REX Amends Complaint in Antitrust Suit Against Zillow and NAR

After emerging largely victorious from the court’s dismissal order last month, Real Estate Exchange Inc. (REX), a real estate brokerage that purports to save home sellers on realtor commissions, has added allegations to its state and federal false advertising claims against the National Association of Realtors (NAR). The Seattle, Washington antitrust case alleges that Zillow Inc., its affiliates, and NAR illegally segregated the plaintiff’s real estate listings on Zillow’s website, causing a decline in REX’s listings, sales, and brokerage service revenues.

In particular, the March-filed lawsuit accuses the defendants of discriminating against competitors and foreclosing transparent access to the “home inventory.” In support of these contentions, REX singled out NAR rules curtailing competition on home sale commissions and a change in Zillow’s online home sales website relegating its listings to a little-scene link.

As previously reported, the court held that REX stated a claim for relief against both Zillow and NAR for violations of the Sherman Act and Washington’s analogue statute. It granted NAR’s motion as to the false advertising claims however, finding the allegations conclusory. In particular, Judge Zilly reasoned that the plaintiff failed to explain how NAR was involved in the discriminatory labelling system on Zillow’s website.

Among other things, the amended complaint beefed up false advertising allegations against NAR. A new section now asserts that NAR reviewed Zillow’s website display of REX’s listings for compliance with association rules and approved its decision. “Zillow acted as NAR’s agent in moving REX listings to “Other Listings” to enforce NAR’s rules, including its co-mingling and segregation rules,” the complaint added.

The defendants have 10 days to file an answer or otherwise respond.

The plaintiff is represented by Foster Garvey PC, McCarty Law PLLC, and Lehotsky Keller LLP. Zillow is represented by Orrick, Herrington & Sutcliffe LLP and NAR by Quinn Emanuel Urquhart & Sullivan LLP.