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Court Issues Second Dismissal Opinion in REX’s Antitrust Suit Against NAR and Zillow

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On Monday, the Western District of Washington issued an opinion permitting some but not all of Real Estate Exchange Inc.’s (REX) claims to proceed against the National Association of Realtors (NAR). The antitrust lawsuit against NAR and co-defendants Zillow Inc. and its affiliates claims that the defendants unlawfully segregated the plaintiff’s online real estate listings and instituted other anticompetitive restrictions, triggering a decline in REX listings, sales, and brokerage service revenues.

REX is an online real estate brokerage that aims to reduce or eliminate realtor commissions paid by home sellers. The opinion addresses REX’s amended complaint and allegations against NAR, as previously, the court greenlighted all of the plaintiff’s claims against Zillow and its federal and Washington state antitrust claims against NAR.

In this week’s ruling, the court reviewed the plaintiff’s refreshed state and Lanham claims for false advertising or deceptive acts, focusing on the plaintiff’s newly alleged theory that Zillow acted as NAR’s agent when it reorganized its website’s real estate listings, shunting REX’s to a little-seen tab.

The court found this argument unpersuasive, ruling that the plaintiff failed to plead an agency relationship with particularity as required by the federal fraud pleading standard. “The amended complaint contains no factual allegations to support the existence of an agency relationship between Zillow and NAR, and Plaintiff has not pleaded the elements of agency.  Plaintiff fails to plead any facts alleging that NAR exercised control over the design of Zillow’s labeling system,” the opinion said. As such, the court once again dismissed the false advertising or deceptive acts claims, this time with prejudice. 

The opinion then considered whether NAR defamed REX through statements made by Zillow. The court disposed of the claim without turning to the substance thereof, reiterating its previous conclusion that the plaintiff failed to establish an agency relationship between the defendants. Per the order, REX may file an amended defamation claim on or before January 13.

REX 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.

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