‘Flat
wrong’
ruling?

According
to
REX,
the
three-member
panel’s

decision
to
affirm
the
lower
court’s
ruling
that
NAR’s
optional
no-commingling
rule
is
not
an
antitrust
violation
is
erroneous.
REX
claims
the
ruling
conflicts
with
precedents
set
by
both
the

U.S.
Supreme
Court
and
the
Ninth
Circuit. 

REX
believes
the
panel’s
opinion
is
based
on
“the
absence
of
evidence
of
concerted
action,
and
the
conclusion
that
Zillow
‘independently
re-designed
its
website.’”
In
the
filing,
REX
asserts
that
the
panel’s
view
that
the
rule
itself
is
not
direct
evidence
of
concerted
action
“is
flat
wrong
and
obviously
so.” 

“Optional
or
not,
the
no-commingling
rule
was
promulgated
by
NAR,
a
trade
association
composed
of
brokers
and
agents
who
compete
with
one
another
except
when
they
are
acting
in
concert
by
using
NAR
to
coordinate
their
activities
to
protect
their
commissions
and
otherwise
forestall
competition,”
the
filing
states. 

REX
goes
on
to
state
that
perhaps
the
panel
meant
that
the
rule
is
not
direct
evidence
of
concerted
action
between
NAR
and
Zillow.
Ultimately,
however,
this
is
not
what
REX
feels
the
panel
meant.

“What
the
panel
said
started
it
down
the
wrong
path
and
led
to
error.
Instead
of
recognizing
the
Rule
for
what
is
the
end
result
of
concerted
action
by
NAR’s
members
the
panel
treated
NAR
as
if
it
were
a
single
entity
apart
from
its
members,
which
could
not
conspire
with
itself,
requiring
REX
to
prove
an
agreement
between
NAR
and
Zillow
from
scratch,”
the
petition
states.

“That
is
an
error.
Because
the
Rule
itself
was
the
product
of
concerted
action
among
NAR
members,
there
is
also
concerted
action
when
anyone
later
joins
NAR
and
agrees
to
adopt
or
enforce
the
Rule,
as
Zillow
did.
As
the
DOJ
explained
in
its
amicus
brief
and
at
oral
argument,
the
Rule
is
a
standing
invitation
to
NAR
members
to
ratify,
adopt
or
enforce
the
Rule.”

Additionally,
REX
believes
the
panel
erred
when
it
treated

MLSs
owned
by
Realtor
associations
as
if
they
“had
nothing
to
do
with
NAR.” 

“The
record
shows,
however,
that
local
realtor
associations,
composed
of
NAR
members,
establish
NAR-affiliated
MLSs,
which
the
associations
own
or
operate,
either
alone
or
in
conjunction
with
other
associations,”
the
petition
states.
“Conduct
of
NAR
MLSs
is
governed
in
minute
detail
by
NAR’s
Handbook
on
Multiple
Listing
Policy.
Given
the
control
that
NAR
members
exercise
over
NAR
MLSs
through
their
national
organization,
NAR
MLSs
are
instrumentalities
of
NAR
members.”

In
addition
to
these
complaints,
REX
also
believes
that
the
panel
incorrectly
focused
on
Zillow’s
website
redesign
and
what
prompted
the
redesign
instead
of
the
rule.
By
redesigning
its
website
and
separating
listings,
Zillow
played
a
part
in
enforcing
the
rule. 

Four-year
court
battle

Time
will
tell
if
REX’s
petition
is
successful. 

Originally
filed

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
before
that,
Zillow
began
moving
homes
not
listed
on
the
MLS
out
of
initial
user
search
results
and
onto
a
second
tab.
This
adhered
to

an
optional
NAR
rule,
which
prevents
those
who
choose
to
adopt
it
from
commingling
MLS
listings
with
non-MLS
listings.

Despite
noting
that
it
did
not
support
this
rule,
Zillow
claims
it
was
forced
to
adopt
it
to
obtain
IDX
feeds
from
MLSs
that
had.
This
precipitated
the
two-tab
design
for
MLS
listings
and
“other
listings.”

In
May
2022,
REX

ceased
its
brokerage
operations.
And
a
little
over
a
year
later,
the
three
parties
involved
in
the
case
each
filed

motions
for
summary
judgment
on
either
the
entirety
of
the
lawsuit
or
portions
of
it.

Judge
Thomas
Zilly,
who
oversaw
the
case,

dismissed
REX’s
antitrust
claims
against
NAR
and
Zillow.
But
he
allowed
the
discount
brokerage’s

false
advertising
claim
under
the

Lanham
Act,
along
with
a
claim
for
unfair
or
deceptive
trade
practices
under
the
state
of
Washington’s
Consumer
Protection
Act,
to
stand.

At
a
trial
in
September
2023,
the
court
ruled
in
favor
of
Zillow
on
the
remaining
charges.
Roughly
six
weeks
later,
REX
filed
its
motion
for
a
new
trial.
In
the
request,
REX
argued
that
it
was
unfairly
prevented
from
presenting
testimony
about
agent
commissions
to
the
jury.

A
Seattle
jury
ultimately
found
that
REX
did
not
prove
Zillow
used
false
advertising
in
its
decision
to
put
non-MLS
listings
on
a
different
section
of
the
website.
It
also
found
that
Zillow
proved
its
defense
on
REX’s
second
claim
that
Zillow
acted
deceptively
and
unfairly.

REX
filed
its
appeal
in

February
2024
after
Zilly
denied
its
motion
for
a
new
trial.