REX Real Estate is asking a federal court to toss the National Association of Realtors’ counterclaim against the discount brokerage on First Amendment grounds.
Last month, NAR hit back against a series of claims by REX that the 1.5-million-member trade group had committed antitrust violations and inflated agent commissions, accusing REX of false advertising in violation of the Lanham Act.
On Thursday, REX filed a motion to dismiss the countersuit in a District Court in Seattle, alleging that its opinions on legal and policy issues are protected speech.
“While NAR has and continues to robustly argue its own case in this lawsuit and in many other public forums, NAR now seeks to enjoin REX from itself speaking out against and challenging practices that it believes violate antitrust laws and harm competition,” attorneys for REX wrote in the motion.
“NAR’s Lanham Act claim should be dismissed because it infringes on REX’s First Amendment right to express opinions on legal and policy matters.”
NAR, they added, “continues to take shots at REX and its business practices in the court of public opinion” and “should not be allowed to use the Lanham Act to suppress REX’s protected speech just because NAR disagrees with the message.”
The motion also asserts that NAR lacks standing — the legal right to bring the suit — because the trade group did not allege any facts showing that REX has frustrated its organization mission or that the trade group diverted resources to combat REX’s conduct. And costs related to fighting REX’s antitrust suit against NAR don’t count, according to the filing.
“Spending money to defend this lawsuit is not sufficient injury to confer standing,” the motion said.
NAR did not explain exactly how REX’s alleged false advertising, including REX’s statements about its own business, harmed the association, according to REX’s attorneys.
“NAR does not allege that consumers, brokers, or anyone else have withheld trade from NAR itself,” they wrote.
“At best, the counterclaim can be read to allege injury to NAR’s members and/or [multiple listing services] that in turn may affect NAR. This, however, is one step too attenuated to establish standing.”
Moreover, they argued, opinions on commercial, legal, or social matters are not within the scope of the Lanham Act, which requires a false representation of fact. Facts, unlike opinions, can be proven true or false, they said.
“Statements purporting to interpret a statute or forecast a legal outcome are opinions, not facts,” they wrote.
“REX’s various opinions challenging the legality of NAR’s rules under the antitrust laws, therefore, cannot result in liability for false advertising.”
In an emailed statement, NAR spokesperson Wes Shaw said REX’s claims “have no merit” and that the brokerage had “grossly mischaracterized our counterclaim.”
“NAR’s counterclaim clearly sets forth the ways REX has made false and misleading advertisements and statements about its services, thereby deceiving consumers and discouraging them from obtaining the pro-consumer, pro-competitive benefits provided by independent, local broker marketplaces,” Shaw said, referring to MLSs.
“NAR puts consumers first. Independent local broker marketplaces ensure consumers have access to accurate, transparent property information, which creates market-driven pricing and a fair and accessible market for all.”
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