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The Department of Justice (DOJ) is looking to further its involvement in REX Real Estate’s appeal of its antitrust suit against the National Association of Realtors (NAR) and Zillow.
On Wednesday, the DOJ filed a motion with the Ninth Circuit Court of Appeals for permission to participate as an amicus curiae in the oral arguments scheduled for Feb. 13. This comes roughly a year after the now-defunct discount brokerage first filed its appeal of a lower court’s denial of REX’s motion for a new trial.
According to the DOJ’s motion, the appeals court has allocated 20 minutes of speaking time to each side. In addition to this, the DOJ is requesting five minutes of time to speak. The government agency said it “believes that government participation at oral argument would be helpful to the Court. The United States enforces the federal antitrust laws and has a significant interest in the proper application of those laws. That interest includes the application of the antitrust laws to the real-estate industry.”
Originally filed by REX in March 2021, the lawsuit alleges that changes made to Zillow’s website “unfairly hides certain listings, shrinking their exposure and diminishing competition among real estate brokers.”
Two months prior, in January 2021, Zillow began moving homes not listed on the MLS out of users’ initial search results and onto a second tab. This adhered to an optional NAR rule, which prevents those who choose to adopt it from commingling MLS listings with non-MLS listings. Despite claiming that it did not support this rule, Zillow chose to adopt it and created a two-tab design for MLS listings and “other listings.”
In January 2022, NAR filed a countersuit claiming that REX uses false advertising and misleading claims to deceive consumers in violation of the Lanham Act. The countersuit was dismissed in April 2022.
In May 2022, REX ceased its brokerage operations. And a little over a year later, the three parties involved in the case each filed motions for summary judgment on either the entire lawsuit or portions of it.
Judge Thomas Zilly, who oversaw the case, dismissed REX’s antitrust claims against NAR and Zillow. But he allowed the discount brokerage’s false advertising claim under the Lanham Act, and a claim for unfair or deceptive trade practices under Washington’s Consumer Protection Act (WCPA), to stand.
At a trial in September 2023, the court ruled in favor of Zillow on the remaining charges. Roughly six weeks later, REX filed its motion for a new trial. In the request, REX argued that it was unfairly prevented from presenting testimony about agent commissions to the jury.
A Seattle jury ultimately found that REX did not prove Zillow used false advertising in its decision to put non-MLS listings on a different section of the website, and that Zillow proved its defense on REX’s second claim that Zillow acted deceptively and unfairly.
The DOJ first became involved in REX’s appeal in June 2024, when it filed an amicus brief in which it “took no position on the ultimate outcome of the case.”
In its brief, the DOJ claimed that despite being optional, NAR’s “no-commingling” rule may still support anticompetitive behavior, something it claims the district court did not fully examine in its ruling.
“The district court applied an incomplete legal framework in evaluating whether REX had presented a genuine dispute of material fact on concerted action in this case,” the filing stated.
The department also argued that the court’s ruling did not look into the risks of trade groups like NAR avoiding antitrust oversight through optional regulations.
“The judge’s decision created a loophole that could allow associations to sidestep antitrust scrutiny by cloaking restrictive rules as optional,” the DOJ stated in its brief.
The DOJ was previously granted five minutes to participate in oral arguments as an amicus curiae in the Ninth Circuit involving PLS.com’s suit against NAR. That suit deals with NAR’s Clear Cooperation Policy, not its optional no-commingling rule.
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