Case 2:21-cv-00312-TSZ Document 117 Filed 03/07/22 Page 1 of 19
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`THE HONORABLE THOMAS S. ZILLY
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`UNITED STATES DISTRICT COURT
`WESTERN DISTRICT OF WASHINGTON
`AT SEATTLE
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`Case No. 2:21-cv-00312-TSZ
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`THE NATIONAL ASSOCIATION OF
`REALTORS’® OPPOSITION TO REX’S
`MOTION TO DISMISS NAR’S
`COUNTERCLAIM
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`REX – REAL ESTATE EXCHANGE, INC.,
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`v.
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`Plaintiff,
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`ZILLOW, INC., et al.
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`Defendants.
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`NATIONAL ASSOCIATION OF
`REALTORS®,
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`Counterclaim-Plaintiff,
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`v.
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`REX – REAL ESTATE EXCHANGE, INC.,
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`Counterclaim-Defendant.
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`NAR’S OPP. TO MOTION
`TO DISMISS COUNTERCLAIM
`Case No. 2:21-cv-00312-TSZ
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`QUINN EMANUEL URQUHART & SULLIVAN, LLP
`1109 First Avenue, Suite 210
`Seattle, WA 98101
`(206) 905-7000
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`

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`Case 2:21-cv-00312-TSZ Document 117 Filed 03/07/22 Page 2 of 19
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`I.
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`II.
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`TABLE OF CONTENTS
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`Page
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`INTRODUCTION...........................................................................................................1
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`ARGUMENT..................................................................................................................2
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`A.
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`NAR Has Asserted Valid Lanham Act Claims ......................................................2
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`1.
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`2.
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`3.
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`REX’s Statements Are False or Misleading Statements of Fact...................2
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`REX’s False Statements Appear in Commercial Advertisements ................4
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`NAR Does Not Challenge Protected Speech, and Noerr-Pennington
`Does Not Apply ........................................................................................7
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`B.
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`NAR Has Standing to Challenge REX’s False Advertisements ..............................8
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`1.
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`2.
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`NAR Has Article III Standing ...................................................................8
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`NAR Has Statutory Standing...................................................................11
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`C.
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`If NAR’s Counterclaim Is Dismissed, NAR Should Be Granted Leave to
`Amend...............................................................................................................13
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`III.
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`CONCLUSION.............................................................................................................13
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`NAR’S OPP. TO MOTION
`TO DISMISS COUNTERCLAIM
`Case No. 2:21-cv-00312-TSZ i
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`QUINN EMANUEL URQUHART & SULLIVAN, LLP
`1109 First Avenue, Suite 210
`Seattle, WA 98101
`(206) 905-7000
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`

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`Case 2:21-cv-00312-TSZ Document 117 Filed 03/07/22 Page 3 of 19
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`TABLE OF AUTHORITIES
`
`Cases
`
`Page
`
`Am. Diabetes Ass’n v. United States Dep’t of the Army,
` 938 F.3d 1147 (9th Cir. 2019) ............................................................................................. 10
`
`Ariix, LLC v. NutriSearch Corp.,
` 985 F.3d 1107 (9th Cir. 2021) ............................................................................................... 4
`
`Cal Pure Pistachios, Inc. v. Primex Farms, LLC,
` No. 09-7874, 2010 WL 11519537 (C.D. Cal. Mar. 25, 2010).................................................. 3
`
`Coastal Abstract Serv., Inc. v. First Am. Title Ins. Co.,
` 173 F.3d 725 (9th Cir. 1999) ................................................................................................. 3
`
`Dependable Sales & Serv., Inc. v. Truecar, Inc.,
` No. 15-1742, 2016 WL 79992 (S.D.N.Y. Jan. 6, 2016)........................................................... 3
`
`EP Henry Corp. v. Cambridge Pavers, Inc.,
` 383 F. Supp. 3d 343 (D.N.J. 2019) ........................................................................................ 3
`
`Genus Lifesciences Inc. v. Lannett Co., Inc.,
` 378 F. Supp. 3d 823 (N.D. Cal. 2019) .................................................................................... 4
`
`Greater Houston Transportation Co. v. Uber Techs., Inc.,
` 155 F. Supp. 3d 670 (S.D. Tex. 2015) .................................................................................... 5
`
`Gully v. Nat’l Credit Union Admin. Bd.,
` 341 F.3d 155 (2d Cir. 2003) ................................................................................................ 10
`
`Havens Realty Corp. v. Coleman,
` 455 U.S. 363 (1982)............................................................................................................ 10
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`Heartland Payment Sys., Inc. v. Mercury Payment Sys., LLC,
` No. 14-0437, 2015 WL 3377662 (N.D. Cal. Feb. 24, 2015) .................................................... 3
`
`Irish Lesbian & Gay Org. v. Giuliani,
` 143 F.3d 638 (2d Cir. 1998) ................................................................................................ 11
`
`Lexmark Int’l, Inc. v. Static Control Components, Inc.,
` 572 U.S. 118 (2014).......................................................................................................11, 12
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`Lona’s Lil Eats, LLC v. DoorDash, Inc.,
` No. 20-6703, 2021 WL 151978 (N.D. Cal. Jan. 18, 2021) ...................................................... 4
`
`Luminati Networks Ltd. v. BIScience Inc.,
` No. 2:18-483, 2019 WL 2084426 (E.D. Tex. May 13, 2019) .................................................. 5
`
`Meese v. Keene,
` 481 U.S. 465 (1987).............................................................................................................. 9
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`Murphy v. Nat’l Collegiate Athletic Ass’n,
` 138 S. Ct. 1461 (2018) ........................................................................................................ 11
`QUINN EMANUEL URQUHART & SULLIVAN, LLP
`NAR’S OPP. TO MOTION
`1109 First Avenue, Suite 210
`TO DISMISS COUNTERCLAIM
`Seattle, WA 98101
`(206) 905-7000
`Case No. 2:21-cv-00312-TSZ ii
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`

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`Case 2:21-cv-00312-TSZ Document 117 Filed 03/07/22 Page 4 of 19
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`Nat’l Collegiate Athletic Ass’n v. Governor of New Jersey,
` 730 F.3d 208 (3d Cir. 2013) ................................................................................................ 10
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`Parsons v. U.S. Dep’t of Just.,
` 801 F.3d 701 (6th Cir. 2015) ............................................................................................9, 10
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`PAX Water Techs., Inc. v. Medora Corp.,
` No. 18-9143, 2019 WL 4390567 (C.D. Cal. Aug. 5, 2019) ..................................................... 2
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`Pegasystems, Inc. v. Appian Corp.,
` 463 F. Supp. 3d 152 (D. Mass. 2020)..................................................................................... 5
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`Reddy v. Litton Indus., Inc.,
` 912 F.2d 291 (9th Cir. 1990) ............................................................................................... 13
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`Rescue v. Walters,
` No. 20-5700, 2021 WL 22591 (W.D. Wash. Jan. 4, 2021) .................................................4, 11
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`RingCentral, Inc. v. Nextiva, Inc.,
` No. 19-2626, 2020 WL 4039322 (N.D. Cal. July 17, 2020) .................................................... 2
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`SKEDKO, Inc. v. ARC Prod., LLC,
` No. 3:13-696, 2014 WL 2465577 (D. Or. June 2, 2014) ......................................................... 5
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`The Presbyterian Church v. United States,
` 870 F.2d 518 (9th Cir. 1989) ............................................................................................... 10
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`TransUnion LLC v. Ramirez,
` 141 S. Ct. 2190 (2021) .......................................................................................................... 9
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`Turkish Coal. of Am., Inc. v. Bruininks,
` 678 F.3d 617 (8th Cir. 2012) ............................................................................................... 11
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`United States v. Corinthian Colleges,
` 655 F.3d 984 (9th Cir. 2011) ............................................................................................... 13
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`W. Sugar Coop. v. Archer-Daniels-Midland Co.,
` No. 11-3473, 2015 WL 12683192 (C.D. Cal. Aug. 21, 2015) ................................................. 5
`
`Walker v. City of Lakewood,
` 272 F.3d 1114 (9th Cir. 2001) ............................................................................................... 9
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`NAR’S OPP. TO MOTION
`TO DISMISS COUNTERCLAIM
`Case No. 2:21-cv-00312-TSZ iii
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`QUINN EMANUEL URQUHART & SULLIVAN, LLP
`1109 First Avenue, Suite 210
`Seattle, WA 98101
`(206) 905-7000
`
`

`

`Case 2:21-cv-00312-TSZ Document 117 Filed 03/07/22 Page 5 of 19
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`I.
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`INTRODUCTION
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`REX has engaged in a campaign of lies that have misled consumers and harmed NAR’s
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`reputation. NAR’s counterclaim seeks to hold REX responsible for those falsehoods. Specifically,
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`as described in NAR’s counterclaim, REX has made the following false statements on its website:
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`• “REX charges a low fee by totally eliminating the buy side agent commission.” ECF
`114 (Counterclaim) ¶ 8.
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`• REX charges “[n]o buyer’s agent fee . . . . Even if your buyer is working with a non-
`REX agent, REX doesn’t ask sellers to cover the cost.” Id. ¶ 9.
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`• With REX, “no additional buyer’s agent commission [is] required.” Id. ¶ 10.
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`• “REX’s services cost significantly less when compared with those of traditional real
`estate agents,” who are “members of the National Association of Realtors (NAR).” Id.
`¶ 11.
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`• “By removing the obligation to pay two agent commissions for a single transaction,
`[REX] save[s] [its] customers an average of $10,435 off their home sales . . . .” Id. ¶ 13.
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`• “Our tech geniuses have come up with algorithms and computations that use data and AI
`to find qualified buyers.” Id. ¶ 27.
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`• “By more efficiently pairing sellers and buyers, we can reduce costs for all involved--
`REX charges a fixed 2% covering both sides of the transaction instead of the 5 -6%
`customarily enforced by MLS participants.” Id. ¶ 29.
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`• “Using machine learning, we’ve built predictive analytics that can target and accurately
`match sellers and buyers of properties.” Id.
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`• “REX uses smart, direct and cost-effective marketing to drive traffic to each listing
`through proprietary data-driven algorithms. Smarter marketing enables us to sell homes
`faster, while avoiding buy-side agent commissions of 2-3%” Id. ¶ 30.
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`• “[W]e have PhDs from the best schools in the country predicting who we think within a
`certain radius or square mile or demographic is the best buyer for your home, and then
`dropping them a note.” Id. ¶ 38.
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`• “So most people come to [REX to] sell their home and then we target people who would
`like to buy that home. Not using the MLS, not using agents, but just using digital
`technology to identify them.” Id. ¶ 39.
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`REX used these false advertisements on its website to attack NAR. Specifically, REX
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`falsely advertised its services (for example, claiming REX does not charge buyer-agent
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`commissions) and then drew false comparisons between REX’s services and aspects of the services
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`NAR’S OPP. TO MOTION
`TO DISMISS COUNTERCLAIM
`Case No. 2:21-cv-00312-TSZ 1
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`
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`QUINN EMANUEL URQUHART & SULLIVAN, LLP
`1109 First Avenue, Suite 210
`Seattle, WA 98101
`(206) 905-7000
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`

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`Case 2:21-cv-00312-TSZ Document 117 Filed 03/07/22 Page 6 of 19
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`provided by other real estate brokers that—according to REX—are mandated by NAR’s rules.
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`Those false claims about REX’s services and the misleading comparisons between REX’s services
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`and what is required (or impeded) by NAR’s rules have harmed NAR’s reputation. In short, as
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`alleged in NAR’s counterclaim, REX lied about its own services and lied about what NAR’s rules
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`require, and then it peddled those lies to get more business and damage NAR’s reputation.
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`In its motion to dismiss, REX does not contest that it made the challenged statements, argue
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`that any of the statements are true, or dispute that its campaign of lies was specifically intended to
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`harm NAR’s reputation. In fact, REX does not mention—let alone discuss—any of the foregoing
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`false statements, which were specifically pleaded in NAR’s counterclaim. Instead, REX’s motion
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`invokes misguided legal arguments while simply ignoring NAR’s allegations and the law. Because
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`none of REX’s legal arguments have merit, NAR respectfully asks the Court to deny REX’s motion
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`to dismiss.
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`II.
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`ARGUMENT
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`A.
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`NAR Has Asserted Valid Lanham Act Claims
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`1.
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`REX’s Statements Are False or Misleading Statements of Fact
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`REX wrongly insists NAR challenged nonactionable opinions, ECF 115 at Section III.C.1,
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`but it ignores the actual statements that form the basis of NAR’s counterclaim—all of which can be
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`proven false.
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`First, REX ignores that the counterclaim alleges REX falsely markets that its clients do not
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`pay buyer-agent commissions. Those are statements of fact. It is either true or false that REX
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`“totally eliminat[es] the buy side agent commission,” ECF 114 (Counterclaim) ¶ 8, charges “no
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`buyer’s agent fee. . . [e]ven if [the] buyer is working with a non-REX agent,” id. ¶ 9, “bypass[es]
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`traditional agent fees,” id. ¶ 14, and “remov[es] the obligation to pay two agent commissions for a
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`single transaction,” id. ¶ 13. As numerous courts have held, these types of claims regarding the
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`price of services are statements of fact. See, e.g., RingCentral, Inc. v. Nextiva, Inc., No. 19-2626,
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`2020 WL 4039322, at *3 (N.D. Cal. July 17, 2020) (“The statements on pricing are ‘statements of
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`facts’ because they describe an absolute characteristic of [defendant]’s products and are factually
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`different than [defendant]’s actual pricing.”); PAX Water Techs., Inc. v. Medora Corp., No. 18-
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`NAR’S OPP. TO MOTION
`TO DISMISS COUNTERCLAIM
`Case No. 2:21-cv-00312-TSZ 2
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`QUINN EMANUEL URQUHART & SULLIVAN, LLP
`1109 First Avenue, Suite 210
`Seattle, WA 98101
`(206) 905-7000
`
`

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`Case 2:21-cv-00312-TSZ Document 117 Filed 03/07/22 Page 7 of 19
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`9143, 2019 WL 4390567, at *6 (C.D. Cal. Aug. 5 , 2019) (holding that a plaintiff who alleged the
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`“cost of Defendant’s product as stated in the White Paper is inaccurate” alleged false statements of
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`fact); Cal Pure Pistachios, Inc. v. Primex Farms, LLC, No. 09-7874, 2010 WL 11519537, at *3
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`(C.D. Cal. Mar. 25, 2010) (“[T]he Court would find that the statement that Defendants would ‘meet
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`or exceed prices offered throughout the industry,’ in the context of this action, rises above the level
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`of ‘mere puffing.’”).
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`Second, REX ignores the counterclaim’s recitation of REX’s statements about its
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`technology, which also can be proven false. It is either true or false that REX has “come up with
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`algorithms and computations that use data and AI to find qualified buyers,” ECF 114 (Counterclaim)
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`¶ 27, “actively market[ed] . . . home[s] to those buyers across a broad range of targeted channels
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`like Zillow, Trulia, Google, Facebook, Instagram, Bing, as well as in print,” id., “built predictive
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`analytics that can target and accurately match sellers and buyers of properties,” id. ¶ 29, and
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`“drive[n] traffic to each listing through proprietary data-driven algorithms,” id. ¶ 30. Either REX
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`does have “PhDs from the best schools in the country predicting who we think within a certain
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`radius or square mile or demographic is the best buyer for your home,” id. ¶ 38, or it does not. Either
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`REX “find[s] buyers by going to the internet directly, find[s] them on the web directly through ways
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`of putting out ads,” id. ¶ 39, or it does not. All of these claims are “provable of being either true or
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`false.” Coastal Abstract Serv., Inc. v. First Am. Title Ins. Co., 173 F.3d 725, 731 (9th Cir. 1999).
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`The statements cataloged in NAR’s counterclaim are of the type that courts routinely find to
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`be actionable statements of fact under the Lanham Act. See, e.g., Heartland Payment Sys., Inc. v.
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`Mercury Payment Sys., LLC, No. 14-0437, 2015 WL 3377662, at *5 (N.D. Cal. Feb. 24, 2015)
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`(denying motion to dismiss a Lanham Act claim based in part on statement that a merchant “would
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`save money by switching from Heartland to Mercury”); EP Henry Corp. v. Cambridge Pavers, Inc.,
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`383 F. Supp. 3d 343, 351 (D.N.J. 2019) (statements like “EP Henry developed our state-of-the art
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`Durafacing technology, allowing us to create pavers of unrivaled beauty and durability ” are
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`actionable if false); Dependable Sales & Serv., Inc. v. Truecar, Inc., No. 15-1742, 2016 WL 79992,
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`at *6 (S.D.N.Y. Jan. 6, 2016) (denying motion to dismiss Lanham Act claim based on statements
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`including “No Negotiation,” “No Surprises,” “No hidden costs or surprise fees,” “the negotiation-
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`NAR’S OPP. TO MOTION
`TO DISMISS COUNTERCLAIM
`Case No. 2:21-cv-00312-TSZ 3
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`
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`QUINN EMANUEL URQUHART & SULLIVAN, LLP
`1109 First Avenue, Suite 210
`Seattle, WA 98101
`(206) 905-7000
`
`

`

`Case 2:21-cv-00312-TSZ Document 117 Filed 03/07/22 Page 8 of 19
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`free car buying and selling mobile marketplace,” “we provide true up front pricing information and
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`a network of trusted dealers that guarantee savings without negotiation,” “There’s zero negotiation”;
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`“You don’t have to negotiate a thing,” “it’s negotiation free guaranteed savings and a hassle free
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`buying experience,” and “the negotiation-free car-buying platform”).
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`2.
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`REX’s False Statements Appear in Commercial Advertisements
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`Next, REX incorrectly argues that the challenged statements do not constitute commercial
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`speech and therefore they are not actionable under the Lanham Act. ECF 115 at Section III.C.2.
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`“Commercial speech is usually defined as speech that does no more than propose a commercial
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`transaction,” but “[c]ourts view this definition as just a starting point” and “try to give effect to a
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`common-sense distinction between commercial speech and other varieties of speech.” Ariix, LLC
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`v. NutriSearch Corp., 985 F.3d 1107, 1115 (9th Cir. 2021) (cleaned up). “Where the facts present
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`a close question, strong support that the speech should be characterized as commercial speech is
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`found where [1] the speech is an advertisement, [2] the speech refers to a particular product, and [3]
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`the speaker has an economic motivation.” Id. at 1115-16 (cleaned up). While it is not a close
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`question that REX’s website is commercial speech, all three of these elements is pleaded in NAR’s
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`counterclaim.
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`First, the statements NAR has challenged are advertisements; in fact, they come —without
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`exception—directly from REX’s website, which is specifically designed and intended to promote
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`REX’s services. Many courts have concluded that statements made on a business’s website to
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`promote its own products or services are commercial speech under the Lanham Act. See Lona’s Lil
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`Eats, LLC v. DoorDash, Inc., No. 20-6703, 2021 WL 151978, at *7 (N.D. Cal. Jan. 18, 2021)
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`(denying motion to dismiss Lanham Act claim based on statements on the defendant’s website);
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`Genus Lifesciences Inc. v. Lannett Co., Inc., 378 F. Supp. 3d 823, 839 (N.D. Cal. 2019) (“Genus
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`has sufficiently stated a claim for false advertising and contributory false advertising based on the
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`statements contained on Cody’s website.”); Rescue v. Walters, No. 20-5700, 2021 WL 22591, at *7
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`(W.D. Wash. Jan. 4, 2021) (denying motion to dismiss Lanham Act claim because defendant caused
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`injury through “false statements on his website”). That is even true for the statements appearing on
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`a company “blog.” Id. ¶¶ 9-13, 28-30, 38-39; see Luminati Networks Ltd. v. BIScience Inc., No.
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`NAR’S OPP. TO MOTION
`TO DISMISS COUNTERCLAIM
`Case No. 2:21-cv-00312-TSZ 4
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`
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`QUINN EMANUEL URQUHART & SULLIVAN, LLP
`1109 First Avenue, Suite 210
`Seattle, WA 98101
`(206) 905-7000
`
`

`

`Case 2:21-cv-00312-TSZ Document 117 Filed 03/07/22 Page 9 of 19
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`2:18-483, 2019 WL 2084426, at *12 (E.D. Tex. May 13, 2019) (holding that a company blog
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`discussing service and “made for the purpose of influencing customers to use [that] service” is
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`commercial speech); Pegasystems, Inc. v. Appian Corp., 463 F. Supp. 3d 152, 164 (D. Mass. 2020)
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`(“[Defendant’s LinkedIn] Post targeted readers who were ‘thinking about [defendant]’ as a vendor,”
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`so “[t]he ‘commercial advertising’ requirement is met.”).
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`Contrary to what REX argues, ECF 115 at Section III.C.2, it is irrelevant that REX made
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`some—but not all—of the statements at issue to the media in the first instance. Republication of
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`media interviews for the purpose of promoting products or services is not protected by the First
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`Amendment and is in fact expressly subject to scrutiny under the Lanham Act. W. Sugar Coop. v.
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`Archer-Daniels-Midland Co., No. 11-3473, 2015 WL 12683192, at *7 (C.D. Cal. Aug. 21, 2015)
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`(“[R]epublication and dissemination of the . . . Articles amounts to a form of advertising and
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`constitutes ‘commercial speech’ subject to the Lanham Act.”); see also Greater Houston Transp.
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`Co. v. Uber Techs., Inc., 155 F. Supp. 3d 670, 691 (S.D. Tex. 2015) (“Because Uber’s statements
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`as a whole are issued with the intent to influence consumer opinion, they thereby become
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`commercial speech even though they were contained in news media. ”); SKEDKO, Inc. v. ARC
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`Prods., LLC, No. 3:13-696, 2014 WL 2465577, at *6 (D. Or. June 2, 2014) (“Calkin’s statements
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`to the author of the article highlight the newest features of [a product] and explain the added benefits
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`that those new features provide to . . . customers. . . . [T]he magazine’s readership is targeted toward
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`plaintiff’s primary customer. . . . [T]he court finds that Calkin’s statements constitute commercial
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`speech.”).
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`In this case, NAR has challenged several false statements made by REX in press appearances
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`that were specifically intended to promote REX’s services when they were later republished on its
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`website. For example, REX republished a transcript of its CEO Jack Ryan’s discussion on the radio
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`show “Business Rockstars” on the REX blog as an advertisement for REX that is intended to drive
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`business to REX. See, e.g., ECF 114-10, Ex. 10, at 1 (“[REX] is the digital alternative to the
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`residential real estate agent. We do everything an agent would do, but for 20% of the costs and we
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`sell homes faster and with better results, but much reduced from the five or six percent fee people
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`are used to paying . . . .”); id. at 4-5 (“I think for most people, they realize that the residential real
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`NAR’S OPP. TO MOTION
`TO DISMISS COUNTERCLAIM
`Case No. 2:21-cv-00312-TSZ 5
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`
`
`QUINN EMANUEL URQUHART & SULLIVAN, LLP
`1109 First Avenue, Suite 210
`Seattle, WA 98101
`(206) 905-7000
`
`

`

`Case 2:21-cv-00312-TSZ Document 117 Filed 03/07/22 Page 10 of 19
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`estate business is dysfunctional. They’re paying out a lot of money, five of 6% for services for
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`many aren’t that great. . . . But for us, we are making money and doing it for a lot less.”). The f alse
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`statements in that interview are therefore actionable under the Lanham Act. E.g., ECF 114
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`(Counterclaim) ¶ 39 (“[W]e find buyers by going to the internet directly, find them on the web
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`directly through ways of putting out ads.”).
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`6
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`Second, the false statements identified in the counterclaim refer to REX’s services. See,
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`e.g., ECF 114 (Counterclaim) ¶ 8 (“REX charges a low fee by totally eliminating the buy side agent
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`commission. By using data and technology to identify buyers directly, REX can charge less and
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`make the selling experience a breeze.”); id. ¶ 9 (REX has “[n]o buyer’s agent fee – This can save
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`you thousands of dollars. Even if your buyer is working with a non-REX agent, REX doesn’t ask
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`sellers to cover the cost.”); id. ¶ 11 (“‘REX’s services cost significantly less when compared with
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`those of traditional real estate agents,’ who are ‘members of the National Association of Realtors
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`(NAR).’”); id. ¶ 13 (“By removing the obligation to pay two agent commissions for a single
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`transaction, [REX] save[s] [its] customers an average of $10,435 off their home sales . . . .”); id.
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`¶ 27 (“Our tech geniuses have come up with algorithms and computations that use data and AI to
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`find qualified buyers. We then actively market your home to those buyers across a broad range of
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`targeted channels like Zillow, Trulia, Google, Facebook, Instagram, Bing, as well as in print. ”); id.
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`¶ 28 (“We created REX in 2015 to be the first licensed residential brokerage that uses AI and big
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`data to push past the outmoded business practices of traditional realtors with the goal of providing
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`dramatically better outcomes and experiences for both buyers and sellers at a dramatically lower
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`cost.”); id. ¶ 29 (“Using machine learning, we’ve built predictive analytics that can target and
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`accurately match sellers and buyers of properties. By more efficiently pairing sellers and buyers,
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`we can reduce costs for all involved--REX charges a fixed 2% covering both sides of the transaction
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`instead of the 5-6% customarily enforced by MLS participants.”); id. ¶ 30 (“REX uses smart, direct
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`and cost-effective marketing to drive traffic to each listing through proprietary data -driven
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`algorithms. Smarter marketing enables us to sell homes faster, while avoiding buy -side agent
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`commissions of 2-3%.”).
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`NAR’S OPP. TO MOTION
`TO DISMISS COUNTERCLAIM
`Case No. 2:21-cv-00312-TSZ 6
`
`
`
`QUINN EMANUEL URQUHART & SULLIVAN, LLP
`1109 First Avenue, Suite 210
`Seattle, WA 98101
`(206) 905-7000
`
`

`

`Case 2:21-cv-00312-TSZ Document 117 Filed 03/07/22 Page 11 of 19
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`Third, the context in which these statements were made shows that REX had an economic
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`motivation and intended to advertise its services to the public. See, e.g., ECF 114-1, Ex. 1, at 1
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`(“Full service. Lowest fee. Sell your home with REX. Speak with one of our licensed agents (855)
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`571-0464.”); ECF 114-2, Ex. 2, at 3 (“Frustrated with traditional real estate methods? REX could
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`be a better option[.]”); ECF 114-3, Ex. 3, at 11 (“When You’re Ready to Buy or Sell Your Next
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`Home Rex is here for you. Our customer support professionals are ready to answer your questions
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`and connect you with a team of local, highly-rated agents who can assist with any aspect of home
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`buying or selling. Give us a call at 855-205-0599.”); ECF 114-4, Ex. 4, at 4 (“If you are looking for
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`a more cost-effective, efficient, and customer-focused way to buy or sell your home, we are here for
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`you. Have questions? We would love to help! Give us a call at 855 -342-4739.”).
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`Thus, all the relevant considerations weigh in favor of finding REX’s false statements were
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`promoted in commercial speech.
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`3.
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`NAR Does Not Challenge Protected Speech, and Noerr-Pennington Does Not
`Apply
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`In its motion, REX conflates the statements in NAR’s counterclaim that were published on
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`REX’s website, and those that were not. But that distinction is important. To be absolutely clear,
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`NAR’s counterclaim is based on the false advertisements that were promoted on REX’s website.
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`NAR’s counterclaim does mention statements REX made elsewhere, but only to show that
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`(1) REX’s marketing is false, e.g., ECF 114 (Counterclaim) ¶¶ 16-17 (quoting ECH 114-6, Ex. 6)
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`(acknowledging that REX’s customers pay buyer agent commissions); or (2) that REX’s false
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`advertising was specifically intended to harm NAR’s reputation, see, e.g., ECF 114-6, Ex. 6, at 1-2
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`(“We operate independent from the MLS. We want to keep the consumer in control . . . . Our view
`
`on the MLS has been that it’s an agent-driven process.”). Because the only statements that NAR
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`challenges are statements made on REX’s website in false advertisements, First Amendment
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`considerations are not relevant.
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`Similarly, it is simply false, as REX claims, that “[m]ost of the exhibits attached to NAR’s
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`counterclaim are communications related to petitioning activity that cannot give rise to a Lanham
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`Act claim.” ECF 115 at 17. NAR’s counterclaim includes fourteen exhibits, and only four of them
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`NAR’S OPP. TO MOTION
`TO DISMISS COUNTERCLAIM
`Case No. 2:21-cv-00312-TSZ 7
`
`
`
`QUINN EMANUEL URQUHART & SULLIVAN, LLP
`1109 First Avenue, Suite 210
`Seattle, WA 98101
`(206) 905-7000
`
`

`

`Case 2:21-cv-00312-TSZ Document 117 Filed 03/07/22 Page 12 of 19
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`relate to litigation or REX’s efforts to petition the government. Those four do not contain the false
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`2
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`advertising that is the basis of NAR’s counterclaim. (Instead, as discussed above, they either show
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`the challenged advertising is false or that it harmed NAR.)
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`4
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`B.
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`NAR Has Standing to Challenge REX’s False Advertisements
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`5
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`6
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`1.
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`NAR Has Article III Standing
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`In claiming that NAR does not have Article III standing because it failed to allege injury in
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`7
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`fact, REX ignores both the allegations in NAR’s counterclaim and established precedent concerning
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`8
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`what a plaintiff must allege to establish injury in fact.
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`9
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`As described in NAR’s counterclaim, “NAR is the owner of the REALTOR® registered
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`collective membership mark, which can only be used by real estate professionals who are members
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`of NAR.” ECF 114 (Counterclaim) ¶ 54. “NAR publishes the Handbook on Multiple Listing Policy,
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`which includes model enabling provisions for the establishment and operation of a multiple listing
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`service[] by associations of REALTORS®.” Id. ¶ 55. “The mandatory rules in the Handbook on
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`Multiple Listing Policy establish, among other things, a standard framework for MLS Participants
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`to share listings data, including the information fields to be shared with other brokers to deliver
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`listings via websites, mobile apps, and audio devices.” Id. ¶ 56.
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`REX’s false advertisements draw a direct comparison between REX’s own fees and those
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`purportedly charged by other agents as a result of NAR’s rules. As NAR explained in its
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`19
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`counterclaim, REX “claims that its ‘services cost significantly less when compared with those of
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`20
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`traditional real estate agents,’ and ‘[o]ne reason is that most working real estate agents are members
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`21
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`of the National Association of Realtors (NAR).’” ECF 114 (Counterclaim) ¶ 61 (quoting ECF 114-
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`22
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`3, Ex. 3, at 2). REX goes so far as to “claim[] that it ‘poses a direct challenge to the dual commission
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`23
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`structure set by NAR, charging sellers a flat 2-2.5% listing fee without sacrificing any of the services
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`offered to the buyer or seller.’” Id. (quoting ECF 114-3, Ex. 3, at 2). And REX expressly blames
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`25
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`NAR’s rules for the fact that REALTORS® purportedly charge higher commissions then REX. See
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`26
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`ECF 114 (Counterclaim) ¶ 28 (“Critically, we exist outside what is known as the Multiple Listing
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`27
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`Service (MLS) system, the loose confederation of realtor organizations that maintain artificially
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`high fees.”); id. ¶ 29 (“By more efficiently pairing sellers and buyers, we can reduce costs for all
`
`
`
`NAR’S OPP. TO MOTION
`TO DISMISS COUNTERCLAIM
`Case No. 2:21-cv-00312-TSZ 8
`
`
`
`QUINN EMANUEL URQUHART & SULLIVAN, LLP
`1109 First Avenue, Suite 210
`Seattle, WA 98101
`(206) 905-7000
`
`

`

`Case 2:21-cv-00312-TSZ Document 117 Filed 03/07/22 Page 13 of 19
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`involved--REX charges a fixed 2% covering both sides of the transaction instead of the 5 -6%
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`2
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`customarily enforced by MLS