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Zillow moves to have REX suit dismissed

Less than 10 days after Zillow’s long-awaited courtroom battle with REX kicked off, the real estate giant believes REX cannot prove its claims

After nearly 10 days of trial proceedings, Zillow is ready for its years-long legal battle with REX Real Estate to be over. On Wednesday, just nine days after the long-awaited trial’s September 18 start date, the real estate behemoth file a motion for judgment as a matter of law in the U.S. District Court in Seattle hearing the trial.

A judgement as a matter of the law is permissible if there is no legally sufficient basis for a reasonable jury to find for the nonmoving party (in this instance, REX) on that issue.

Originally filed by REX in March 2021, against Zillow and the National Association of Realtors, 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 out of its initial search results for sellers who chose not to use agents adhering to the NAR and local multiple listing service (MLS) practices, creating a two-tab design for agent 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, but the countersuit was dismissed in late April 2022.

In mid-May 2022, REX ceased its brokerage operations

A little over a year later, in mid-June 2023, the three parties involved in the suit, all filed motions for summary judgment on at least some issues, if not the entire lawsuit.

While Judge Thomas Zilly dismissed REX’s antitrust claims against NAR and Zillow, 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.

According to Zillow’s latest motion, since the start of the trial, REX has failed to produce sufficient evidence on either claim.

“The evidence REX promised would come at trial has not materialized, and the evidence introduced at trial falls short of what is required for multiple elements of these claims,” the motion reads. “Accordingly, REX’s claims should not be put to a jury, and the Court should enter judgment in Zillow’s favor as a matter of law under Federal Rule of Civil Procedure 50(a).”

In order to prove their Lanham Act claim, REX must identify particular statements made by Zillow and then show that they are false. According to earlier filings, REX highlighted Zillow’s tab labels separating types of listings as the statements it was challenging.

While Zillow acknowledged that the court determined that the tab labels are literally false, as REX employs agents who are realtor association members, “it has never has addressed whether the default status or two-tab display as a whole are false statements of fact,” which would be necessary to prove the Lanham Act claim.

“The non-communicative aspects of Zillow’s display—that merely divide listings and default one tab over the other—do not make any such claim,” the motion reads. “Indeed, design decisions that ‘limit [users’] access’ to materials are distinct from any ‘false statement.’”

In addition, for the Lanham Act to apply, the speech in question must be commercial speech, something Zillow claims the two-tab display is not.

“There is no evidence that Zillow intended to convey any particularized message with the default status or two-tab display or that the consumers who viewed these features took away any particular message,” the filing states. “Zillow is an ‘online database of information’ that provides ‘free, publicly available’ information that is ‘not transactional.’”

The motion also claims that “REX has not developed evidence that any aspect of Zillow’s two-tab display was meant to influence consumers to buy defendant’s goods or services,” and that there is “no evidence that a substantial part of Zillow’s audience was deceived by the default status or two-tab display.”

Finally, Zillow also states that that REX “has not even attempted to show injury flowing directly from the alleged deception caused by the distinct aspects of the two-tab display,” something that is necessary if REX hopes to be awarded damages.

“REX’s own fact witnesses did not offer any testimony supporting the notion that the labels, in particular, caused them harm,” the motion continues. “Moreover, the fact that there was an impact on for-sale-by-owner listings—listings that properly would be labeled as ‘Other listings’—shows it is not the labels that had this impact.”

Regarding the WCPA claim, Zillow states that all of the same reasons from the Lanham Act claim apply.

Zillow did not wish to comment and REX has not returned a request for comment.

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