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A federal court judge is forcing Zillow to turn over data on For Sale By Owner (FSBO) listings on its website to discount brokerage REX Real Estate in their ongoing legal battle.
A month ago, REX filed a motion to compel arguing that Zillow’s FSBO listing data is “highly relevant” to REX’s antitrust claims, brought in March 2021 against Zillow and the National Association of Realtors. REX’s suit alleges that a NAR rule, known as the no-commingling rule, prompted Zillow to separate non-MLS listings from MLS listings on its website. The non-MLS listings, which include REX’s listings as well as FSBO listings, appear under an “Other” tab on Zillow’s site, separate from an “Agent Listings” tab for MLS listings.
Judge Thomas Zilly
“[T]he Court concludes that for-sale-by-owner (‘FSBO’) listings data is relevant and proportional to the needs of the case,” the Oct. 19 order from Judge Thomas S. Zilly of the U.S. District Court in Seattle reads.
“FSBO listings data is, at a minimum, relevant to the issue of causation.”
When reports indicated that REX was closing shop in May, REX blamed NAR and Zillow for the death of REX’s business model. According to REX’s motion, data on FSBO listings, which add up to 6.2 percent of all listings nationwide, will show the impact on REX’s listings of being moved to the “Other listings” tab in that it could serve as “powerful corroboration of REX’s position that the two-tab display proximately caused REX economic harm.”
The data would also show the harm of the display change on competition more generally, according to the filing.
“If, following Zillow’s display change, there has been a decline in the number of consumer views of FSBO homes, or a decline in the number of homes offered for sale by owner on Zillow, such a decline would represent a significant impact on competition from NAR’s and Zillow’s collusive activity,” the filing said.
In an exhibit to the motion to compel, REX included a Sept. 20 letter from Zillow counsel Jesse Beringer to REX saying that the FSBO listings were not “relevant to this case in any manner.”
“But even if they were, the burden of producing such data, which comprises nearly a million listings records and even more engagement records — on top of the already millions of records that Zillow is otherwise producing for MLS and REX’s own listings within REX’s MSAs — would be disproportionate and outweigh any such relevance,” Beringer wrote.
But Zilly disagreed with Zillow’s argument that producing the FSBO listing data would be “immensely’ burdensome.”
“The Court … concludes that the 18 working days needed to gather and produce the requested data is not unduly burdensome,” the order said.
“Therefore, Zillow is ORDERED to produce to REX the requested FSBO listings data no later than Friday, November 18, 2022.”
In an emailed statement, a Zillow spokesperson told Inman, “At Zillow, we hold ourselves to a high standard when it comes to maintaining important information and will produce what the court has ordered. We maintain our position that the claims made in the underlying suit are without merit.”
Trial in the case is set for June 5, 2023.
Zillow, which is a broker member of NAR, has petitioned NAR’s MLS Technology and Emerging Issues Advisory Board, which is a subset of NAR’s Multiple Listing Issues and Policies Committee, to get rid of the no-commingling rule and has suggested to REX that the two join forces to rid the real estate industry of the rule.
Last month, Inman published an op-ed, authored by Zillow Senior Director of Broker Operations Matt Hendricks, applauding a decision by the largest MLS in Colorado, REcolorado, to rescind the optional rule and expressing the hope that other MLSs would follow suit.
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