REX Moves to Dismiss NAR’s Counterclaim in Real Estate Antitrust Suit

Last Friday, Real Estate Exchange Inc. (REX) asked the Seattle, Wash. federal court overseeing an ongoing false advertising and antitrust suit to dismiss a counterclaim brought by the National Association of Realtors (NAR). The counterclaim asserts that REX violated the Lanham Act by making false claims about NAR, namely accusing it and its members of engaging in illegal or unfair conduct to the trade association’s detriment.

The legal battle between REX, a real estate innovator seeking to lower real estate commissions, NAR, and co-defendant Zillow Inc. involves allegations that the latter two conspired to exclude REX’s residential real estate listings from Zillow’s primary results webpage that consumers use to search for new homes. The collusion amounts to a group boycott that violates antitrust law, REX has argued.

Previously, the court weighed Zillow’s and NAR’s motions to dismiss. The court allowed all the plaintiff’s claims against Zillow to proceed and its federal and Washington state antitrust claims against NAR to proceed. More recently, it considered and rejected REX’s refreshed state and Lanham claims for false advertising or deceptive acts against NAR.

Now, REX has asked the court to axe NAR’s counterclaim. The defendant has no standing to bring the claim as it does not and cannot assert requisite injury, the motion said. 

The filing explains that NAR brings the claim not on behalf of members—real estate brokers who compete with REX—but on part of itself. “As a trade association, NAR’s bare allegations of reputational injury to itself are too conclusory, indirect, and remote to confer Article III and statutory standing,” REX argued.

The motion also said that NAR lacks statutory standing to bring its Lanham Act claim because it does not adequately plead proximate causation. The counterclaim “does not explain how REX’s statements about REX’s own business in turn harm NAR,” the plaintiff asserted.

REX’s third and final argument contended that NAR fails to state a claim for false advertising because REX’s statements are not commercial speech and are not provable or disprovable proclamations of fact. “REX’s legal and policy positions on NAR’s conduct are expressions of opinion protected by the First Amendment,” the motion specified.

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.