DOJ Urges Court docket To Overturn Judgment In REX V. Zillow
“The choose’s resolution created a loophole that would permit associations to sidestep antitrust scrutiny by cloaking restrictive guidelines as non-compulsory,” the DOJ’s submitting states. The transient could give REX a brand new leg up in its case.
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In a transfer that will have far-reaching implications, the Division of Justice (DOJ) has weighed in on the authorized case between The Actual Property Alternate (REX) and Zillow in a brand new transient filed on Thursday that takes intention on the Nationwide Affiliation of Realtors’ (NAR) non-compulsory “no-commingling” rule.
The DOJ’s tackle the matter challenges a earlier ruling within the case from earlier this yr, which denied REX the opportunity of a retrial.
NAR’s “no-commingling” rule requires itemizing platforms that undertake it to separate MLS listings from non-MLS listings. In REX v. Zillow, low cost brokerage REX, which didn’t function inside an MLS whereas energetic, argued that Zillow’s adoption of the “no-commingling” rule restricted REX’s visibility on the platform.
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On the core of the DOJ’s new transient is the “no-commingling” rule’s “non-compulsory nature,” which the division states doesn’t stop it from probably being anticompetitive. The DOJ additional argues that the sooner courtroom resolution denying REX a retrial didn’t totally take into accounts that associations like NAR could have circumvented antitrust oversight by enacting such non-compulsory guidelines.
“The choose’s resolution created a loophole that would permit associations to sidestep antitrust scrutiny by cloaking restrictive guidelines as non-compulsory,” the DOJ’s submitting states. The submitting additionally notes that though NAR states the “no-commingling” rule is non-compulsory, these entities that undertake the rule should accomplish that in full because the rule “can’t be modified,” in keeping with the NAR Handbook.
In its transient, the DOJ additional argued that Supreme Court docket precedent has proven non-compulsory guidelines could contain “concerted motion” that may make these guidelines “obligatory in observe.” Such non-compulsory guidelines may “invite others to take part in a standard plan,” which the DOJ said, is essentially the place REX’s courtroom argument holds traction — in that the brokerage argued NAR, MLSs and finally Zillow acquiesced to and complied with the “no-commingling” rule.
“This Court docket ought to vacate the judgment beneath and remand the case for the district courtroom to totally contemplate whether or not there’s ample proof of concerted motion underneath this [common plan] idea,” the DOJ’s transient reads.
REX sued Zillow after the itemizing portal modified its mannequin in 2021 by turning into a licensed brokerage in an effort to acquire direct entry to MLSs’ Web Information Alternate feeds.
At the moment, Zillow additionally turned a member of NAR and its brokers turned members of native MLSs. Because the majority of MLSs that Zillow and its brokers joined had adopted the “no-commingling” rule, Zillow was additionally required to abide by the rule within the areas the place these MLSs have been situated. In response, Zillow separated its search portal into two tabs, one for “Agent listings” and the opposite for “Different listings.”
REX’s listings have been relegated to the “Different listings” tab as a non-MLS member and the brokerage alleged that web page views of its listings on Zillow dropped by as a lot as 80 p.c after the change to Zillow’s web site went into impact.
Zillow was additionally hesitant to undertake the “no-commingling” rule, the DOJ’s transient notes, however was compelled to take action in an effort to acquire entry to the MLS information, which reveals the load of the market impression that MLS guidelines maintain.
“Whereas Zillow disagreed with the rule, it complied to take care of entry to MLS information,” the DOJ stated.
REX has not been operational since Could 2022 however has continued in its authorized battle. After the agency’s request for a retrial was denied in January, REX filed a motion the next month to attraction the ruling.
The ball is now again within the Ninth Circuit’s courtroom to find out whether or not or to not remand the case again to the District Court docket to proceed proceedings. This newest assertion from the DOJ might be simply what REX must tip the scales in its favor and proceed to struggle for what it sees as truthful market entry on the subject of promoting listings.
View the DOJ’s transient in full here.
