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U.S. District Court Judge Thomas S. Zilly approved REX Real Estate’s counsel’s request to question Zillow CEO Rich Barton on Tuesday, delivering yet another blow to the real estate giant in a 13-month battle over alleged antitrust activity.
Judge Thomas S. Zilly
Court records show Zillow’s counsel filed a motion for a protective order on April 21. In the 18-page order, Zillow’s counsel argued REX’s request to question Barton should be denied as the CEO doesn’t have “unique, non-repetitive, firsthand knowledge relevant” to Project Bookshelf, the codename for Zillow’s internet data exchange (IDX) and multiple listing system policies.
“The apex doctrine is designed to protect against precisely the tactics that Plaintiff REX — Real Estate Exchange Inc. is attempting to engage in here — abusing the discovery process to attempt to reach an apex official that has no unique, non-duplicative, firsthand knowledge of the facts at issue in this case without first exhausting any and all less intrusive means of getting the information it purports to seek,” the document states. “In particular, Plaintiff seeks to depose Zillow Group Inc.’s CEO, Richard Barton, to obtain information about Project Bookshelf (i.e., Zillow’s decision to obtain listings data through internet data exchange (“IDX”) feeds, and to join various MLSs).”
Zillow’s counsel went on to note that REX already has two depositions scheduled with other high-level executives who have more intimate knowledge of Project Bookshelf, meaning that Barton has nothing new to offer.
“As Zillow has explained repeatedly, in interrogatory responses and multiple meet-and-confers, Mr. Barton has no unique, non-duplicative personal knowledge about Project Bookshelf,” the motion continued. “The Project began before Mr. Barton was CEO, and Plaintiff already is scheduled, within the next two weeks, to depose two other high-level Zillow employees who were directly involved in that Project.”
Four days later, Zilly denied Zillow’s motion and required Barton to attend a three-hour deposition within the next 30 days. Zilly also noted the deposition must take place over ZOOM, and gave both parties until May 16 to “meet and confer regarding possible amendments to the current motion deadlines and briefing schedule and submit a proposal to the court within the next week.”
Inman reached out to Zillow and REX for comment, but neither was available at the time of publication.
Rich Barton
The motion is the latest chapter in a 13-month battle between REX, Zillow and the National Association of Realtors over Zillow’s application of NAR’s ‘No-Commingling Rule.”
In March 2022, REX filed suit against Zillow and NAR, saying Zillow’s decision to split listings between “agent listings” and “other listings” tabs dramatically decreased the number of views for their listings on Zillow and lowered sales. Furthermore, REX said the decision negatively impacts consumers, especially sellers who end up “[listing] the home for more days on market and accept lower sales prices” because buyers aren’t searching the “other listings” tab.
NAR and Zillow responded in July 2022 with a motion to dismiss, based on a 2008 consent decree with the Department of Justice that “allowed Realtor-affiliated multiple listing services to require that MLS listings be searched separately from listings obtained from other sources.”
However, the DOJ chimed in and said NAR was misusing the now-expired decree. “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), which hardly existed in 2008.”
Zilly denied the motion to dismiss in September, noting that REX had provided sufficient evidence to support its allegations.
“[The] defendants also argue that the complaint lacks sufficient allegations to plead harm to competition, principally arguing that Plaintiff merely assumes that harm to itself is harm to competition,” Zilly said in a 25-page order. “The Court disagrees, as the complaint is replete with allegations of harm to competition.”
“[The] plaintiff plausibly alleges that Defendants’ actions have a substantial anticompetitive effect that harms consumers in the relevant market,” he continued while referencing NAR’s No-Commingling and Buyer-Broker Commission rules. “The Court, therefore, denies [the] Defendants’ motions to dismiss the antitrust claims brought under Section 1 of the Sherman Act and under the [Consumer Protection Act].”
The case took several more turns during the last quarter of 2022, with Zillow petitioning NAR to end no-commingling, Zillow being ordered to turn over FSBO data to REX, and NAR being required to turn over “relevant evidence” to REX.
The trial date is set for September 18.
