Attorney Alice A. Wang of the DOJ’s Antitrust Division will appear at oral arguments in the U.S. Court of Appeals for the Ninth Circuit on Feb. 13.
Turn up the volume on your real estate success at Inman On Tour: Nashville! Connect with industry trailblazers and top-tier speakers to gain powerful insights, cutting-edge strategies, and invaluable connections. Elevate your business and achieve your boldest goals — all with Music City magic. Register now.
The U.S. Department of Justice’s multi-front fight against certain National Association of Realtors rules is officially heading to an appeals court this month.
TAKE THE INMAN INTEL INDEX SURVEY FOR JANUARY
On Jan. 31, the U.S. Court of Appeals for the Ninth Circuit granted the antitrust enforcer’s Jan. 8 request to speak at oral arguments in an appeal filed by now-defunct discount brokerage REX, also known as Real Estate Exchange, in litigation against NAR and real estate giant Zillow.
Oral arguments in the case are scheduled for Feb. 13. The court has allotted 20 minutes to each side and the DOJ will have an additional five minutes to speak on top of that time, according to the court’s Friday order.
On Feb. 3, Alice A. Wang, counsel to the assistant attorney general at the DOJ’s Antitrust Division, acknowledged the order and said she would appear at the hearing, which will take place at a courthouse in Honolulu.
Wang wrote the Jan. 8 motion requesting the time to speak. She also wrote an amicus brief the DOJ previously submitted in the case in June in support of neither party, without taking a position on the case’s ultimate outcome.
“Instead, the United States explained that, although the district court appeared to have a limited view of when optional association rules can represent concerted action under Section 1 of the Sherman Act, there are additional ways that optional rules constitute concerted action that the court did not appear to consider,” Wang wrote in the motion.
“The United States thus urged this Court to vacate and remand the case for the district court to apply the proper legal framework to the evidence in this case.”
The motion noted that none of the parties oppose the DOJ’s request for five minutes, but Zillow and NAR thought the five minutes should come out of REX’s time to speak while REX asked the court to add on the DOJ’s time without affecting the already-allotted 20 minutes per side. The court agreed with REX.
The DOJ’s June amicus brief took aim at NAR’s optional “no-commingling” rule, which, when adopted by an MLS, requires brokerage websites to separate displays of MLS listings from non-MLS listings. Because REX did not use MLSs for most of its existence, REX’s suit alleges that this led to limited visibility of REX’s listings on Zillow and the rule is therefore anti-competitive.
REX’s antitrust claims against NAR and Zillow were thrown out before trial, REX lost on its remaining claims at trial, and then the brokerage was subsequently denied a request for a retrial. REX is appealing that latter ruling.
According to the DOJ’s amicus brief, the “no-commingling” rule’s “optional nature” does not prevent it from potentially being anti-competitive, and the court decision denying a retrial did not fully take into consideration that associations like NAR may have circumvented antitrust oversight by enacting such optional rules.
The DOJ further argued that Supreme Court precedent has shown optional rules may involve “concerted action” that can make those rules “mandatory in practice” and that the court should vacate the district court’s denial of a retrial so that the lower court fully considers REX’s argument that the optional rule nonetheless invited NAR, MLSs and Zillow “to participate in a common plan.”
Whether the appeals court will agree remains to be seen.