Judge Quashes REX Retrial Request In Long-Simmering Feud With Zillow

Key Takeaways:

– Federal Judge Thomas S. Zilly declined REX’s motion for a retrial in its battle with Zillow over alleged antitrust activity regarding its IDX policies.
– REX filed a motion for a new trial after a jury determined that Zillow did not break false advertising laws.
– The new motion focused on Zillow’s alleged violation of Washington’s Consumer Protection Act, but the judge found that it lacked merit.
– REX claimed that the jury instructions were improperly worded and misled jurors, but the judge disagreed.
– REX also argued that it was prevented from presenting certain testimony and had limited rebuttal time, but the judge found that these claims were unsubstantiated.
– The judge stated that REX had ample opportunities to present its case and that it was well-represented by multiple attorneys.
– Zillow is pleased with the judge’s decision and remains focused on helping customers find homes.

inman:

Federal Judge Thomas S. Zilly declined REX’s motion for a retrial on Thursday. The company had been a years-long battle with Zillow over alleged antitrust activity regarding its IDX policies.

The verdict is in — the old way of doing business is over. Join us at Inman Connect New York Jan. 23-25, when together we’ll conquer today’s market challenges and prepare for tomorrow’s opportunities. Defy the market and bet big on your future.

The Real Estate Exchange’s Hail Mary plan has failed.

The platform — better known as REX — filed a motion for a new trial in September after a jury determined the company failed to prove that Zillow broke false advertising laws when it began separating non-MLS listings from MLS listings on its site. The court also dismissed all antitrust allegations, which included the National Association of Realtors for its No-Commingling and Buyer-Broker Commission rules.

The new motion dropped the false advertising claims and instead focused on Zillow’s alleged violation of Washington’s Consumer Protection Act. REX’s counsel said the jury was misled in the “reasonableness” of Zillow’s decision to separate non-MLS and MLS listings, and claimed the court prevented testimony about commission models in other countries and limited REX’s rebuttal.

However, U.S. District Judge Thomas S. Zilly said the motion lacked merit and that REX’s counsel didn’t seize several opportunities throughout the trial to provide “the alternative or additional verbiage along the lines that it now argues was error not to include” in regards to Zillow’s IDX policies.

Judge Thomas Zilly

“Having reviewed all papers filed in support of, and in opposition to, REX’s motion for a new trial as to its CPA claim, the Court denies REX’s motion for the reasons set forth in this Order,” Zilly said in the order filed on Thursday.

In the order, Zilly said REX proved Zillow’s policy to separate non-MLS and MLS listings caused injury to its business; however, the jury found that Zillow’s actions were “reasonable in relation to the development and preservation of its business.”

REX said the Court’s jury instructions, which are a set of legal guidelines given by a judge to a jury after closing arguments to use for deliberation, were improperly worded and ultimately misled jurors to rule in favor of Zillow.

Zilly said Washington law requires judges to provide instruction when reasonableness is raised as a defense to a CPA claim, and REX’s counsel didn’t use the opportunity to strike Zillow’s defense, which had been clearly outlined in the Pretrial Order. Furthermore, Zilly said the wording for the instruction was pulled directly from the Washington Pattern Instruction.

“The Court properly informed the jury that Zillow was required to ‘prove by a preponderance of the evidence that [its] act or practice was reasonable in relation to the development and preservation of its business,’” the motion read. “REX does not identify any error in the Court’s explanation of the law, but rather contends the Court should have instructed about the ultimate factual issue that the jury needed to decide… Such instruction would have improperly commented on the evidence.”

The judge also noted REX had “three rounds of written objections and an almost-hour-long hearing” to provide any additional or alternative wording for the jury instructions. Zilly also said REX had access to a draft of what would be provided to jurors, but they failed to specify what was allegedly wrong with the instructions.

“Even now, in its motion for a new trial, REX fails to outline the exact contours of an instruction that it contends would have been appropriate to give,” the motion read. “REX cannot establish error, let alone prejudicial error justifying a new trial, when it does not set forth with any particularity the jury charge that it contends the Court should have provided.”

As for the claims about preventing testimony about commission models in other countries and limited rebuttal time, Zilly said REX  failed to explain how foreign commission models connected to Zillow’s defense and would’ve ultimately led to “jury confusion and inefficiency.

The judge also said REX co-founders Lynley Sides and Jack Ryan both offered rebuttal testimony; however, their counsel failed to ask questions that would “undermine Zillow’s reasonableness defense.”

“REX was ably represented, both before and during trial, by multiple attorneys from well-regarded law firms, including a distinguished named partner and a former federal judge,” Zilly wrote. “REX had more than sufficient resources to pursue this litigation, and was given ample opportunities to file motions and other briefs, offer objections to and propose alternative jury instructions, present testimony and other evidence, and argue the merits of its case to the jury.”

Zillow Corporate Communications Manager Will Lemke told Inman the company is “pleased with the judge’s decision.”

“As we move forward, we remain focused on what matters most: helping customers who come to Zillow get into their next home,” he said in an emailed statement.

REX has yet to respond to Inman’s request for comment.

Read the full motion below:

Email Marian McPherson


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Property Chomp's Take:

In a major blow to real estate platform REX, Federal Judge Thomas S. Zilly has declined the company's motion for a retrial. REX had been engaged in a lengthy legal battle with Zillow over allegations of antitrust activity related to its IDX policies. Despite REX's efforts to prove that Zillow had violated false advertising laws, the jury ruled in favor of Zillow, dismissing all antitrust allegations. REX then filed a new motion, focusing on Zillow's alleged violation of Washington's Consumer Protection Act. However, Judge Zilly rejected the motion, stating that it lacked merit and that REX's counsel failed to provide sufficient evidence to support their claims.

According to Judge Zilly, REX had multiple opportunities during the trial to present additional arguments and evidence, but failed to do so. He also noted that REX had ample resources and legal representation to pursue the case, and that their claims about jury instructions and limited rebuttal time were unfounded.

Zillow Corporate Communications Manager Will Lemke expressed the company's satisfaction with the judge's decision, stating that Zillow remains focused on helping customers find their next home.

REX has not yet responded to requests for comment on the ruling.

This ruling is a significant setback for REX and serves as a reminder that the real estate industry is changing rapidly. Traditional methods of doing business are no longer effective, and companies must adapt to new market challenges and opportunities. The outcome of this case underscores the importance of innovation and staying ahead of the curve in an increasingly competitive industry.

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