Ninth Circuit Upholds Ruling Against REX in Zillow Antitrust Case

In a legal win for Zillow and the National Association of Realtors (NAR), the Ninth Circuit Court of Appeals has upheld a U.S. District Court ruling against Real Estate Exchange (REX). The decision, announced on March 3, reaffirms that REX failed to prove its claims regarding deceptive practices related to Zillow’s display of non-MLS listings.

According to Bloomberg, the case stemmed from REX’s 2021 lawsuit against Zillow, in which the brokerage alleged that changes to Zillow’s website unfairly diminished traffic to its non-MLS listings. REX argued that NAR’s “no-commingling” rule—requiring MLS listings to be displayed separately from non-MLS listings—was anticompetitive. The brokerage contended that its listings were relegated to a secondary search results tab, hurting its business.

The Ninth Circuit, however, sided with the lower court’s decision, stating that the no-commingling rule did not amount to a coordinated effort by multiple decision-makers to stifle competition. As per Bloomberg, the court noted that individual MLSs had the choice of whether to implement the rule, with nearly a third opting not to—a key factor in determining its non-mandatory nature.

Read more: DOJ Urges Reconsideration in REX vs. Zillow Antitrust Case Over NAR Rules

Furthermore, the appeals court found that Zillow independently chose to redesign its website to comply with the rule. The ruling emphasized that REX failed to present evidence that NAR had any role in Zillow’s decision, undermining the brokerage’s claims of antitrust violations. As a result, the court concluded that the district court had acted appropriately in instructing the jury on Zillow’s business practices, rejecting REX’s request for a new trial.

Following the ruling, NAR reaffirmed its long-standing position that the no-commingling rule does not violate antitrust laws. “The rule is optional, leaving MLSs the choice whether to adopt it, and, in fact, 29% chose not to. We are pleased to put this meritless lawsuit behind us and maintain our focus on delivering value for our membership,” the association stated.

Zillow echoed this sentiment, asserting its commitment to transparency in real estate. “We’re pleased with the Ninth Circuit having affirmed what we’ve said all along—REX’s claims have been without merit since the start of this matter,” the company said.

The legal battle dates back to January 2021, when Zillow adjusted its search functionality to separate MLS and non-MLS listings, a move REX claimed was an unreasonable restraint of trade. After a Seattle jury ruled against REX in September 2023, the brokerage sought a new trial, but U.S. District Court Judge Thomas Zilly denied the request in January 2024.

The case also attracted the attention of the U.S. Department of Justice (DOJ), which argued during the appeals process that the district court had not fully explored certain antitrust theories. Despite the DOJ’s position, the Ninth Circuit did not directly address its concerns and instead concluded that REX had not presented sufficient evidence of coordinated action against its business.

Source: Bloomberg