STATEMENT OF INTEREST ON BEHALF OF
THE UNITED STATES OF AMERICA - 2:21-cv-00312-TSZ - 1
UNITED STATES ATTORNEY
700 STEWART STREET, SUITE 5220
SEATTLE, WASHINGTON 98101
(206) 553-7970
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Case 2:21-cv-00312-TSZ Document 95 Filed 08/10/21 Page 1 of 8
The Honorable Thomas S. Zilly
UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF WASHINGTON
AT SEATTLE
REX – REAL ESTATE EXCHANGE, INC., a
Delaware corporation,
Plaintiff,
v.
ZILLOW INC., a Washington corporation;
ZILLOW GROUP, INC., a Washington
corporation; ZILLOW HOMES, INC., a Delaware
corporation; ZILLOW LISTING SERVICES, INC.,
a Washington corporation; TRULIA, LLC, a
Delaware limited liability company; and THE
NATIONAL ASSOCIATION OF REALTORS, an
Illinois trade association,
Defendants.
CASE NO. 2:21-cv-00312-TSZ
STATEMENT OF INTEREST ON
BEHALF OF THE UNITED
STATES OF AMERICA
INTEREST OF THE UNITED STATES
The United States respectfully submits this statement pursuant to 28 U.S.C. § 517, which
permits the Attorney General to direct any officer of the Department of Justice to attend to the
interests of the United States in any case pending in a federal court. The United States is
STATEMENT OF INTEREST ON BEHALF OF
THE UNITED STATES OF AMERICA - 2:21-cv-00312-TSZ - 2
UNITED STATES ATTORNEY
700 STEWART STREET, SUITE 5220
SEATTLE, WASHINGTON 98101
(206) 553-7970
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principally responsible for enforcing the federal antitrust laws, United States v. Borden Co., 347
U.S. 514, 518 (1954); see 15 U.S.C. §§ 4, 25, and has a strong interest in their correct
application. We submit this statement to prevent the drawing of unwarranted inferences from a
now-expired 2008 consent decree between the United States and defendant The National
Association of Realtors (NAR). The United States takes no position on any other issue in the
case.
STATEMENT
1. During the early 2000s, the United States investigated and resolved an antitrust
case involving NAR rules that allegedly thwarted the utility and growth of Internet websites
operated by real estate brokers who sought to compete by providing online services to sellers or
buyers of residential real property. Doc. 85-3, United States v. NAR Complaint ¶¶ 1-7. The
United States sought to protect innovation and competition by ensuring that multiple-listing
services (MLS) would treat brokers employing Internet websites in the same way that the MLSs
treated brokers who provide services through traditional “brick-and-mortar” business models.
Id. ¶ 2.
Specifically, in 2003 NAR adopted a policy relating to “virtual office websites” (VOWs)
that allowed brokers to opt out of having their MLS listings displayed on the VOW sites of
competing brokers and prohibited VOWs from engaging in certain conduct. Id. ¶ 3. The United
States investigated NAR’s VOW policy and sued NAR in 2005. The United States and NAR
settled the case and agreed to the 2008 consent decree. The decree prohibited NAR from
adopting or enforcing any rule or practice that prohibited a broker from using a VOW or from
impeding a broker’s ability to operate a VOW. Doc. 85-4, Final Judgment 5-6.
Case 2:21-cv-00312-TSZ Document 95 Filed 08/10/21 Page 2 of 8
STATEMENT OF INTEREST ON BEHALF OF
THE UNITED STATES OF AMERICA - 2:21-cv-00312-TSZ - 3
UNITED STATES ATTORNEY
700 STEWART STREET, SUITE 5220
SEATTLE, WASHINGTON 98101
(206) 553-7970
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2. Plaintiff REX challenges the Zillow defendants’ implementation of a NAR rule
providing:
Listings obtained through IDX feeds from Realtor® Association MLSs where
the MLS participant holds participatory rights must be displayed separately
from 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 which each such listing was obtained.
Doc. 1, Complaint ¶ 85. The Court has referred to this as the No-Commingling Rule. REX
alleges that Zillow and NAR’s concerted action to “make non-MLS listings accessible only via a
recessed, obscured, and deceptive tab that consumers do not see, and even professional real
estate agents find deceiving,” id. ¶ 8, violates, among other things, Section 1 of the Sherman Act,
15 U.S.C. § 1.
3. REX moved for a preliminary injunction. NAR, in opposition to REX’s motion,
cited a NAR policy, supposedly similar to the No-Commingling Rule, that appears in an
attachment to the 2008 consent decree:
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 participating in that MLS, etc., but may require either that (i)
such information be searched separately from listings obtained from
other sources, including other MLSs.
Doc. 84, NAR Mot. To Dismiss 3-4 (NAR’s emphasis). The Court, in its Order denying REX’s
motion, also referenced the 2008 consent decree:
In addition, the Court notes that a 2008 consent decree expressly permits
NAR to adopt a policy that its affiliated MLSs may require that their
listings “be searched separately from listings obtained from other sources,
including other MLSs.” Ex. A to Consent Decree at § IV(3), Ex. 27 to
Glass Decl. (docket no. 66-27).
Doc. 80, Order 13 (footnote omitted).
Case 2:21-cv-00312-TSZ Document 95 Filed 08/10/21 Page 3 of 8
STATEMENT OF INTEREST ON BEHALF OF
THE UNITED STATES OF AMERICA - 2:21-cv-00312-TSZ - 4
UNITED STATES ATTORNEY
700 STEWART STREET, SUITE 5220
SEATTLE, WASHINGTON 98101
(206) 553-7970
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The Zillow defendants and NAR now have moved to dismiss the Complaint, and NAR
again has cited the 2008 consent decree and moved the Court to take judicial notice of it.
ARGUMENT
By claiming that the government “approved” the search policy in the attachment to the
2008 consent decree, see Doc. 93, NAR Reply in Support of Mot. To Dismiss 7-8, NAR implies
that the government has determined that the policy—and by extension the No-Commingling
Rule—is consistent with the antitrust laws. That implication, however, is incorrect.
1
The 2008
consent decree resolved the United States’ antitrust claims against NAR for specific exclusionary
policies targeting brokers using innovative online platforms. In that case, the United States did
not examine the rest of NAR’s policies, including the No-Commingling Rule, and therefore
those policies simply were not subjected to antitrust scrutiny. See
https://www.justice.gov/atr/case-document/file/505761/download, at 35 (agreeing that “[NAR’s]
IDX Policy was NOT the subject of the DOJ’s pre-complaint investigation, complaint, amended
complaint or discovery” and “the United States takes no position as to the permissibility under
the antitrust laws of NAR’s IDX Policy”). Contrary to NAR’s argument, therefore, those other
policies, including the supposedly similar search policy that appears in an attachment to the 2008
consent decree as part of NAR’s IDX Policy, were in no sense analyzed and found consistent
with antitrust laws.
1
The inference of lawfulness that NAR would draw is also procedurally improper. Even
assuming that the Court could take judicial notice of the 2008 consent decree, the Court cannot
draw inferences from it that are disputed by REX. Doc. 91; cf. Lee v. City of Los Angeles, 250
F.3d 688, 690 (9th Cir. 2001) (“On a Rule 12(b)(6) motion to dismiss, when a court takes
judicial notice of another court’s opinion, it may do so not for the truth of the facts recited
therein, but for the existence of the opinion, which is not subject to reasonable dispute over its
authenticity.”) (internal quotation marks and citation omitted).
Case 2:21-cv-00312-TSZ Document 95 Filed 08/10/21 Page 4 of 8
STATEMENT OF INTEREST ON BEHALF OF
THE UNITED STATES OF AMERICA - 2:21-cv-00312-TSZ - 5
UNITED STATES ATTORNEY
700 STEWART STREET, SUITE 5220
SEATTLE, WASHINGTON 98101
(206) 553-7970
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As explained above, the government case that resulted in the 2008 consent decree
challenged a NAR rule of broad application that allowed traditional real estate brokers to “opt
out” of providing their sellers’ MLS listings to internet-based agencies. The alleged purpose and
anti-competitive effect of NAR’s policy was to “impose greater restrictions and limitations on
brokers with Internet-based business models than on traditional brokers.” Doc. 85-3 ¶ 35. The
conduct challenged here by REX—alleged “display bias” by one particular aggregator of
residential real estate listings, Zillow, caused by segregating search results (MLS listings from
non-MLS listings) in a particular way—is different from the conduct challenged in the
government’s 2005 case. The government did not there challenge either the No-Commingling
Rule or the supposedly similar search policy cited by NAR.
The government “approved” the search policy cited by NAR only to the extent of
permitting it as part of the Modified VOW Policy required by the 2008 consent decree. The
policy appears in a lengthy attachment that revised NAR’s policies to comply with the decree’s
injunctions. The 2008 decree did not affirmatively determine the policy challenged in this case
(or any other NAR policies noted in the attachment to the decree) to be pro-competitive or
lawful.
A consent decree that does not expressly prohibit certain aspects of a defendant’s
conduct, and merely permits the defendant to continue such conduct that was neither investigated
nor challenged, does not imply that the conduct is, or has been determined to be, lawful. The
government may have many reasons having nothing to do with lawfulness for not challenging
particular conduct at the time of the decree or for permitting conduct to continue subject to later
investigation. In Penne v. Greater Minneapolis Area Bd. of Realtors, 604 F.2d 1143 (8th Cir.
1979), the defendant realty board argued that its dissemination of commission rate information
Case 2:21-cv-00312-TSZ Document 95 Filed 08/10/21 Page 5 of 8
STATEMENT OF INTEREST ON BEHALF OF
THE UNITED STATES OF AMERICA - 2:21-cv-00312-TSZ - 6
UNITED STATES ATTORNEY
700 STEWART STREET, SUITE 5220
SEATTLE, WASHINGTON 98101
(206) 553-7970
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was permitted by an earlier settlement and injunction stating that “[n]othing in this injunction
shall be deemed to prohibit” that conduct. The Court of Appeals rejected that argument, stating
“[t]he short answer to this argument is that nothing in the Forbes injunction . . . can be construed
to countenance the sort of dissemination of price information as is here involved if such
dissemination is shown to have anti-competitive effects forbidden under the Sherman Act.” Id.
at 1150.
Consistent with Penne, the 2008 consent decree contained an express reservation of the
United States’ rights in Section IX, “No Limitation on Government Rights.” Doc. 85-4 at 11.
That section provides that “[n]othing in this Final Judgment shall limit the right of the United
States to investigate and bring actions to prevent or restrain violations of the antitrust laws
concerning any Rule or practice adopted or enforced by NAR or any of its Member Boards.”
This reservation applies to the entire Final Judgment, not just to the “Permitted Conduct,” and it
therefore renders unavailing NAR’s attempt to distinguish Moehrl v. NAR, 492 F. Supp. 3d 768
(N.D. Ill. 2020), on the ground that the NAR rule challenged there was only “permitted” by the
decree rather than “approved” (Doc. 93 at 8). This reservation also confirms that the United
States did not permit— much less “approve”—NAR to use the consent decree to shield from
future investigation or challenge “any Rule or practice adopted or enforced by NAR or any of its
Member Boards.” Doc. 85-4 at 11.
In any event, the 2008 consent decree was limited to a ten-year term, Doc. 85-4 § X,
which shows that it was not intended to apply long into the future when the real estate industry
likely would have changed. The decree expired in 2018 and should not be read to apply to
industry developments, such as the massive growth of Zillow into an allegedly critical platform
for marketing homes directly to consumers (as opposed to through a multiple listing service),
Case 2:21-cv-00312-TSZ Document 95 Filed 08/10/21 Page 6 of 8
STATEMENT OF INTEREST ON BEHALF OF
THE UNITED STATES OF AMERICA - 2:21-cv-00312-TSZ - 7
UNITED STATES ATTORNEY
700 STEWART STREET, SUITE 5220
SEATTLE, WASHINGTON 98101
(206) 553-7970
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which hardly existed in 2008. See generally NCAA v. Alston, 141 S. Ct. 2141, 2021 U.S. LEXIS
3123, *59 (June 21, 2021) (“And judges must be open to clarifying and reconsidering their
decrees in light of changing market realities.”).
In two other pending cases, NAR has tried similarly to use the 2008 consent decree to
shield conduct that the government neither investigated nor challenged in the 2005 case that
resulted in the decree. The United States responded with Statements of Interest in those cases,
and both courts properly declined to draw any inference in favor of NAR from the 2008 consent
decree. See Sitzer v. NAR, 420 F. Supp. 3d 903 (W.D. Mo. 2019) (no mention of 2008 consent
decree despite NAR’s argument based on it); Moehrl, 492 F. Supp. 3d at 786 (“The Court agrees
with the United States that nothing in the [2008] consent decree can be read to immunize the
practices challenged here from antitrust scrutiny.”). The United States thus respectfully requests
that this Court decline NAR’s invitation to draw a similarly unwarranted inference here.
CONCLUSION
No inference should be drawn from the 2008 consent decree that the No-Commingling
Rule is consistent with the antitrust laws.
///
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///
///
///
Case 2:21-cv-00312-TSZ Document 95 Filed 08/10/21 Page 7 of 8
STATEMENT OF INTEREST ON BEHALF OF
THE UNITED STATES OF AMERICA - 2:21-cv-00312-TSZ - 8
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DATED this 10
th
day of August, 2021.
Respectfully Submitted,
RICHARD A. POWERS
Acting Assistant Attorney General
DANIEL E. HAAR
NICKOLAI G. LEVIN
STEVEN J. MINTZ
Attorneys
U.S. Department of Justice
Antitrust Division
950 Pennsylvania Avenue, N.W.
Washington, D.C. 20530-0001
Phone: (202) 353-0256
Email: [email protected]
TESSA M. GORMAN
Acting United States Attorney
s/ Kyle A. Forsyth
KYLE A. FORSYTH, WSBA #34609
Assistant United States Attorney
United States Attorney’s Office
700 Stewart Street, Suite 5220
Seattle, WA 98101-1271
Phone: (206) 553-7970
Fax: (206) 553-4067
Email: Kyle.For[email protected]
Attorneys for the United States of America
Case 2:21-cv-00312-TSZ Document 95 Filed 08/10/21 Page 8 of 8
UNITED STATES ATTORNEY
700
STEWART STREET, SUITE 5220
SEATTLE, WASHINGTON 98101
(206)
553-7970
