REX appeals latest court ruling in its ongoing battle with Zillow

REX Real Estate is back again trying to get a new trial in its false advertising lawsuit against Zillow. On Monday, the now defunct discount brokerage filed an appeal with the U.S. Court of Appeals for the Ninth Circuit, asking the appeals court to reverse the lower court’s ruling on REX’s motion for a new trial.

REX filed its motion for a new trial in November, roughly six weeks after its September trial concluded. During the trial, a Seattle jury found that REX did not prove Zillow used false advertising it its decision to put non-MLS listings on a different section of the website and that Zillow proved its defense on REX’s second claim that Zillow acted deceptively and unfairly.

In its request for a new trial, REX argued that it was unfairly prevented from presenting testimony about agent commissions to the jury. Judge Thomas Zilly, who oversaw the trial, ruled that the jury verdict was not the result of a “procedural flaw” or an “error on the part of the court,” but REX’s shortcoming in presenting evidence that convinced the jury it had been harmed. Due to this, Zilly ruled in January that REX would not be granted a new trial.

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 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.

“REX’s claims have been without merit since the start of this matter, and a jury has already agreed,” Will Lemke, Zillow’s corporate communications manager, wrote in an email. “As we move forward, we are focusing on what matters most: helping empower our customers in real estate.”