Realtors Say REX ‘Engaged in a Campaign of Lies’ in Antitrust, Advertising Suit

The National Association of Realtors (NAR) hit back at REX – Real Estate Exchange Inc.’s bid to eliminate its counterclaim from the parties’ feud on Monday. Initially, REX filed suit against online home buying and selling platform Zillow Inc. and NAR over collusive conduct that it claims amounted to a group boycott and violated Washington and federal antitrust laws.

As previously reported, the challenged conduct includes NAR rules that allegedly restrict trade in the industry and Zillow’s reformatting of its website that purportedly shunted REX listings to a little-seen tab. The suit largely survived dismissal in a series of decisions issued by Judge Thomas S. Zilly.

In its most recent opinion, the court dismissed REX’s refreshed state and Lanham Act claims for false advertising or deceptive acts against NAR. Since then, REX moved to dismiss NAR’s counterclaim for false advertising concerning several statements purporting to “draw a direct comparison between REX’s own fees and those purportedly charged by other agents as a result of NAR’s rules.”

In this week’s rebuttal, NAR summarizes the conduct underlying its counterclaim. “REX lied about its own services and lied about what NAR’s rules require, and then it peddled those lies to get more business and damage NAR’s reputation,” the filing says. Substantively, the trade association argues that it has stated a viable Lanham Act claim.

In support, NAR argues that REX’s online advertisements are actionable false or misleading statements of fact. Contrary to REX’s contention that they are opinions, NAR claims that the challenged statements are capable of being proven false. NAR uses exemplary statements to illustrate the point, like the following: “Either REX does have ‘PhDs from the best schools in the country predicting who we think within a certain radius or square mile or demographic is the best buyer for your home,’ or it does not.”

Next, NAR contends that it has standing to challenge REX’s statements contrary to REX’s assertion that it has not adequately alleged injury. NAR says it has sufficiently pleaded reputational injury, per REX’s representations that imply negative facts like “NAR’s rules discourage agents affiliated with NAR from using innovative new technologies to sell real estate and offer lower commissions.”

In the event of dismissal, NAR asks that the court grant it leave to amend. 

REX is represented by Foster Garvey PC, McCarty Law PLLC, and Lehotsky Keller LLP. NAR is represented by Quinn Emanuel Urquhart & Sullivan LLP.