a decline in the number of consumer views of FSBO homes, or a decline in the number of homes offered for sale by owner on Zillow, such a decline would represent a significant impact on competition from NAR’s and Zillow’s collusive activity,” the filing said.

Although REX’s attorneys noted that REX and Zillow disagree on whether FSBO homes are in the same market for brokerage services as those sold by an agent, they said that even if they’re not in the same market, the data would show that the two-tab display had harmed consumer choice and therefore competition.

“[I]t is well understood that when prices are elevated, consumers may turn to products that would otherwise be outside the relevant market in a competitive environment, and eliminating such products would give a monopolist even more power over price as consumers have even fewer substitutes,” the filing said.

Zillow declined to comment for this story. In an exhibit to the motion to compel, REX included a September 20 letter from Zillow counsel Jesse Beringer to REX saying that the FSBO listings were not “relevant to this case in any manner.”

“But even if they were, the burden of producing such data, which comprises nearly a million listings records and even more engagement records — on top of the already millions of records that Zillow is otherwise producing for MLS and REX’s own listings within REX’s MSAs — would be disproportionate and outweigh any such relevance,” Beringer wrote.

He added that the listing and engagement data for REX’s own listings and MLS listings in the markets where REX did business will allow REX to assess consumer engagement on REX’s listings and MLS listings before and after the display change.

Separately, Judge Thomas S. Zilly of the U.S. District Court in Seattle set a new trial date for 9:00 a.m. Pacific on June 5, 2023. The previous date was in April 2023.

Zilly recently decided to grant, in part, a motion to compel from Zillow, ordering REX to provide a list of REX employees who had both left the company and kept a REX-issued laptop.

Two motions to compel filed by REX against NAR in the case are still pending. The motions demand that NAR produce documents related to two major antitrust commission lawsuits the trade group is fighting, known as Moehrl and Sitzer/Burnett, and that NAR add senior executives — including NAR CEO Bob Goldberg, NAR General Counsel Katie Johnson and NAR Chief Economist Lawrence Yun — to its list of data custodians required to turn over evidence during the case’s discovery phase.

Email Andrea V. Brambila.

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MLS | NAR | realtors | Zillow
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