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Zillow is inviting nemesis REX Serious Estate to join forces in opposition to a controversial National Association of Realtors’ rule, even as a struggle of wills in between the a few rages on in court docket.

About two weeks in the past, soon after stories that departing REX workforce were authorized to maintain their laptops as “severance” and that one particular worker wiped prospective evidence from her laptop, Zillow questioned a federal courtroom to purchase the discount brokerage to transform more than a listing of the 250 or so staff members who have remaining REX due to the fact January 2021 and to state irrespective of whether they had been allowed to continue to keep REX-issued laptops.

On Tuesday, REX pushed back again against Zillow’s motion to compel, telling the court docket that Zillow’s ask for is a “fishing expedition” that aims to embarrass REX ahead of the courtroom.

“Zillow has neither a legal nor factual foundation to warrant this intrusive discovery,” attorneys for REX wrote in a authorized submitting. “What it desires is to harass REX and tarnish it in the eyes of the Court. Its try really should be rebuffed.”

The brokerage extra that the choice of previous staff Angela Cook dinner to “wipe” her REX-issued laptop in order to reward it to a relative did not result in any decline of documents or info due to the fact she uploaded “all of her REX work product” to REX’s cloud-centered devices just before she voluntarily remaining the business in March. In a lawful submitting, Cook dinner explained she ordered the laptop computer from REX at a price cut on her departure.

REX sued NAR and Zillow in March 2021, alleging antitrust violations for a NAR rule referred to as the no-commingling rule which prompted Zillow to different non-MLS listings from MLS listings on its internet site, like listings from REX. When experiences indicated that REX was closing shop in May possibly, REX blamed NAR and Zillow for the dying of REX’s business enterprise product. REX at present has 4 staff, stated Michael Toth in a Sept. 3 legal submitting. Toth was REX’s general counsel until eventually Might.

In accordance to Zillow spokesperson Viet Shelton, Zillow will be distributing a formal reaction to REX’s latest filing and Zillow carries on to feel the statements in REX’s go well with are “without merit,” he instructed Inman in an emailed assertion.

But the genuine estate big also prompt that REX and Zillow workforce up to rid the true estate marketplace of the no-commingling rule.

“[W]e carry on to stimulate REX to join Zillow in advocating for sector rule variations that would allow all for-sale listings shown on Zillow to surface the way they had been in the past,” Shelton explained.

Inman not too long ago printed an op-ed, authored by Zillow Senior Director of Broker Operations Matt Hendricks, applauding a decision by the major MLS in Colorado, REcolorado, to rescind the optional no-commingling rule and expressing the hope that other MLSs would follow match.

“Zillow strongly supports updating procedures like these due to the fact they empower shoppers and supply a much more available, transparent picture of what is on the industry, encouraging them make greater-knowledgeable true estate decisions,” Hendricks wrote.

Shelton told Inman that Zillow is not just pushing for MLSs to opt out of the no-commingling rule, but also wants NAR to do away with the rule. Zillow, which is a broker member of NAR, has petitioned NAR’s MLS Technologies and Emerging Troubles Advisory Board, which is a subset of NAR’s A number of Listing Issues and Policies Committee, to get rid of the rule, according to Shelton.

The advisory board generally opinions proposed MLS coverage adjustments and decides irrespective of whether to send them to the comprehensive committee for thought. If the committee approves the proposed alterations, they then go to NAR’s board of administrators for a vote. NAR’s board usually satisfies twice a 12 months and routinely votes on MLS coverage adjustments. Zillow claimed particulars on the status of its petition were being not straight away obtainable.

Questioned for comment on Zillow’s drive to do away with the no-commingling rule, NAR spokesperson Mantill Williams explained to Inman, “Per NAR pointers, personal MLSs pick how their listings are shown. MLSs give consumers with the most exact, transparent and up-to-day data on community household listings.”

Bob Goldberg | NAR CEO

Meanwhile, REX has filed two motions to compel from NAR in its situation, demanding NAR create paperwork associated to two important antitrust fee lawsuits the trade team is battling, recognised as Moehrl and Sitzer/Burnett, and that NAR increase senior executives — including NAR CEO Bob Goldberg, NAR Normal Counsel Katie Johnson and NAR Chief Economist Lawrence Yun — to its listing of information custodians necessary to flip over proof all through the case’s discovery period.

Katie Johnson

In accordance to a person of REX’s filings, there is a “hand-in-glove relationship” amongst the no-commingling rule, which REX phone calls the segregation rule, and a NAR rule that requires listing brokers to offer purchaser brokers a fee to listing a residence in a Realtor-affiliated MLS. That rule, which REX calls the consumer-broker fee rule, is the subject of Moehrl and Sitzer/Burnett.

Because of that alleged relationship, REX is inquiring the court docket to drive NAR to fork over all documents relating to or manufactured by NAR in the Moehrl and Sitzer/Burnett instances.

“All 3 cases tell the same tale: NAR, alongside with NAR’s co-conspirators, has crafted and enforced the Consumer-Broker Payment Rule and related anticompetitive procedures to keep artificially high actual estate commissions,” attorneys for REX explained in a movement to compel.

“In other phrases, there is considerable overlap in the two information and regulation across the a few situations. Though NAR will very likely argue that this case challenges the Segregation Rule, not the Mandatory Consumer-Broker Fee Rule, the Segregation Rule does not exist in a vacuum. It serves to safeguard the Purchaser-Broker Fee Rule from innovative and disruptive organizations like REX.”

In a independent motion to compel NAR to comply with the court’s “electronically stored information” (ESI) buy, REX’s attorneys requested that the court docket buy NAR to increase seven further custodians to supply information applicable to the case:

• Bob Goldberg (NAR’s CEO)
• Katherine “Katie” Johnson (NAR’s normal counsel and chief member encounter officer)
• Kate Lawton (NAR’s vice president of membership practical experience)
• Kevin Milligan (NAR’s previous vice president of board coverage and plans)
• Diane Mosley (NAR’s director of schooling and coverage means)
• Clifford Niersbach (NAR’s former affiliate normal counsel and vice president of board policy and plans)
• Lawrence Yun (NAR’s chief economist)

Lawrence Yun

“Each of these men and women has had major responsibility for NAR’s reaction to competitors from internet-dependent providers and the progress and enforcement of NAR’s rules and insurance policies restricting both how houses are shown on the internet and the negotiation of commissions,” REX’s lawyers wrote.

Relating to Goldberg particularly, an lawyer for REX famous that Zillow had admitted in responses to published queries from REX that “Goldberg was involved with Zillow’s decision to sign up for NAR.”

Thus, the legal professional mentioned, he very likely has info “relating to Zillow’s choice to be a part of NAR and NAR’s assessments, strategies and routines directed at protecting its membership from competing technological innovation-centered platforms seeking to provide discounted, immediate, or much more transparent authentic estate brokerage products and services. These are all issues pertinent to this circumstance.”

Zillow declined to remark on how Goldberg was included in the company’s decision to be part of NAR.

In accordance to REX’s filing, NAR has so considerably only determined two custodians, Rodney Gansho and Rene Galicia, whom the submitting describes as “two small-amount executives who appear from NAR’s descriptions to have had no involvement in high-degree policy choice-building and whose job obligations location them only on the periphery of the challenged anticompetitive conduct.” Gansho is NAR’s director of engagement and Galicia is NAR’s previous director of MLS engagement.

The seven proposed custodians are previously ESI custodians in the Moehrl and Sitzer/Burnett circumstances and all are affiliated with “highly relevant” committees and perform groups at NAR, this kind of as the Numerous Listing Concerns and Procedures Committee, the Strategic Company Innovation and Technological innovation (SBIT) group and the Research group, according to the submitting,

“At all instances, NAR has complied with the court’s orders and policies, even when the plaintiff has not,” NAR’s Williams advised Inman in an emailed assertion. “We assume the court docket to concur with our properly-started positions.”

NAR filed its possess movement to compel versus REX insurer PIUS previous thirty day period and that movement is still pending.

E-mail Andrea V. Brambila.

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