2021-04-30 Defendant The National Assoc. of REALTORS (DCKT 64 - 0)

Case 2:21-cv-00312-TSZ Document 64 Filed 04/30/21 Page 1 of 31
1 THE HONORABLE THOMAS S. ZILLY
9 UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF WASHINGTON
10 AT SEATTLE
11 REX – REAL ESTATE EXCHANGE, INC.,
12 Plaintiff, Case No. 2:21-cv-00312-TSZ

13 v. THE NATIONAL ASSOCIATION OF
REALTORS’® OPPOSITION TO
14 ZILLOW, INC., et al. PLAINTIFF’S MOTION FOR
PRELIMINARY
15 Defendants. INJUNCTION
16 NOTED: May 10, 2021
17 ORAL ARGUMENT REQUESTED
18
19
20
21
22
23
24
25
26
27
28
OPP. TO MOT. FOR PRELIM. INJUNCTION QUINN EMANUEL URQUHART & SULLIVAN, LLP
1109 First Avenue, Suite 210
Case No. 2:21-cv-00312-TSZ Seattle, WA 98101
(206) 905-7000
1 TABLE OF CONTENTS
Page
2
I. INTRODUCTION ..................................................................................................................1
3
II. FACTUAL BACKGROUND ................................................................................................4
4
A. NAR Promulgates Guidance for Multiple Listing Services Operated by
5 Local Associations of REALTORS® ........................................................................4
6 B. REX Challenged an Optional Policy That Has Not Been Adopted by Many
Local Associations of REALTORS® ........................................................................4
7
C. The Statement Challenged by REX Has Not Substantively Changed Since
8 2001, Well Before Zillow Joined NAR-Affiliated Multiple Listing Services ...........6
9 D. REX Is a Real Estate Brokerage That Advertises Its Properties on Zillow

and Other Locations on the Internet ...........................................................................7
10
E. Zillow Announced in September 2020 That It Was Joining NAR-Affiliated
11 Multiple Listing Services and Would Change Its Website in January 2021 ..............7
12 III. ARGUMENT .........................................................................................................................9
13 A. REX Ignores the Controlling Preliminary Injunction Standards ...............................9
14 1. REX Ignores Winter’s Four-Part Test ............................................................9
15 2. REX Also Ignores the Heightened Standard for Mandatory

Injunctions ....................................................................................................10
16
B. REX Does Not Face Any Danger of Irreparable Injury ...........................................11
17
1. REX’s Delay Shows It Will Not Be Irreparably Harmed ............................11
18
2. REX’s Alleged Injuries Are Not Irreparable ................................................12
19
3. REX’s Economist Provides Nothing Useful on Irreparable Harm ..............14
20
C. REX’s Claims Are Meritless ....................................................................................15
21
1. REX Has Not Asserted a Valid Antitrust Claim ..........................................15
22
a. There Is No Unlawful Agreement ....................................................15
23
b. There Is No Harm to Competition and Consumers ..........................17
24
c. There Is No Boycott .........................................................................22
25
2. REX Has No Valid False Advertising Claims Against NAR ......................23
26
D. The Balance of Hardships and the Public Interest Weigh Against an
27 Injunction .................................................................................................................24
28 CONCLUSION ................................................................................................................................24
Case No. 2:21-cv-00312-TSZ i Seattle, WA 98101
(206) 905-7000
1 TABLE OF AUTHORITIES
Page
2
Cases
3
adidas Am., Inc. v. Skechers USA, Inc.,
4
890 F.3d 747, 756 (9th Cir. 2018) .............................................................................................. 13
5
A Woman’s Friend Pregnancy Res. Clinic v. Becerra,
901 F.3d 1166 (9th Cir. 2018) ................................................................................................ 9, 10
6
Alliance for the Wild Rockies v. Cottrell,
7
632 F.3d 1127 (9th Cir. 2011) .................................................................................................... 10
8
Allstate Ins. Co. v. Kia Motors Am., Inc.,
No. 16-6108, 2017 WL 10311211 (C.D. Cal. Sept. 20, 2017) ................................................... 15
9
Am. Ad Mgmt., Inc. v. Gen. Tel. Co. of Cal.,
10
190 F.3d 1051 (9th Cir. 1999) .................................................................................................... 17
11
Am. Passage Media Corp. v. Cass Commc’ns, Inc.,
750 F. 2d 1470 (9th Cir. 1985) ............................................................................................. 10, 14
12
Am., Inc. v. Skechers USA, Inc.,
13
890 F.3d 747 (9th Cir. 2018) ...................................................................................................... 15
14
Atl. Richfield Co. v. USA Petroleum Co.,
495 U.S. 328 (1990) ................................................................................................................... 18
15
Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc.,
16
429 U.S. 477 (1977) ................................................................................................................... 10
17
Cloanto Corp. v. Hyperion Ent. CVBA,
No. 18-381, 2019 WL 1489185 (W.D. Wash. Apr. 3, 2019) ............................................... 13, 14
18
Comphy Co. v. Amazon.com, Inc.,
19
371 F. Supp. 3d 914 (W.D. Wash. 2019) ................................................................................... 14
20
Corazon v. Aurora Loan Servs., LLC,
No. 11-00542 SC, 2011 WL 1740099 (N.D. Cal. May 5, 2011) ............................................... 24
21
Gen. Elec. Co. v. Joiner,
22
522 U.S. 136 (1997) ................................................................................................................... 22
23
Goldie’s Bookstore, Inc. v. Superior Ct.,
739 F.2d 466 (9th Cir. 1984) ...................................................................................................... 13
24
Hahn v. Or. Physicians’ Serv.,
25
868 F.2d 1022 (9th Cir. 1988) .................................................................................................... 22
26
Kinderstart.com LLC v. Google, Inc.,
No. C 06-2057 JF(RS), 2006 WL 3246596 (N.D. Cal. July 13, 2006) ...................................... 17
27
Kiva Health Brands LLC v. Kiva Brands Inc.,
28
402 F. Supp. 3d 877 (N.D. Cal. 2019) ....................................................................................... 14
Case No. 2:21-cv-00312-TSZ ii Seattle, WA 98101
(206) 905-7000
1 Lydo Enterps., Inc. v. City of Las Vegas,

745 F.2d 1211 (9th Cir. 1984) ................................................................................................ 1, 11
2
Marlyn Nutraceuticals, Inc. v. Mucos Pharma GmbH & Co.,
3 571 F.3d 873 (9th Cir. 2009) ...................................................................................................... 11
4 McGlinchy v. Shell Chemical Co.,

845 F.2d 802 (9th Cir. 1988) ...................................................................................................... 22
5
Mirina Corp. v. Marina Biotech,
6 770 F. Supp. 2d 1153 (W.D. Wash. 2011) ................................................................................. 13
7 Monsanto Co. v. Spray-Rite Serv. Corp.,

465 U.S. 752 (1984) ................................................................................................................... 16
8
Nw. Wholesale Stationers, Inc. v. Pac. Stationery & Printing Co.,
9 472 U.S. 284 (1985) ................................................................................................................... 22
10 Oakland Tribune, Inc. v. Chronicle Pub. Co., Inc.,

762 F.2d 1374 (9th Cir. 1985) .............................................................................................. 11, 12
11
Ohio v. Am. Express Co.,
12 138 S. Ct. 2274 (2018) ............................................................................................................... 18
13 Paladin Assocs., Inc. v. Montana Power Co.,

328 F.3d 1145 (9th Cir. 2003) .................................................................................................... 22
14
Pom Wonderful LLC v. Pur Beverages LLC,
15 No. 13-6917, 2015 WL 10433693 (C.D. Cal. Aug. 6, 2015) ..................................................... 15
16 Pool Water Prods. v. Olin Corp.,

258 F.3d 1024 (9th Cir. 2001) .................................................................................................... 18
17
Rebel Oil Co. v. Atl. Richfield Co.,
18 51 F.3d 1421 (9th Cir. 1995) ...................................................................................................... 18
19 Scholz v. Migliaccio,
No. 13-1229, 2013 WL 4482077 (W.D. Wash. Aug. 20, 2013) ................................................ 13
20
Stormans, Inc. v. Selecky,
21 586 F.3d 1109 (9th Cir. 2009) .................................................................................................... 24
22 Sundance Land Corp. v. Cmty. First Fed. Sav. & Loan Ass’n,
840 F.2d 653 (9th Cir. 1988) .................................................................................................. 9, 10
23
Surf City Steel, Inc. v. Int’l Longshore & Warehouse Union,
24 No. 14-05604, 2017 WL 5973279 (C.D. Cal. Mar. 7, 2017) ..................................................... 23
25 Top Agent Network, Inc. v. Nat’l Ass’n of Realtors,

No. 20-CV-3198, 2020 WL 4013223 (N.D. Cal. July 16, 2020) ............................................... 12
26
United States v. BNS, Inc.,
27 858 F.2d 456 (9th Cir. 1988) ...................................................................................................... 10
28
Case No. 2:21-cv-00312-TSZ iii Seattle, WA 98101
(206) 905-7000
1 Valeo Intellectual Prop., Inc. v. Data Depth Corp.,

368 F. Supp. 2d 1121 (W.D. Wash. 2005) ................................................................................. 13
2
Wells Fargo & Co. v. ABD Ins. & Fin. Servs., Inc.,
3 No. 12-3856, 2014 WL 4312021 (N.D. Cal. Aug. 28, 2014) ..................................................... 15
4 Wilcox v. First Interstate Bank of Or., N.A.,

815 F.2d 522 (9th Cir. 1987) ................................................................................................ 16, 17
5
Winter v. Nat. Res. Def. Council, Inc.,
6 555 US 7 (2008) ............................................................................................................... 9, 10, 24
7 Statutory Authorities
8 15 U.S.C. § 26 ................................................................................................................................. 10
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
Case No. 2:21-cv-00312-TSZ iv Seattle, WA 98101
(206) 905-7000
1 I. INTRODUCTION
2 REX wants to use the antitrust laws to force NAR—a trade association—to adopt an
3 affirmative requirement governing its 1.4 million members and the nearly 700 multiple listing
4 services run by local associations of REALTORS® that would force Zillow to give REX its
5 preferred position on Zillow’s website. But REX has no right to that relief. Zillow’s decisions
6 concerning how it labels, groups, and publishes real estate listings on its website cannot form the
7 basis of any claim against NAR. And REX cannot use the antitrust laws to blame Zillow and NAR
8 for its own failure to gain traction in the marketplace—particularly where marketplace participants
9 have called REX’s claims about its business and the multiple listing system “misleading” and
10 “false.” In short, REX’s motion for preliminary injunctive relief should be denied because it has
11 failed to meet its burden on each of the four elements that must be established before the Court could
12 issue the sweeping, mandatory injunction that REX has requested.
13 REX is not likely to suffer irreparable harm. “A preliminary injunction is sought upon the
14 theory that there is an urgent need for speedy action to protect the plaintiff’s rights,” and “by sleeping
15 on its rights a plaintiff demonstrates the lack of need for speedy action.” Lydo Enterps., Inc. v. City
16 of Las Vegas, 745 F.2d 1211, 1213 (9th Cir. 1984) (cleaned up). REX has not demonstrated any
17 urgent need for preliminary injunctive relief in this case.
18 In January 2021, Zillow changed its website to display home listings under two separate
19 tabs: a blue tab (labeled “Agent Listings”) and a white tab (labeled “Other Listings”):
20
21
22
23
24 See Compl. ¶ 64. On the blue tab, Zillow displays homes that were listed for sale on a local multiple
25 listing service. On the white tab, Zillow displays other homes, including homes listed for sale by
26 REX. REX filed suit in March 2021, claiming a statement published by NAR more than 20 years
27 ago, which allows local multiple listing services to decide whether their members must separately
28
Case No. 2:21-cv-00312-TSZ 1 Seattle, WA 98101
(206) 905-7000
1 display listings obtained from multiple listing services and listings obtained from other sources,
2 forced Zillow to change its website design.
3 As early as September 2020, however, REX and the rest of the real estate industry knew that
4 Zillow’s website would change in January 2021. REX in fact knew no later than December 2020
5 that its listings would appear on the “white tab” of Zillow’s website with “Other Listings,” and
6 REX’s CEO has conceded he was concerned about the likely impact of the change on REX’s
7 business at that time. Yet REX did not file suit and seek immediate injunctive relief. Instead, it
8 waited until March 2021—months after Zillow’s website changed—to seek a mandatory injunction
9 that would require immediate changes to Zillow’s website and NAR’s rules. That makes REX’s
10 motion six months too late for REX to credibly claim that it needs preliminary injunctive relief.
11 REX is not likely to succeed on the merits. REX’s antitrust and false advertising claims
12 against NAR are meritless.
13 First, there is no evidence of an agreement between NAR and Zillow, which is a
14 foundational element of REX’s Section 1 antitrust claim. In January 2021, Zillow joined some
15 multiple listing services that require their members to separately display listings from multiple
16 listing services and those from other sources. Zillow also joined some multiple listing services that
17 do not have such a requirement. And Zillow joined some multiple listing services that have nothing
18 to do with NAR. Zillow then designed its website to comply with the rules adopted by the various
19 local multiple listing services it joined. Zillow elected to take a single, nationwide approach to its
20 website design. Zillow could have used an alternative design that displayed listings differently in
21 different parts of the country to account for regional differences in local multiple listing service
22 rules. But for its own reasons, as it is entitled to do under the antitrust laws, it decided against that
23 approach. Such a unilateral decision by Zillow cannot give rise to antitrust liability for NAR under
24 Section 1 of the Sherman Act.
25 While REX tries to connect NAR and Zillow through an optional provision in NAR’s model
26 multiple listing service rules, NAR’s handbook expressly provides discretion to local multiple
27 listing services to decide whether to allow or prohibit commingling of listings data. Thus, the
28 provision cited by REX is not an agreement between NAR and Zillow (or anyone else). And it has
(206) 905-7000
1 no impact on whether a local multiple listing service has decided to allow or prohibit commingling
2 of listings data.
3 Second, REX has not shown competition has been harmed by the design of Zillow’s website,
4 which is another required element of its antitrust claim. As a matter of black letter antitrust law,
5 Zillow can choose to not post REX’s listings on its website at all or it can choose to display them in
6 any particular way (in fact, REX knows this is true, as REX has decided not to display all of the
7 available home listings on its own website for the markets in which REX participates). That means
8 Zillow’s decision to publish REX’s listings, and in the particular way it has, cannot harm
9 competition. Moreover, REX’s motion also fails because REX has not produced any evidence that
10 home buyers and sellers have been harmed by the design of Zillow’s website. In its voluminous
11 submissions, REX has not shown that whether REX’s listings appear on the blue or white tab on
12 Zillow’s website has any impact on the prices, output, or quality in any relevant antitrust market.
13 Third, REX has not offered any evidence to support its false advertising claims against NAR,
14 which are based on Zillow’s decision to label REX listings as “Other Listings” instead of “Agent
15 Listings.” NAR had nothing to do with Zillow’s decision to use those labels, and REX has presented
16 no evidence to the contrary.
17 The balance of the equities tips in NAR’s favor. The injunction REX seeks against NAR
18 would injure NAR, its members, and the multiple listing services affiliated with NAR. REX wants
19 the Court to order NAR to adopt new, mandatory rules that would immediately apply to the nearly
20 700 multiple listing services that are run by NAR-affiliated associations. That would impose an
21 incredible burden on NAR, multiple listing services affiliated with NAR, and their members. And
22 it would create substantial confusion in the entire real estate industry, distracting multiple listing
23 services and agents from doing what they do best—helping consumers to buy and sell homes.
24 REX has failed to show an injunction is in the public interest. REX’s public interest
25 argument simply assumes that it has proven an antitrust violation. But it has not. The public has no
26 cognizable interest in the Court meddling with the design of Zillow’s website or requiring NAR to
27 so meddle.
28
(206) 905-7000
1 For all these reasons, NAR respectfully asks the Court to deny REX’s motion for preliminary
2 injunctive relief.
3 II. FACTUAL BACKGROUND
4
A. NAR Promulgates Guidance for Multiple Listing Services Operated by Local
Associations of REALTORS®
5
6 A multiple listing service is a cooperative of real estate professionals that facilitates real
7 estate transactions in a particular geographic region. Galicia Decl. ¶ 4. A multiple listing service
8 maintains a database of home listings for its geographic area, which provides a single location where
9 buyers (through their agents) can search available listings, and sellers (through their agents) can
10 publicize their property to a large number of in-market buyers. Id. Multiple listing services establish
11 rules that standardizes the information that is shared, thus creating a highly curated and easily
12 searchable set of listings, streamlining a large part of the home buying process, and lowering
13 transaction costs for consumers. See Glass Decl., Ex. 1 at 12.
14 NAR is a trade association for real estate professionals, and only members of NAR are
15 permitted to call themselves REALTORS®. Galicia Decl. ¶ 2. NAR publishes a Handbook on
16 Multiple Listing Policy, which is a guide for local associations of REALTORS® regarding the
17 operation of multiple listing services (if they have one). Id. ¶ 3. The Handbook contains four
18 categories of model policies: mandatory, optional, recommended, and informational. Id. ¶ 6.
19 REALTOR® association-owned multiple listing services are only required to follow mandatory
20 policies to maintain their affiliation with NAR and insurance coverage under NAR’s master
21 professional liability insurance program. Id. ¶ 7. They are not required to adopt optional,
22 recommended, or informational rules. Id.
23
B. REX Challenged an Optional Policy That Has Not Been Adopted by Many
Local Associations of REALTORS®
24
25 REX has challenged an optional NAR policy relating to the publication of home listings
26 information obtained through Internet Data Exchange (IDX) feeds. IDX feeds provide a way for
27 members of multiple listing services to (1) obtain data from the multiple listing service related to
28 listings submitted by other members; and (2) publish that data on their own websites and mobile
(206) 905-7000
1 applications. Galicia Decl. ¶ 8. NAR promulgates model rules related to IDX feeds in the
2 Handbook on Multiple Listing Policy. Id. The particular policy that REX cites in its complaint,
3 Section 18.3.11 of NAR’s model IDX rules, is optional and simply provides:
4 Listings obtained through IDX feeds from REALTOR® Association MLSs where
the MLS participant holds participatory rights must be displayed separately from
5 listings obtained from other sources. Listings obtained from other sources (e.g., from
other MLSs, from non-participating brokers, etc.) must display the source from
6 which each such listing was obtained.
7 Id. ¶ 9.
8 Section 18.3.11 has not been adopted by all REALTOR® association-owned multiple listing
9 services. Id. ¶ 16. For example, the California Regional Multiple Listing Service (CRMLS), which
10 is the largest REALTOR® association-owned multiple listing service in the country and covers
11 much of California, has not adopted the Policy. Id. In fact, Section 12.16.14 of CRMLS’s IDX
12 Policy expressly permits commingling of listings:
13
A Participant or Subscriber may co-mingle listings through IDX from this MLS
with listings from other MLS sources on its IDX display, provided all such displays
14
are consistent with these rules. Co-mingling is (a) the ability for a visitor to the site
to execute a single search that searches any portion of the IDX database at the same
15
time it searches listing data from any other MLS source(s); or (b) the display on a
single web page of any portion of the IDX database and listing data from any other
16
MLS source. Listings obtained from other MLSs must display the source from
which each such listing was obtained. . . .
17
18 Glass Decl., Ex. 2. Zillow appears to be a member of CRMLS, Glass Decl., Ex. 3, and REX holds
19 itself out as a licensed real estate brokerage in California, including in CRMLS’s territory, see Glass
20 Decl., Ex. 4 at 3.
21 Other significant REALTOR® association-owned multiple listing services that have not
22 adopted the Policy include Georgia, Golden Empire (which covers Bakersfield, California),
23 Houston, Las Vegas, New Jersey, Garden State (New Jersey), Arizona Regional, Oregon Regional
24 (Portland), Northern Nevada Regional (Reno), and Central Virginia Regional. Glass Decl., Exs. 5-
25 14. Again, both Zillow and REX participate in these areas. Glass Decl., Exs. 15-25. Yet again,
26 REX is a licensed real estate brokerage in this area, Glass Decl., Ex. 4 at 3, and Zillow appears to
27 be a member of many of these multiple listing services, Glass Decl., Exs. 16-25.
28
(206) 905-7000
1 C. The Statement Challenged by REX Has Not Substantively Changed Since 2001,
Well Before Zillow Joined NAR-Affiliated Multiple Listing Services
2
3 Section 18.3.11 of NAR’s model IDX policy was first adopted twenty years ago, and it has
4 not substantively changed since that time. Galicia Decl. ¶ 11. In 2005, the United States Department
5 of Justice filed an antitrust complaint in the Northern District of Illinois challenging certain
6 mandatory NAR rules regarding the display of multiple listing service data using the Internet. Glass
7 Decl., Ex. 26. At the time that lawsuit was filed, NAR’s Handbook on Multiple Listing Policy
8 contained the following version of the Policy at issue in this case:
9 MLSs cannot prohibit Participants from downloading and displaying or framing

other brokers’ listings obtained from other sources, e.g., other MLSs, non-
10 participating brokers, etc., but can, as a matter of local option, require that listings
obtained through IDX be searched separately from listings obtained from other
11 sources, including other MLSs.
12 Galicia Decl. ¶ 13. In 2008, NAR and the Department of Justice settled that case. The settlement
13 terms were memorialized in a consent decree, which was entered by the District Court on November
14 18, 2008. Glass Decl., Ex. 27. The consent decree contained the following provision:
15 An MLS may not prohibit Participants from downloading and displaying or

framing listings obtained from other sources, e.g., other MLSs or from brokers not
16 participating in that MLS, etc., but may require either that (i) such information be
searched separately from listings obtained from other sources, including other
17 MLSs . . . .
18 Id., Ex. A, § IV.C.3. The economist hired by REX here, Dr. Robert Majure, worked on the 2008
19 NAR litigation when he was an economist in the Department of Justice. See ECF 15, Ex. A at ¶ 3.
20 In the 2009 version of NAR’s Handbook on Multiple Listing Policy—the first version that
21 took effect after the 2008 consent decree—Section 18.3.11 stated:
22 MLSs cannot prohibit participants from downloading and displaying or framing

other brokers’ listings obtained from other sources, e.g., other MLSs, non-
23 participating brokers, etc., but can, as a matter of local option, require that listings
obtained through IDX be searched separately from listings obtained from other
24 sources, including other MLSs.
25 Galicia Decl. ¶ 15. The current version of the Section 18.3.11—which provides that local multiple
26 listing services may require listings obtained from multiple listing services to be separately displayed
27 from listings obtained from other sources—is substantively identical to this language and to
28 Paragraph IV.C.3 of the 2008 consent decree.

(206) 905-7000
1 D. REX Is a Real Estate Brokerage That Advertises Its Properties on Zillow and
Other Locations on the Internet
2
3 REX is a real estate brokerage that operates its own website that publishes information about
4 its own home listings. Glass Decl., Ex. 28. REX does not appear to publish listings from other
5 brokerage firms on its own website. Glass Decl., Ex. 15 (“Browse REX Listings in Your Area”).
6 REX does, however, advertise its own listings on Zillow’s website, ECF 6, Lawrence Decl. ¶ 4, and
7 in many other places on the internet, infra pp. 20, 23.
8 REX claims to offer an “innovative” business model that “harnesses technology to match
9 buyers and sellers without the need for expensive commissions.” ECF 5, at 9. It boasts “[t]his
10 technology does work that agents used to do in the pre-internet era, resulting in high customer
11 satisfaction and low costs.” Id. Consumers, however, apparently have a much different experience
12 using REX’s services. For example, HomeOpenly, an online marketplace for real estate agents,
13 reports that “REX significantly lowers home’s exposure to buyers working with their own agent and
14 misrepresents many advantages of using MLS to sellers.” Glass Decl., Ex. 29 at 2. It finds that
15 REX makes “misrepresent[ations]” and “false” statements about multiple listing services, other
16 brokers, and its own services, and it concludes that REX, “unfortunately, claims a lot more than
17 what it actionably delivers.” Id. at 4. According to HomeOpenly, “REX Real Estate offers nothing
18 new over most any real estate agent, it simply games a few pieces of the existing process in an effort
19 to claim that it has a found a way to replace an outdated MLS.” Id. at 5.
20
E. Zillow Announced in September 2020 That It Was Joining NAR-Affiliated
Multiple Listing Services and Would Change Its Website in January 2021
21
22 On September 22, 2020, Zillow issued a press release announcing that it would launch its
23 own real estate brokerage, become a full participant in many multiple listing services operated by
24 local REALTOR® associations, and start obtaining listings through IDX feeds maintained by local
25 multiple listing services. Glass Decl., Ex. 30. In a video published on Zillow’s YouTube channel,
26 Errol Samuelson, Zillow’s Chief Industry Development Officer, explained some of the changes to
27 Zillow’s business:
28
(206) 905-7000
1 We will be simplifying the way we get our listing data, moving from thousands of
disparate data feeds to MLS Internet Data Exchange, or IDX feeds, which, as you
2 know, are reserved for licensed entities. . . . [W]e also plan to join local and state
associations, and the National Association of REALTORS®. In the coming days,
3 we’ll be reaching out to our MLS partners to help make this transition seamless,
working together to become active participants and receive listings through IDX
4 feeds, starting in January 2021.
5 Glass Decl., Ex. 31. Zillow also set up a dedicated page on its website to notify its partners and the
6 public that it would be joining local multiple listing services throughout the country and obtaining
7 IDX data starting in January 2021. Glass Decl., Ex. 32. And it published a blog post by Susan
8 Daimler, a President of Zillow’s Premier Agents business, in which REX is a participant, ECF 7,
9 Barret Decl. ¶¶ 5-6, to address these upcoming changes, Glass Decl., Ex. 33. In her blog post, Ms.
10 Daimler noted that Zillow would be “introducing a new search toggle to make it easier to filter
11 between agent listings and other listings.” Id.
12 “In the fall of 2020, [REX] began hearing that Zillow intended to make changes to its display
13 in conjunction with Zillow joining MLSs and NAR.” ECF 7, Barrett Decl. ¶ 6. “[I]n December
14 2020,” REX’s CEO learned “that Zillow intended to change its website format to somehow display
15 REX listings differently than MLS listings.” ECF 8, Ryan Decl. ¶ 21. He was “immediately
16 concerned and wanted to understand specifically what changes Zillow intended to make.” Id. ¶ 22.
17 REX contacted Zillow and learned, no later than December 21, 2020, that Zillow intended to create
18 a “second tab” in its search results display to show “Non-MLS sourced listings.” ECF 7, Barrett
19 Decl., Ex A.
20 In mid-January 2021, Zillow started displaying two groups: blue (“Agent Listings”) and
21 white (“Other Listings”). See ECF 7, Barret Decl. ¶ 7. An FAQ section of Zillow’s website notes:
22 “Agent Listings” are homes listed by real estate agents on a Multiple Listing
Service (MLS). “Agent Listings” do not include homes for sale by owner, non-
23 MLS auctions and foreclosures. “Other Listings” are homes for sale by owner,
non-MLS auctions, foreclosures and other properties. “Other Listings” do not
24 include homes listed by agents on an MLS.
25 Glass Decl., Ex. 34 at 6-7. According to Zillow, “[t]here’s no need to search twice” to access both
26 type of listings. Glass Decl., Ex. 35. “For example, if you’re looking for a three-bed, two-bath
27 home, both ‘Agent Listings’ and ‘Other Listings’ will display homes that meet th[ose] criteria.
28 Simply toggle back and forth to see homes in both groups.” Id. The two groupings of listings on
(206) 905-7000
1 Zillow’s website were covered by the real estate industry press. Glass Decl., Ex. 36 (“On the Zillow
2 mobile app, non-agent listings are filtered out as a default, but users can switch between agent and
3 non-agent listings.”).
4 III. ARGUMENT
5 A. REX Ignores the Controlling Preliminary Injunction Standards
6 1. REX Ignores Winter’s Four-Part Test
7 To obtain a preliminary injunction, a plaintiff must “establish that he is likely to succeed on
8 the merits, that he is likely to suffer irreparable harm in the absence of preliminary relief, that the
9 balance of equities tips in his favor, and that an injunction is in the public interest.” Winter v. Nat.
10 Res. Def. Council, Inc., 555 US 7, 20 (2008). “A plaintiff must make a showing on all four prongs
11 of the Winter standard to obtain a preliminary injunction.” A Woman’s Friend Pregnancy Res.
12 Clinic v. Becerra, 901 F.3d 1166, 1167 (9th Cir. 2018). Those are: (1) “that he is likely to suffer
13 irreparable harm in the absence of preliminary relief”; (2) “that he is likely to succeed on the merits,”
14 or in the alternative substantial questions going to the merits; (3) “that the balance of the equities
15 tips in his favor”; and (4) “that an injunction is in the public interest.” Id.
16 REX ignores Winter. Instead of satisfying the Winter test, REX claims “[t]he Ninth Circuit
17 has long recognized that when an antitrust plaintiff seeks injunctive relief, ‘[a]ll that is required is
18 that a claimant show a threatened loss or injury cognizable in equity proximately resulting from the
19 alleged antitrust violation, and that the injury be of the type the antitrust laws were designed to
20 prevent.’” ECF 5, Mot. at 5 (quoting Sundance Land Corp. v. Cmty. First Fed. Sav. & Loan Ass’n,
21 840 F.2d 653, 661 (9th Cir. 1988)). REX is wrong. Sundance, the pre-Winter case that REX cites
22 for its erroneous standard, did not involve antitrust claims or a request for a preliminary injunction.
23 That case instead related to claims brought under the Home Owner’s Loan Act of 1933. Id. at 655.
24 The part of the Sundance decision cited by REX discusses the doctrine of antitrust standing because
25 Section 16 of the Clayton Act (which allows private parties to pursue injunctive relief in antitrust
26 cases) is “substantially similar to the parallel [Home Owner’s Loan Act] injunction provision.” Id.
27 at 661. And as Section 16 of the Clayton Act makes clear, preliminary injunctive relief is only
28 available to private litigants in antitrust cases “under the same conditions and principles as injunctive
(206) 905-7000
1 relief against threatened conduct that will cause loss or damage is granted by courts of equity,”
2 which includes “a showing that the danger of irreparable loss or damage is immediate.” 15 U.S.C.
3 § 26. In other words, the standard for a preliminary injunction in antitrust cases is the same standard
4 that must be met by any plaintiff seeking preliminary injunctive relief in federal court. And that
5 standard was established by the Supreme Court in Winter.
6 When REX argues that “an injunction is warranted” if it simply can prove “Defendants’
7 anticompetitive conduct harms consumers and the marketplace in ways that can never be fully
8 remedied,” ECF 5, Mot. at 18, it conflates the standard for showing antitrust injury—i.e., an injury
9 of the sort “the antitrust laws were designed to prevent”—with the standard for obtaining
10 preliminary injunctive relief. Antitrust injury is a necessary element for a plaintiff to prevail on the
11 merits in every private antitrust case, Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477,
12 489 (1977), but it is not the same as the requirement of irreparable injury to obtain preliminary
13 injunctive relief. Contrary to what REX argues, an antitrust plaintiff must show both that he is likely
14 to prevail on the merits—which requires a showing of antitrust injury— and that he faces imminent
15 danger of irreparable harm. See A Woman’s Friend, 901 F.3d at 1167 (“A plaintiff must make a
16 showing on all four prongs to obtain a preliminary injunction.” (cleaned up) (quoting Alliance for
17 the Wild Rockies v. Cottrell, 632 F.3d 1127, 1135 (9th Cir. 2011)). None of the cases cited by REX
18 say otherwise. See Am. Passage Media Corp. v. Cass Commc’ns, 750 F. 2d 1470, 1473 (9th Cir.
19 1985) (affirming the lower court’s denial of a preliminary injunction motion because there was no
20 evidence the plaintiff had been irreparably injured); Sundance, 840 F.2d at 664 (holding a plaintiff
21 had standing to seek an injunction under the Home Owners’ Loan Act of 1933); United States v.
22 BNS, Inc., 858 F.2d 456, 466 (9th Cir. 1988) (enjoining a hostile takeover, but only until a trustee
23 could be appointed, to preserve the court’s jurisdiction to review a settlement proposed by the United
24 States under the Antitrust Procedures and Penalties Act).
25 Thus, REX’s irreparable harm arguments ignore the relevant legal standard, and its motion
26 for a preliminary injunction could be denied for that reason alone.
27 2. REX Also Ignores the Heightened Standard for Mandatory Injunctions
28 REX fails to account for the heightened burden that applies in cases where a plaintiff seeks
(206) 905-7000
1 a mandatory injunction. In such cases, when the plaintiff seeks an order that would require a
2 defendant to take action (instead of barring the defendant from taking action in order to maintain
3 the status quo), the plaintiff’s “burden . . . is doubly demanding.” Garcia, 786 F.3d at 746. Where
4 mandatory relief is requested, the plaintiff needs to “establish that the law and facts clearly favor its
5 position, not simply that it is likely to succeed.” Id. (cleaned up and emphasis added).
6 “In general, mandatory injunctions are not granted unless extreme or very serious damage
7 will result and are not issued in doubtful cases or where the injury complained of is capable of
8 compensation in damages.” Marlyn Nutraceuticals, Inc. v. Mucos Pharma GmbH & Co., 571 F.3d
9 873, 879 (9th Cir. 2009) (cleaned up). REX must meet this heightened standard here because it
10 wants the Court to (1) order Zillow to change its website and move REX’s listings to the blue tab;
11 and (2) order NAR to adopt a rule that would require multiple listing services affiliated with NAR
12 to pass rules that would force Zillow to display REX’s listings on the blue tab. And it has failed to
13 meet that heavy burden.
14 B. REX Does Not Face Any Danger of Irreparable Injury
15 1. REX’s Delay Shows It Will Not Be Irreparably Harmed
16 “A preliminary injunction is sought upon the theory that there is an urgent need for speedy
17 action to protect the plaintiff’s rights,” and “[b]y sleeping on its rights a plaintiff demonstrates the
18 lack of need for speedy action.” Lydo Enterps., Inc. v. City of Las Vegas, 745 F.2d 1211, 1213 (9th
19 Cir. 1984) (cleaned up). Indeed, as many courts have acknowledged, “wait[ing] months to seek an
20 injunction, undercut[s] [a] claim of irreparable harm.” Garcia, 786 F.3d at 746; see also Oakland
21 Tribune, Inc. v. Chronicle Pub. Co., Inc., 762 F.2d 1374, 1377 (9th Cir. 1985) (“Plaintiff’s long
22 delay before seeking a preliminary injunction implies a lack of urgency and irreparable harm.”).
23 That is exactly what REX did here—REX sat on its hands for nearly six months after Zillow publicly
24 announced that it was going to become a multiple listing service participant and change its website
25 to be consistent local multiple listing service policies:
26 September 22, 2020 Zillow first announced that it would become “an active
MLS participant.” ECF 5, Mot. at 6.
27
Fall 2020 REX understood that Zillow’s announcement would lead
28 to changes in how it displayed listings. See ECF 7, Barrett
(206) 905-7000
1 Decl. ¶ 6 (“In the fall of 2020, we began hearing that

Zillow intended to make changes to its display in
2 conjunction with Zillow joining MLSs and NAR.”).
3 December 21, 2020 REX knew that Zillow intended to create a “second tab”
to display “Non-MLS sourced listings.” Id. at Ex A.
4
Mid-January 2021 Zillow did exactly what it told REX it would do—it began
5 displaying MLS listings and Non-MLS listings on two
separate tabs. ECF 5, Mot. at 6.
6
March 9, 2021 REX filed suit two months after Zillow changed its
7 website and three months after REX knew that Zillow
intended to create a “second tab” for “Non-MLS sourced
8 listings”.
9 REX concedes that as early as December 2020 it was concerned that Zillow’s
10 “intended . . . change[s] [to its] website format . . . would have a significant negative impact upon
11 REX’s business.” ECF 8, Ryan Decl. ¶ 8. If it truly feared imminent irreparable injury, REX would
12 have immediately sought a preliminary injunction at that time, asking the Court to issue an order to
13 maintain the status quo and delay Zillow’s planned changes to its website. Instead, REX waited
14 months to file suit and seek preliminary injunctive relief. REX’s delay in bringing its motion
15 “implies a lack of urgency and irreparable harm,” Oakland Tribune, 762 F.2d at 1377, and provides
16 a sufficient basis to deny REX’s motion. “[W]ait[ing] six months before suing to enjoin the
17 enforcement of the policy, undermin[es] its contention that a preliminary injunction is warranted.”
18 Top Agent Network, Inc. v. Nat’l Ass’n of Realtors, No. 20-CV-3198, 2020 WL 4013223, at *2
19 (N.D. Cal. July 16, 2020). Because REX delayed, it has no credible argument that it now faces
20 irreparable injury.
21 2. REX’s Alleged Injuries Are Not Irreparable
22 REX’s claims it has “lost customers” and has “unhappy clients,” which has allegedly caused
23 “an unknown loss of business,” but those claims do not amount to irreparable injury. See ECF 5,
24 Mot. at 20-21. Lost customers and lost business, if proven, are injuries that can be adequately
25 addressed with money damages. See Mirina Corp. v. Marina Biotech, 770 F. Supp. 2d 1153, 1162
26 (W.D. Wash. 2011) (“[L]ost sales or business opportunities cannot constitute an irreparable harm,
27 because (assuming they exist in this case) even if they were difficult to calculate, they would still
28 constitute monetary, measurable damages.”); Scholz v. Migliaccio, No. 13-1229, 2013 WL 4482077,
(206) 905-7000
1 at *4 (W.D. Wash. Aug. 20, 2013) (reputational harm based on “fewer ticket sales” is an “economic
2 [harm] and can be remedied by damages”). They are “[m]ere financial injury,” which “will not
3 constitute irreparable harm.” Goldie’s Bookstore, Inc. v. Superior Ct., 739 F.2d 466, 471 (9th Cir.
4 1984).
5 Even if lost customers could amount to irreparable injury, the evidence proffered by REX
6 shows—at best—that Zillow’s website change had a negligible impact on REX’s business.
7 According to REX’s own submissions, in almost four months, REX has lost only three customers
8 and two prospective customers. ECF 9, Maggio Decl. ¶ 7 (recounting that a client “decided to cancel
9 her contract with REX”); ECF 12, Reina Decl. ¶ 7 (“She ultimately decided to terminate her contract
10 with REX.”); id. ¶ 8 (the client “decided to list the property with an MLS agent which would move
11 her listing to the main display”); ECF 11, Echevarria Decl. ¶ 8 (“This man decided not to list with
12 REX because of his concern regarding the lack of visibility for REX properties.”); ECF 38, Van
13 Ham Suppl. Decl. ¶ 3 (“[E]ven though the townhouse [listed with REX] sold, S.K. . . . advised us
14 that he was not going to list his primary residence with REX.”). Losing one customer per month is
15 not enough to meet REX’s burden, particularly where it is seeking a mandatory injunction. See
16 Valeo Intellectual Prop., Inc. v. Data Depth Corp., 368 F. Supp. 2d 1121, 1128 (W.D. Wash. 2005)
17 (evidence of one lost customer and one lost prospect not enough to establish irreparable injury).
18 While REX attempts to re-package its alleged lost customers into reputational harm, its
19 claims are wholly unsupported. “[E]vidence of loss of control over business reputation and damage
20 to goodwill can constitute irreparable harm,” but only if “there is concrete evidence in the record of
21 those things.” adidas Am., Inc. v. Skechers USA, Inc., 890 F.3d 747, 756 (9th Cir. 2018). That
22 requires evidence that goes “beyond speculation,” Cloanto Corp. v. Hyperion Ent. CVBA, No. 18-
23 381, 2019 WL 1489185, at *2 (W.D. Wash. Apr. 3, 2019). The plaintiff must “explain why final
24 remedies cannot adequately remedy any harm to [the plaintiff’s] . . . reputation[] and goodwill,”
25 Comphy Co. v. Amazon.com, Inc., 371 F. Supp. 3d 914, 929 (W.D. Wash. 2019). REX, however,
26 has failed to provide any evidence that its reputation has been harmed. REX points to “emails from
27 clients frustrated by the decline in the property viewings and showings after the Zillow change,” but
28 those claims amount to nothing more than complaints about lost customers or potential business.
(206) 905-7000
1 See ECF 10, Van Ham Decl., Ex. C (attaching an email from a client who expresses frustration at a
2 lack of showings but never mentions Zillow as a potential reason for the lack of showings). And
3 while REX claims increased co-listing of REX properties on multiple listing services has reduced
4 REX’s “brand recognition,” ECF 5, Mot. at 20-21, it has provided no evidence that its “brand” had
5 any value or that its brand recognition has in fact been harmed. In fact, according to HomeOpenly,
6 it appears REX’s reputational problems are likely caused by its own “misrepresent[ations]” and
7 “false” statements.
8 To compensate for these evidentiary gaps, REX has offered self-serving, conclusory
9 affidavits from its own employees, in which they speculate about potential harm to REX’s reputation
10 and potential customer confusion caused by Zillow’s website change. See ECF 7, Barrett Decl. ¶ 11
11 (co-listing on multiple listing services “calls into question REX’s technology-driven strategy”
12 without identifying any customer who has made or agrees with the statement); ECF 38, Maggio
13 Suppl. Decl. ¶¶ 5-6 (Zillow displays co-listings “negatively affects that customer’s overall
14 experience” and “creates confusion”); ECF 38, Rosenbaum Suppl. Decl. ¶¶ 4-5 (same); ECF 38,
15 Van Ham Suppl. Decl. ¶¶ 5-6 (same). Such self-interested speculation is not sufficient to show
16 irreparable injury. See, e.g., Am. Passage Media Corp. v. Cass Commc’ns, Inc., 750 F.2d 1470,
17 1473 (9th Cir. 1985) (discounting self-serving affidavits that were “conclusory and without
18 sufficient support in facts”); Kiva Health Brands LLC v. Kiva Brands Inc., 402 F. Supp. 3d 877, 896
19 (N.D. Cal. 2019) (“A conclusory and self-serving declaration by the head of a plaintiff’s company
20 is, standing alone, weak evidence of irreparable harm.”). What REX has done here amounts to no
21 more than “naming its injuries in a declaration,” which provides “no basis for the Court to find the
22 harm . . . would be irreparable.” Cloanto Corp., 2019 WL 1489185, at *3.
23 3. REX’s Economist Provides Nothing Useful on Irreparable Harm
24 The conclusions offered by REX’s economist, Dr. Robert Majure, that REX’s alleged
25 injuries are irreparable are irrelevant. See ECF 15, Majure Decl., Ex. A (“Majure Rpt.”) ¶¶ 63-68.
26 He simply declares that the alleged damage to REX is irreparable because “[i]n the real-estate
27 brokerage industry, reputation and track record are crucial factors in convincing sellers to list with
28 a brokerage.” Id. ¶ 63. But Dr. Majure is an economist, and areas such as marketing, advertising,
(206) 905-7000
1 and branding, are outside of his expertise. Moreover, his statements that such harm is irreparable,
2 without any explanation as to why the alleged harms identified by REX cannot be quantified, are
3 “opinion[s] on an ultimate issue of law” that “cannot be offered.” Allstate Ins. Co. v. Kia Motors
4 Am., Inc., No. 16-6108, 2017 WL 10311211, at *6 (C.D. Cal. Sept. 20, 2017) (excluding opinion on
5 “irreparable harm to Allstate” because “an expert witness cannot give an opinion as to her legal
6 conclusion”); Pom Wonderful LLC v. Pur Beverages LLC, No. 13-6917, 2015 WL 10433693, at *7
7 n.52 (C.D. Cal. Aug. 6, 2015) (“Torres’ opinion that Pom Wonderful will be ‘irreparably harmed’
8 in a way that ‘cannot be properly redressed by an eventual infringement damages award’ is ‘an
9 opinion on an ultimate issue of law’ that is not admissible under the Federal Rules of Evidence.”);
10 Wells Fargo & Co. v. ABD Ins. & Fin. Servs., Inc., No. 12-3856, 2014 WL 4312021, at *10 (N.D.
11 Cal. Aug. 28, 2014) (“To the extent that Ms. Holt attempts to opine on the ultimate issue of whether
12 Wells Fargo has suffered or is likely to suffer irreparable harm (such as her assertions that Wells
13 Fargo is suffering ‘irreversible’ harm and that any harm ‘cannot be fully remedied through monetary
14 damages’), the court finds those statements inadmissible.”). Dr. Majure’s irreparable harm opinions
15 should therefore be ignored.
16 Even if they were to be considered, Dr. Majure’s opinions do not establish REX faces
17 imminent, irreparable reputational harm. He assumes that REX cannot “effectively generate buyer
18 interest in its listings” because REX “has no way in the short term to replace” Zillow listings.
19 Majure Rpt. ¶¶ 55-56. But that assumption is contradicted by the fact that REX can still advertise
20 its listings everywhere it did before Zillow’s website change, and even on the blue tab on Zillow’s
21 website if REX co-lists with a member of a multiple listing service. See infra pp. 20-21, 23.
22 C. REX’s Claims Are Meritless
23 REX has not shown it is likely to succeed on the merits of its claims, or even raised serious
24 questions that go to the merits of its claims. Indeed, REX’s allegations suffer from material pleading
25 defects and its evidentiary showing undercuts key elements of its case.
26 1. REX Has Not Asserted a Valid Antitrust Claim
27 a. There Is No Unlawful Agreement
28 REX has not asserted a valid claim under Section 1 of the Sherman Act, which “requires that
(206) 905-7000
1 there be a contract, combination or conspiracy” between the defendants “in order to establish a
2 violation.” Monsanto Co. v. Spray-Rite Serv. Corp., 465 U.S. 752, 761 (1984) (cleaned up). To
3 establish such an agreement, the plaintiff must prove that the defendants had “a conscious
4 commitment to a common scheme designed to achieve an unlawful objective.” Id. at 768. “The
5 plaintiff’s burden is to produce evidence that is capable of sustaining a rational inference of
6 conspiracy and that tends to exclude the possibility that the defendant acted independently of the
7 alleged co-conspirators, and thus lawfully.” Wilcox v. First Interstate Bank of Or., N.A., 815 F.2d
8 522, 525 (9th Cir. 1987) (quotation marks omitted). There is no such evidence here.
9 REX’s argument is that NAR and Zillow conspired because Zillow joined multiple listing
10 services affiliated with NAR and is now bound to separately display homes listed on multiple listing
11 services and those from other sources. See ECF 5, Mot. 9-10 (“Zillow now is committed to
12 enforcing the IDX rules by segregating REX homes from cartel homes and burying REX homes in
13 a hidden ‘Other’ tab.”). As REX’s complaint acknowledges, however, Section 18.3.11 is an
14 optional policy, and it has not been adopted by all multiple listing services, whether they are
15 affiliated with NAR or not. See Compl. ¶ 85 (“The segregation rule appears in NAR’s IDX optional
16 model rules . . . .”), id. ¶ 158 (“Many, but not all multiple listing service organizations, have adopted
17 NAR’s ‘optional’ IDX rule, which prohibits the co-mingling in residential real estate search results
18 of listings from MLS-affiliated agents and other listings.”). And there is no evidence that NAR and
19 Zillow agreed that Zillow would follow Section 18.3.11 in all parts of the country, including the
20 parts of the country where the local multiple listing service has not adopted Section 18.3.11, or
21 where the local multiple listing service is not affiliated with NAR at all.
22 As Zillow explained in its last annual report filed with the SEC:
23 Each MLS . . . has adopted its own rules, policies, and agreement terms governing,
among other things, . . . how listings data must be displayed on our websites and
24 mobile applications. . . . MLS rules vary among markets and are in some cases
inconsistent between MLSs, such that we are required to customize our websites,
25 mobile applications, or services to accommodate differences between MLS rules.
. . . Complying with the rules and compliance requirements of each MLS requires
26 significant investment, including personnel, technology and development
resources, and the exercise of considerable judgment.
27
28
(206) 905-7000
1 Glass Decl., Ex. 37 at 16. Possible customizations to Zillow’s website would include display listings
2 data from multiple listing services and listings data from other sources together where permissible
3 under local MLS rules.
4 Zillow decided, however, for its own reasons, to have the same format in every market in
5 the country—including the markets where the multiple listing service allows commingling of
6 listings data from different sources. See Majure Rpt. ¶ 18. Zillow’s decision to separately display
7 all non-multiple listing service listings on its website in every market—including those where it is
8 not required to do so under local multiple listing service rules—is independent conduct that is not
9 unlawful. See Kinderstart.com LLC v. Google, Inc., No. C 06-2057 JF (RS), 2006 WL 3246596, at
10 *8 (N.D. Cal. July 13, 2006) (“Google removed Kinderstart from search results and lowered its
11 PageRank do not suffice to allege predatory conduct as opposed to legitimate competitive actions.
12 As a general matter there is no duty to aid competitors.” (cleaned up)). While it may have been
13 more convenient, efficient, or less costly for Zillow to implement a nationwide change to its website
14 instead of implementing a different display in each market, Zillow was not required to implement a
15 nationwide change as a part of any agreement with NAR or a NAR-affiliated multiple listing service.
16 And absent evidence of such an agreement, there is no evidence that “tends to exclude the possibility
17 that [Zillow] acted independently,” Wilcox, 815 F.2d at 525, and REX failed to establish a
18 fundamental element of its Section 1 claim.
19 b. There Is No Harm to Competition and Consumers
20 The antitrust laws only protect competition for the benefit of consumers; they do not protect
21 particular firms like REX. Am. Ad Mgmt., Inc. v. Gen. Tel. Co. of Cal., 190 F.3d 1051, 1055 (9th
22 Cir. 1999). Accordingly, every private plaintiff “must prove the existence of ‘antitrust injury,’”
23 Pool Water Prods. v. Olin Corp., 258 F.3d 1024, 1034 (9th Cir. 2001) (quoting Atl. Richfield Co. v.
24 USA Petroleum Co., 495 U.S. 328, 334 (1990) (“ARCO”)). “Antitrust injury does not arise . . . until
25 a private party is adversely affected by an anticompetitive aspect of the defendant’s conduct,”
26 ARCO, 495 U.S. at 339, “such as reduced output, increased prices, or decreased quality in the
27 relevant market,” Ohio v. Am. Express Co., 138 S. Ct. 2274, 2284 (2018). “The antitrust injury
28
(206) 905-7000
1 requirement ensures that a plaintiff can recover only if the loss stems from a competition-reducing
2 aspect or effect of the defendant’s behavior.” ARCO, 495 U.S. at 344.
3 REX Has Offered No Evidence of Harm to Competition. REX has not and cannot show
4 that Section 18.3.11 harms competition, because it is optional. Even with Section 18.3.11 in the
5 model NAR Handbook, local multiple listing services can require, prohibit, or take no action
6 regarding the commingling of listings data, and the plain language of Section 18.3.11 does not
7 require Zillow or anyone else to format their websites in a particular way. But even if Section
8 18.3.11 were required and forced Zillow to format its website in a particular way, REX still has not
9 shown that competition or consumers have been harmed by the actions taken by NAR. “[A]n act is
10 deemed anticompetitive under the Sherman Act only when it harms both allocative efficiency and
11 raises the prices of goods above competitive levels or diminishes their quality.” Rebel Oil Co. v.
12 Atl. Richfield Co., 51 F.3d 1421, 1433 (9th Cir. 1995). And REX has offered no evidence that
13 output, price, or product quality have been harmed by Section 18.3.11 or Zillow’s decision to display
14 REX listings on the white tab on its website.
15 To show harm to competition, REX simply and insufficiently concludes (1) it is better for
16 REX’s listings to be on the blue tab on Zillow’s website (instead of the white tab); and (2) REX’s
17 average commissions are lower than the average commissions charged by other real estate brokers.
18 See Majure Rpt. ¶¶ 28, 57, 58 & Ex. 8; Ryan Decl. ¶¶ 12-14. But, even assuming that being on the
19 blue tab is better and that REX’s average commissions are generally lower than other brokers, REX
20 has offered no evidence to show that consumers have in fact been harmed because of Section 18.3.11
21 or Zillow’s decision to publish REX listings on the white tab of its website.
22 First, REX’s claims that its average commissions are lower than commissions charged by
23 other real estate brokers and its listings have received less exposure after the change to Zillow’s
24 website, see Majure Rpt. ¶¶ 28, 57, 58 & Ex. 8; Ryan Decl. ¶¶ 12-14, do not show consumers have
25 paid higher prices. REX has offered no evidence to show that consumers have in fact paid higher
26 commissions because of Section 18.3.11 or Zillow’s decision to publish REX listings on the white
27 tab of its website.
28
(206) 905-7000
1 Second, REX claims consumer choice has been harmed by Zillow’s website design, but that
2 is wrong because REX admits that its brokerage services are still available in the market, on its own
3 website, on Zillow, and elsewhere. There is nothing stopping REX from selling its purported
4 “outside-the-box” approach to whoever wants it, and REX still has many channels available for
5 advertising its properties.
6 For example, REX’s listings are still available on Zillow. According to REX’s own
7 declarants:
8  On January 17, five days after Zillow changed its search results display, REX
agent Raphael Rio Reina wrote to a client, “The [Zillow] page is actually getting
9 quite a few views too, 471 views and 8 saves (which is great!).” ECF 12, Reina
Decl., Ex. B at 4-5.
10
 On January 21, REX agent Josephine Maggio wrote to a client, “Our team has
11 been checking all listings regularly to monitor activity based on [Zillow’s]
changes. We are still maintaining solid activity on Zillow—your home has over
12 3000 views.” ECF 9, Maggio Decl., Ex. A at 1.
13  REX agent Brandy Lawrence reports that, after Zillow changed its search
results display, she had a “client in California who was presented with an offer
14 from a buyer’s agent” because of a Zillow listing. ECF 6, Lawrence Decl. ¶ 11.
The client was apparently “confused to be receiving the offer directly,” id., but
15 the offer nonetheless demonstrates that REX was able to post its listing to
Zillow and a potential buyer found it.
16
17 REX’s listings are also available online in many other places. In an FAQ for Sellers on
18 REX’s own website, REX provides a video response to the question “If REX homes aren’t on the
19 MLS, how does REX market my home to potential buyers?” Alinne Allahverdian, REX’s Senior
20 Manager of Digital Marketing, explains:
21 At REX, remarketing your home means we serve multiple display ads of your
listing across thousands of sites to anyone who has looked at your home on our
22 website. For example, a user comes to REXhomes.com and looks at your home. . . .
Later that night, they might see an ad for your home on YouTube, while shopping
23 on their favorite site, or reading online news. The ad will remind them of the
showing. Whether or not a potential buyer has taken an action when looking at
24 your home on our website, we remarket your home to those same buyers, wherever
they are on the internet. . . .
25
In addition to retargeting, we advertise your home to potential buyers who are ready
26 to purchase homes in your area across thousands of online channels. We do this
by using segmented audience targeting and REX data technology. Both
27 remarketing and in-market audience targeting are incredibly valuable ways to make
sure your home is seen by the most number of interested shoppers.
28
(206) 905-7000
1 Glass Decl., Ex. 38. REX’s other marketing materials confirm that REX markets properties in other
2 channels outside of Zillow, including its own website. Glass Decl., Ex. 39 (“REX actively markets
3 homes to qualified buyers on their own site, on search engines like Google and Bing, popular
4 social media platforms like Facebook and Instagram, as well as big sites such as Zillow and
5 Trulia.” (emphasis added)). These other alternatives—in addition to Zillow—remain available to
6 REX for advertising its listings today.
7 Many of REX’s listings are even available on multiple listing services, through “co-listings”
8 with multiple listing service members. See ECF 5, Mot. at 19 (“[I]n just the last few weeks, REX’s
9 agents have been increasingly forced to co-list properties to the MLS . . . .”). Multiple listing
10 services in turn syndicate those listings to Zillow (the most visited real estate website in the United
11 States, Majure Rpt. ¶ 22), realtor.com (the second-most visited website, id. ¶ 23), and Redfin.com
12 (the third-most visited website, id.), among others. For example, one of REX’s current listings in
13 Seattle is advertised on all of those platforms. Glass Decl., Exs. 40-43. While REX now complains
14 that it was “forced” to co-list properties with members of multiple listing services as a result of
15 Zillow’s website change, ECF 5, Mot. at 19, before the change, REX would voluntarily co-list in a
16 multiple listing service “after a property had not sold after 60-90 days and website traffic seemed
17 stagnant,” ECF 13, Rosenbaum Decl. ¶ 13; see also ECF 6, Lawrence Decl. ¶ 9. While REX may
18 prefer to get the benefits of a multiple listing service without paying for it, either by joining the
19 multiple listing service or by sharing its commission in a co-listing arrangement, that is not an
20 antitrust concern.
21 Third, REX argues “innovation will suffer” as a result of co-listings, but REX has not offered
22 any evidence that suggests co-listing properties on multiple listing services harms consumers in any
23 way. Contrary to what REX claims, there is no requirement under NAR’s rules that a seller must
24 pay “sky-high” commissions to buyer’s agents when a property is listed on a multiple listing service.
25 The required offer of compensation to a buyer’s agent made through a multiple listing service
26 affiliated with NAR can be as low as $0.01. Galicia Decl. ¶ 18. Nothing obligates a listing broker
27 to offer more.
28
(206) 905-7000
1 There also is nothing about co-listings or offering compensation to cooperating buyer
2 brokers that requires REX to compromise on its “innovative” business model in any way. While
3 REX claims the “very reason many of [its] clients signed with REX was because they sought to
4 avoid high commissions to buyer’s agent,” ECF 5, Mot. at 19, the payment of commission to buyer’s
5 agents has long been part of REX’s business. Even before Zillow’s website change, REX’s clients
6 had to pay commission to a buyer’s agent whenever the buyer refused to pay her agent out of her
7 own pocket. See ECF 7, Barrett Decl. ¶ 9 (“REX leaves the decision about a buyer-agent
8 commission to the buyer and the buyer’s agent.”). Indeed, in a New York Times piece published in
9 February 2021, REX expressly acknowledged its clients pay buyer-agent commissions. See Glass
10 Decl., Ex. 44 at 4. As explained by a real estate firm that is cited throughout Dr. Majure’s Report,
11 this hidden aspect of REX’s business model means “REX’s advertising is misleading” because REX
12 “entices sellers with promises of huge savings without fully or accurately explaining the many risks
13 inherent to its pricing model and overall approach.” See Glass Decl., Ex. 45 at 3.
14 REX’s Economist Simply Assumes There Has Been Harm to Competition. Dr. Majure
15 prepared bar charts that show the number of “views” of REX properties on Zillow declined after
16 Zillow changed its website, Majure Rpt. ¶¶ 47-48, and that the number of REX co-listings on
17 multiple listing services increased after Zillow changed its website, id. ¶ 54; ECF 38, Majure Suppl.
18 ¶ 4. Then he concluded—without performing any actual economic analysis, such as a regression—
19 that a decline in Zillow views and uptick in co-listings proves that “[t]he agreement between NAR
20 and Zillow has converted Zillow and Trulia . . . into tools for limiting REX’s innovative business
21 model and its competitive pressure on NAR members.” Majure Rpt. ¶ 55.
22 That is not reliable expert work. Dr. Majure makes no effort to control for the potentially
23 lower sales price a homeowner would get by using REX, which could easily outweigh any savings
24 on commissions. He made no effort to apply generally accepted economic principles (or even
25 citations to economic literature) to explain what harm a reduced number of Zillow views or
26 increased number of co-listings has in fact limited REX’s “innovative” model or harmed consumers.
27 For example, he does not explain why, even if true, harm to REX amounts to harm to consumers.
28 See McGlinchy v. Shell Chemical Co., 845 F.2d 802, 812-13 (9th Cir. 1988) (even “[t]he elimination
(206) 905-7000
1 of a single competitor, without more, does not prove anticompetitive effect”). And he makes no
2 effort to explain why any harm to REX is not offset by the benefits consumers obtain through the
3 data that is aggregated and syndicated by multiple listing services, as is required in any Section 1
4 case under the rule of reason. See Paladin Assocs., Inc. v. Montana Power Co., 328 F.3d 1145,
5 1156 (9th Cir. 2003) (“The rule of reason weighs legitimate justifications for a restraint against any
6 anticompetitive effects” and the Court must “determine whether the anticompetitive aspects of the
7 challenged practice outweigh its procompetitive effects.”). Dr. Majure’s work is pure ipse dixit, and
8 his work can be disregarded by the Court. Gen. Elec. Co. v. Joiner, 522 U.S. 136, 146 (1997)
9 (holding that the district court was not required “to admit opinion evidence that is connected to
10 existing data only by the ipse dixit of the expert”).
11 c. There Is No Boycott
12 Even if REX could prove that NAR and Zillow acted in concert, REX cannot succeed on the
13 remaining elements of its alleged per se claim. ECF 5, Mot. at 8-14. A “mere allegation of a
14 concerted refusal to deal” is not enough. Nw. Wholesale Stationers, Inc. v. Pac. Stationery &
15 Printing Co., 472 U.S. 284, 298 (1985). Rather, REX must show that “the boycott cuts off access
16 to a supply, facility, or market necessary to enable the victim firm to compete,” among other factors.
17 Hahn v. Or. Physicians’ Serv., 868 F.2d 1022, 1030 (9th Cir. 1988). But REX has not been cut off
18 from anything.
19 REX’s properties are still widely available—including on Zillow’s website. See, e.g., ECF
20 13, Rosenbaum Decl. ¶ 11 (explaining that, since Zillow’s changes, REX “continue[s] to rely on
21 Zillow for our listings”). In support of its motion, REX submitted bar graphs that chart the page
22 views for specific listings that REX was advertising on Zillow after the website change. See ECF
23 9, Maggio Decl., Ex. B; ECF 12, Reina Decl., Exs. A & C. Those charts confirm REX’s listings
24 continued to be advertised on Zillow’s website and viewed by consumers, even after Zillow changed
25 its website. See ECF 9, Maggio Decl., Ex. B; ECF 12, Reina Decl., Exs. A & C. Even after the
26 change to Zillow’s website, REX’s agents have continued to tell their clients that potential buyers
27 are seeing their properties on Zillow. ECF 12, Reina Decl., Ex. B at 4-5. (“The [Zillow] page is
28 actually getting quite a few views too, 471 views and 8 saves (which is great!).”); ECF 9, Maggio
(206) 905-7000
1 Decl., Ex. A at 1 (“We are still maintaining solid activity on Zillow—your home has over 3000
2 views.”). And, of course, REX is advertising its listings on its own website and “across online
3 channels such as Google, Facebook, Instagram, Waze, and thousands of partner sites.” ECF 9,
4 Maggio Decl., Ex. A at 1; see also Glass Decl., Ex. 39.
5 REX’s ongoing participation in the relevant market means it has not been “cut off” from that
6 market as a matter of law. See Surf City Steel, Inc. v. Int’l Longshore & Warehouse Union, No. 14-
7 05604, 2017 WL 5973279, at *5 (C.D. Cal. Mar. 7, 2017) (dismissing complaint in part because
8 “Plaintiffs . . . do not allege that [defendants’ agreement] prevents them from competing for all
9 relevant work” and instead “indicate[] that [they] can compete in the market”), aff’d, 780 F. App’x
10 467 (9th Cir. 2019). Therefore, REX’s claim that it has been “cut off” because access to Zillow is
11 “necessary to compete” and “the internet is now the most popular way for consumers to begin their
12 search for a new home,” ECF 5, Mot. at 10-11, is a non sequitur. Neither Optional Section 18.3.11
13 of NAR’s Model IDX Policies nor the change to Zillow’s website “cuts off” REX’s access to the
14 internet, or anything else for that matter.
15 2. REX Has No Valid False Advertising Claims Against NAR
16 REX’s Lanham Act and Washington Consumer Protection Act claims are based on the same
17 conduct: Zillow’s decision to (1) label REX listings as “Other Listings” instead of “Agent Listings”
18 and (2) group REX listings “alongside foreclosures, construction projects, and FSBOs” on the
19 “Other Listings” tab. ECF 5, Mot. at 7. None of that alleged conduct implicates NAR. REX does
20 not even allege NAR had any role in designating REX listings on Zillow as “Other Listings” or that
21 NAR had any input on how to label non-multiple listing service listings on Zillow’s website. See,
22 e.g., Compl. ¶ 98 (alleging that “Zillow now categorizes MLS listings as ‘Agent Listings’ and all
23 non-MLS listings as ‘Other Listings,’” and referring to this labeling as a “Zillow-implemented
24 categorization and display”); ¶ 128 (“Namely, Zillow labels as ‘Agent listings’ only homes that are
25 listed by members of the NAR or MLS. Zillow labels homes listed by REX agents as ‘Other
26 listings.’”). Nor does it proffer any evidence that NAR had any role in those decisions. That is
27 because NAR had no input into the redesign of Zillow’s website. Galicia Decl. ¶ 17.
28
(206) 905-7000
1 Far from showing a likelihood of success, the allegations supporting REX’s advertising
2 claims against NAR do not even come close to passing muster under Twombly. See Corazon v.
3 Aurora Loan Servs., LLC, No. 11-00542 SC, 2011 WL 1740099, at *4 (N.D. Cal. May 5, 2011)
4 (“Undifferentiated pleading against multiple defendants is improper.”).
5 D. The Balance of Hardships and the Public Interest Weigh Against an Injunction
6 “A plaintiff seeking a preliminary injunction must establish . . . that the balance of equities
7 tips in his favor, and that an injunction is in the public interest.” Winter, 555 U.S. at 20. “In
8 assessing whether the plaintiffs have met this burden, the district court has a duty to balance the
9 interests of all parties and weigh the damage to each.” Stormans, Inc. v. Selecky, 586 F.3d 1109,
10 1138 (9th Cir. 2009) (cleaned up).
11 REX has failed to make this required showing. REX presents no reason the public would
12 have any interest in helping REX listings to appear on Zillow’s website in the way REX wants. And
13 for the reasons described supra Section III(B), its speculative and de minimus three “lost customers,”
14 “unhappy clients,” and “unknown loss of business,” see ECF 5, Mot. at 20-21, are not harms to the
15 public generally. On the other hand, the proposed injunction would require immediate changes to
16 Zillow’s website and NAR’s longstanding rules. If REX had its way, NAR would be forced to adopt
17 new, mandatory rules that would apply with immediate effect to its 1.4 million members and nearly
18 700 multiple listing services that are run by NAR-affiliated associations of REALTORS®, thereby
19 imposing significant burdens on NAR, multiple listing services affiliated with NAR, and their
20 members. Galicia Decl. ¶ 21. The balance of hardships and the public interest therefore weigh
21 against issuing an injunction.
22 CONCLUSION
23 NAR respectfully requests that the Court deny REX’s motion for a preliminary injunction.
24
25
26
27
28
(206) 905-7000
1 DATED April 30, 2021
2 QUINN EMANUEL URQUHART & SULLIVAN, LLP
3
__/s/ Thomas C. Rubin
4 Thomas C. Rubin, WSBA #33829
5 Seattle, WA 98101
Phone (206) 905-7000
6 Fax (206) 905-7100
tomrubin@quinnemanuel.com
7
Ethan Glass (pro hac vice)
8 Michael D. Bonanno (pro hac vice)
1300 I Street, Suite 900
9 Washington, D.C. 20005
10 Tel: 202.538.8000
Fax: 202.538.8100
11 ethanglass@quinnemanuel.com
mikebonanno@quinnemanuel.com
12
Attorneys for Defendant National Association of
13
REALTORS®
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
(206) 905-7000
1 CERTIFICATE OF SERVICE
2 I hereby certify that on April 30, 2021, I caused a true and correct copy of the foregoing to
3 be filed in this Court’s CM/ECF system, which will send notification of such filing to counsel of
4 record.
5 DATED: April 30, 2021.
7
/s/ Thomas C. Rubin
8 Thomas C. Rubin, WSBA #33829
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
(206) 905-7000

2021-04-30 Defendant The National Assoc. of REALTORS (DCKT 64 - 0)

Uploaded by

Copyright:

Available Formats

You might also like

2021-04-30 Defendant The National Assoc. of REALTORS (DCKT 64 - 0)

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

2021-04-30 Defendant The National Assoc. of REALTORS (DCKT 64 - 0)

Uploaded by

Copyright:

Available Formats

Case 2:21-cv-00312-TSZ Document 64 Filed 04/30/21 Page 1 of 31

1 THE HONORABLE THOMAS S. ZILLY

9 UNITED STATES DISTRICT COURT

11 REX – REAL ESTATE EXCHANGE, INC.,

12 Plaintiff, Case No. 2:21-cv-00312-TSZ

9 D. REX Is a Real Estate Brokerage That Advertises Its Properties on Zillow

12 III. ARGUMENT .........................................................................................................................9

13 A. REX Ignores the Controlling Preliminary Injunction Standards ...............................9

14 1. REX Ignores Winter’s Four-Part Test ............................................................9

15 2. REX Also Ignores the Heightened Standard for Mandatory

1 Lydo Enterps., Inc. v. City of Las Vegas,

4 McGlinchy v. Shell Chemical Co.,

7 Monsanto Co. v. Spray-Rite Serv. Corp.,

10 Oakland Tribune, Inc. v. Chronicle Pub. Co., Inc.,

13 Paladin Assocs., Inc. v. Montana Power Co.,

16 Pool Water Prods. v. Olin Corp.,

25 Top Agent Network, Inc. v. Nat’l Ass’n of Realtors,

1 Valeo Intellectual Prop., Inc. v. Data Depth Corp.,

4 Wilcox v. First Interstate Bank of Or., N.A.,

12 issue the sweeping, mandatory injunction that REX has requested.

17 urgent need for preliminary injunctive relief in this case.

2 forced Zillow to change its website design.

12 against NAR are meritless.

13 First, there is no evidence of an agreement between NAR and Zillow, which is a

24 Section 1 of the Sherman Act.

16 no evidence to the contrary.

3 II. FACTUAL BACKGROUND

13 transaction costs for consumers. See Glass Decl., Ex. 1 at 12.

15 permitted to call themselves REALTORS®. Galicia Decl. ¶ 2. NAR publishes a Handbook on

18 categories of model policies: mandatory, optional, recommended, and informational. Id. ¶ 6.

22 recommended, or informational rules. Id.

12 Policy expressly permits commingling of listings:

8 contained the following version of the Policy at issue in this case:

9 MLSs cannot prohibit Participants from downloading and displaying or framing

15 An MLS may not prohibit Participants from downloading and displaying or

21 took effect after the 2008 consent decree—Section 18.3.11 stated:

22 MLSs cannot prohibit participants from downloading and displaying or framing

28 Paragraph IV.C.3 of the 2008 consent decree.

7 in many other places on the internet, infra pp. 20, 23.

19 to claim that it has a found a way to replace an outdated MLS.” Id. at 5.

11 between agent listings and other listings.” Id.

5 A. REX Ignores the Controlling Preliminary Injunction Standards

6 1. REX Ignores Winter’s Four-Part Test

7 To obtain a preliminary injunction, a plaintiff must “establish that he is likely to succeed on

5 standard was established by the Supreme Court in Winter.

24 States under the Antitrust Procedures and Penalties Act).

26 for a preliminary injunction could be denied for that reason alone.

27 2. REX Also Ignores the Heightened Standard for Mandatory Injunctions

13 meet that heavy burden.

14 B. REX Does Not Face Any Danger of Irreparable Injury

15 1. REX’s Delay Shows It Will Not Be Irreparably Harmed

25 to be consistent local multiple listing service policies:

1 Decl. ¶ 6 (“In the fall of 2020, we began hearing that

21 2. REX’s Alleged Injuries Are Not Irreparable

22 harm . . . would be irreparable.” Cloanto Corp., 2019 WL 1489185, at *3.

23 3. REX’s Economist Provides Nothing Useful on Irreparable Harm

15 should therefore be ignored.

22 C. REX’s Claims Are Meritless