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`Case 2:21-cv-00312-TSZ Document 173 Filed 10/11/22 Page 1 of 17
`
`The Honorable Thomas S. Zilly
`
`UNITED STATES DISTRICT COURT
`WESTERN DISTRICT OF WASHINGTON
`AT SEATTLE
`
`REX - REAL ESTATE EXCHANGE, INC.,
`Plaintiff,
`
`v.
`ZILLOW, INC., et al.,
`Defendants.
`
`Case No. 2:21-CV-00312-TSZ
`ZILLOW DEFENDANTS’
`OPPOSITION TO PLAINTIFF’S
`MOTION TO COMPEL ZILLOW TO
`PRODUCE DOCUMENTS
`NOTE ON MOTION CALENDAR:
`October 14, 2022
`
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`
`
`ZILLOW DEFENDANTS’ OPPOSITION TO
`PLAINTIFF’S MOTION TO COMPEL
`No. 2:21-CV-00312-TSZ
`
`
`
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`ORRICK, HERRINGTON & SUTCLIFFE LLP
`
`701 Fifth Avenue, Suite 5600
`Seattle, Washington 98104-7097
`+1 206 839 4300
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`
`
`I.
`II.
`
`III.
`
`
`
`
`
`Case 2:21-cv-00312-TSZ Document 173 Filed 10/11/22 Page 2 of 17
`
`Table of Contents
`FACTUAL BACKGROUND ........................................................................................ 2
`ARGUMENT ................................................................................................................. 3
`REX’s Complaint Excludes FSBO Homes from the Relevant Market for
`A.
`Brokerage Services, Rendering FSBO Data Irrelevant to the Issue of
`Harm to Competition. ......................................................................................... 3
`FSBO Data Is Not Necessary for REX to Prove Its Own Harm. ....................... 8
`B.
`Producing FSBO Data is Not Proportional to the Case. .................................... 8
`C.
`CONCLUSION ............................................................................................................ 11
`
`
`
`ZILLOW DEFENDANTS’ OPPOSITION TO
`PLAINTIFF’S MOTION TO COMPEL
`No. 2:21-CV-00312-TSZ
`
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`- i -
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`ORRICK, HERRINGTON & SUTCLIFFE LLP
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`701 Fifth Avenue, Suite 5600
`Seattle, Washington 98104-7097
`+1 206 839 4300
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`Case 2:21-cv-00312-TSZ Document 173 Filed 10/11/22 Page 3 of 17
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`
`
`TABLE OF AUTHORITIES
`
`
`
`Page(s)
`
`Cases
`Anderson v. Aset Corp.,
`329 F. Supp. 2d 380 (W.D.N.Y. 2004) ..................................................................................6
`Avila v. Bank of Am.,
`No. 17-cv-00222-HSG, 2017 WL 4168534 (N.D. Cal. Sep. 20, 2017) .................................6
`In re B & J Inc.,
`No. 6:19-CV-01440, 2021 WL 5622118 (W.D. La. Nov. 30, 2021) .....................................7
`Bolding v. Banner Bank,
`No. C17-0601RSL, 2020 WL 3605593 (W.D. Wash. July 2, 2020) .....................................3
`CollegeNET, Inc. v. Common Application, Inc.,
`711 Fed. Appx. 405 (9th Cir. 2017) .......................................................................................7
`In re eBay Seller Antitrust Litig.,
`No. C09-0735RAJ, 2009 WL 10677051 (W.D. Wash. Aug. 17, 2009) ................................4
`FTC v. Qualcomm Inc.,
`969 F.3d 974 (9th Cir. 2020) ......................................................................................3, 4, 7, 8
`Gilmour v. Gates, McDonald & Co.,
`382 F.3d 1312 (11th Cir. 2004) ..............................................................................................6
`Hall v. Marriott Int’l, Inc.,
`No. 3:19-cv-01715-JLS-AHG, 2021 WL 1906464 (S.D. Cal. May 12, 2021) ......................7
`Ivy Hotel San Diego, LLC v. Houston Cas. Co.,
`No. 10cv2183-L (BGS), 2011 WL 13240367 (S.D. Cal. Oct. 20, 2011) ...............................7
`New Park Entm’t LLC v. Elec. Factory Concerts, Inc.,
`No. Civ.A. 98-775, 2000 WL 62315 (E.D. Pa. Jan. 13, 2000).......................................4, 8, 9
`Oahu Gas Serv., Inc. v. Pac. Res., Inc.,
`838 F.2d 360 (9th Cir. 1988) ..................................................................................................7
`Philips N. Am., LLC v. Summit Imaging Inc.,
`No. C19-1745JLR, 2020 WL 1515624 (W.D. Wash. Mar. 30, 2020) ...................................6
`Radio Music License Comm., Inc. v. Glob. Music Rights, LLC,
`No. CV 19-3957 TJH (ASx), 2020 WL 7636281 (C.D. Cal. Jan. 2, 2020) .......................4, 8
`Strickland Real Estate Holdings, LLC v. Texaco, Inc.,
`No. C16-0653-JCC, 2016 WL 7243711 (W.D. Wash. Dec. 15, 2016) ..................................9
`T-Mobile USA, Inc. v. Huawei Device USA, Inc.,
`No. C14-013151 RAJ, 2016 WL 1597102 (W.D. Wash. Apr. 20, 2016) ..............................3
`
`ZILLOW DEFENDANTS’ OPPOSITION TO
`PLAINTIFF’S MOTION TO COMPEL
`No. 2:21-CV-00312-TSZ
`
`
`- ii -
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`ORRICK, HERRINGTON & SUTCLIFFE LLP
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`701 Fifth Avenue, Suite 5600
`Seattle, Washington 98104-7097
`+1 206 839 4300
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`Case 2:21-cv-00312-TSZ Document 173 Filed 10/11/22 Page 4 of 17
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`
`
`Twin City Sportservice, Inc. v. Charles O. Finley & Co., Inc.,
`676 F.2d 1291 (9th Cir. 1982) ................................................................................................7
`Vident v. Dentsply Int’l, Inc.,
`No. SA CV 06-1141 PSG (ANx), 2008 WL 4384124
`(C.D. Cal. Aug. 29, 2008) ......................................................................................................4
`Statutes
`15 U.S.C. § 15 ..............................................................................................................................8
`Other Authorities
`Fed. R. Civ. P. 26(b) .............................................................................................................3, 8, 9
`
`ZILLOW DEFENDANTS’ OPPOSITION TO
`PLAINTIFF’S MOTION TO COMPEL
`No. 2:21-CV-00312-TSZ
`
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`- iii -
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`ORRICK, HERRINGTON & SUTCLIFFE LLP
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`701 Fifth Avenue, Suite 5600
`Seattle, Washington 98104-7097
`+1 206 839 4300
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`Case 2:21-cv-00312-TSZ Document 173 Filed 10/11/22 Page 5 of 17
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`
`
`REX’s numerous discovery requests for listings-related data are massively overbroad
`and immensely burdensome. Nonetheless, after extensive meeting and conferring regarding
`those requests, Zillow agreed that it would produce data regarding MLS and REX property
`listings in hundreds of Metropolitan Statistical Areas (“MSAs”), from 2017 to present, as well
`as data regarding visitor views related to those listings. That comprises millions of records. And
`from those records, REX can assess consumer viewings of its listings, as well as multiple
`millions of MLS listings, both before Zillow’s change to the two-tab display, and after. REX
`does not object to Zillow’s production of those records. Instead, it wants more; this time, REX
`seeks data relating to for-sale-by-owner (“FSBO”) listings on Zillow’s websites.
`REX claims that it is entitled to all of the listings and engagement data for FSBO homes
`in all the same geographies for which Zillow has produced REX and MLS data. Yet, FSBO data
`is clearly irrelevant to REX’s affirmative claims because the antitrust market REX defined in its
`Complaint is limited to “brokered” transactions which, by definition, exclude FSBO sales. And
`REX does not need FSBO data to show harm to REX, a point that REX admits in its Motion.
`Instead, REX wants these additional data records because they may show “an analogous” decline
`in the number of views of FSBO listings. See Mot. to Compel at 4, ECF No. 162. That, however,
`is far from the relevancy showing required for production, particularly given the significant
`burden it would impose on Zillow. Accordingly, REX’s Motion should be denied.
`First, FSBOs are outside the relevant market REX defined for purposes of its antitrust
`claim, and thus any impact on FSBOs is irrelevant to assessing harm to competition in this
`litigation. In its Complaint, REX defined a market for “brokerage services” that on its face
`excludes FSBOs. There are no allegations in the Complaint that FSBOs compete with REX or
`other participants in REX’s alleged market for brokerage services. Because harm to competition
`must occur in the same relevant market as the alleged anticompetitive conduct, and because
`REX has alleged a market that excludes FSBOs, FSBO data is irrelevant.
`Second, data regarding FSBO listings is not needed to show alleged harm to REX. REX
`alleges that Zillow’s two-tab display has impacted REX’s listings. Zillow has agreed to
`
`ZILLOW DEFENDANTS’ OPPOSITION TO
`PLAINTIFF’S MOTION TO COMPEL
`No. 2:21-CV-00312-TSZ
`
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`- 1 -
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`ORRICK, HERRINGTON & SUTCLIFFE LLP
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`701 Fifth Avenue, Suite 5600
`Seattle, Washington 98104-7097
`+1 206 839 4300
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`Case 2:21-cv-00312-TSZ Document 173 Filed 10/11/22 Page 6 of 17
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`produce—and is producing—data that directly addresses any impact that its two-tab display may
`have had on REX’s listings, which REX concedes it can use to evaluate its own harm. Because
`REX is not a FSBO and does not have FSBO listings, it is irrelevant to REX’s claims whether
`FSBOs have experienced any change since the adoption of the two-tab display.
`Third, the FSBO data that REX has requested is overly burdensome for Zillow to
`produce and disproportionate to the issues in the case. At minimum, gathering the requested
`FSBO data would involve multiple Zillow employees and take up multiple days of each
`employee’s time in addition to their already-existing daily workloads. Given that REX has
`received reams of data regarding its own listings and MLS listings, the burden Zillow would
`incur in producing FSBO data far outweighs any benefit that REX would get from the production
`of this additional, and irrelevant, data.
`
`I.
`
`FACTUAL BACKGROUND
`REX served Zillow with over fifty (50) Requests for Production seeking an extensive
`amount of information and data, including “all data on consumer and real estate brokerage usage
`of Zillow sites” as well as information on daily views and showing requests “for each listing
`(REX and all other listings as well) in REX markets.” See Mot. at 2 (emphasis added). After
`receiving Zillow’s responses and objections to these massively overbroad requests, REX
`narrowed its requests to two tranches of data it wanted from Zillow, “listings data” and “website
`activity” data. Declaration of Laura Najemy, October 11, 2022 (“Najemy Decl.”), Ex. 1. These
`two tranches of data became the focal point of the parties’ negotiations concerning Zillow’s data
`production, superseding several of REX’s requests for production. Id., Ex. 2.
`Zillow agreed to produce information relating to REX listings and those of hundreds of
`Multiple Listing Services (“MLS”)—the MLSs that serviced the same geographies as REX. Id.,
`Ex. 3. Throughout the meet and confer process, however, Zillow made clear that FSBO data
`was not relevant to the issues in the litigation because FSBOs are not in the market that REX
`defined in its Complaint. See ECF No. 163-3; ECF No. 163-4. Accordingly, Zillow has never
`agreed to production of such data.
`
`ZILLOW DEFENDANTS’ OPPOSITION TO
`PLAINTIFF’S MOTION TO COMPEL
`No. 2:21-CV-00312-TSZ
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`- 2 -
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`ORRICK, HERRINGTON & SUTCLIFFE LLP
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`701 Fifth Avenue, Suite 5600
`Seattle, Washington 98104-7097
`+1 206 839 4300
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`Case 2:21-cv-00312-TSZ Document 173 Filed 10/11/22 Page 7 of 17
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`Despite multiple meet and confers on various issues, REX never again raised FSBO data
`until the eve of Zillow’s data productions. Those productions, on September 21, 2022 and
`September 30, 2022, included millions of records from 2017 to present for MLSs and REX in
`hundreds of MSAs. See Declaration of Tim Hunt, October 11, 2022 (“Hunt Decl.”), ¶ 7. The
`parties met and conferred on September 20 and Zillow again re-stated its position that FSBO
`data is irrelevant to this litigation and overly burdensome for Zillow to produce, before reaching
`impasse on the issue.
`
`II.
`
`ARGUMENT
`Parties are only entitled to discovery of “nonprivileged matter[s] that [are] relevant to
`any party’s claim or defense and proportional to the needs of the case[.]” Fed. R. Civ. P.
`26(b)(1) (emphasis added). Whether a matter is “relevant” is determined by the parties’
`pleadings. See T-Mobile USA, Inc. v. Huawei Device USA, Inc., No. C14-013151 RAJ, 2016
`WL 1597102, at *2–*3 (W.D. Wash. Apr. 20, 2016) (granting Huawei’s motion for a protective
`order noting that “T-Mobile's requests and interrogatories are not relevant to any claim or
`defense in this case”). Even REX acknowledges this requirement. Mot. at 6 (“At this juncture,
`the test is whether the requested information is relevant based on the pleadings. . . .” (emphasis
`added)). Discovery that veers into “side shows” or collateral issues is not permitted. See
`Bolding v. Banner Bank, No. C17-0601RSL, 2020 WL 3605593, at *2 (W.D. Wash. July 2,
`2020) (holding that information sought by defendant related to a “collateral issue” that was not
`“relevant to any claim or defense asserted in [the] litigation”). REX’s requested discovery is
`nothing more than an unjustified fishing expedition.
`
`A.
`
`REX’s Complaint Excludes FSBO Homes from the Relevant Market for
`Brokerage Services, Rendering FSBO Data Irrelevant to the Issue of Harm
`to Competition.
`To have any bearing on an antitrust case, discovery regarding harm must focus on the
`relevant market because harm to competition must occur within the same relevant market as the
`alleged anticompetitive conduct. See FTC v. Qualcomm Inc., 969 F.3d 974, 991 (9th Cir. 2020)
`(“Under § 1, ‘the plaintiff has the initial burden to prove that the challenged restraint has a
`
`ZILLOW DEFENDANTS’ OPPOSITION TO
`PLAINTIFF’S MOTION TO COMPEL
`No. 2:21-CV-00312-TSZ
`
`
`- 3 -
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`ORRICK, HERRINGTON & SUTCLIFFE LLP
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`701 Fifth Avenue, Suite 5600
`Seattle, Washington 98104-7097
`+1 206 839 4300
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`Case 2:21-cv-00312-TSZ Document 173 Filed 10/11/22 Page 8 of 17
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`substantial anticompetitive effect that harms consumers in the relevant market.’” (emphasis
`added) (citation omitted)). The analysis of a defendant’s “business practices and their
`anticompetitive impact” should not “look[] beyond [the] [relevant] markets[.]” Id. at 992.
`Given this requirement, in antitrust discovery disputes such as the instant Motion, courts
`determine relevance based on the relevant market as pled in the complaint. See, e.g., Radio
`Music License Comm., Inc. v. Glob. Music Rights, LLC, No. CV 19-3957 TJH (ASx), 2020 WL
`7636281, at *5 (C.D. Cal. Jan. 2, 2020) (“In an antitrust case, courts generally limit discovery
`to the ambit of the applicable market.”); In re eBay Seller Antitrust Litig., No. C09-0735RAJ,
`2009 WL 10677051, at *3 (W.D. Wash. Aug. 17, 2009) (narrowing plaintiffs’ requested
`discovery because the court could not “fathom the relevance of information related to online
`payment systems generally” when the plaintiffs defined the relevant market to be online auction
`services and person-to-person payment systems); Vident v. Dentsply Int'l, Inc., No. SA CV 06-
`1141 PSG (ANx), 2008 WL 4384124, at *2 (C.D. Cal. Aug. 29, 2008) (“[T]he definition of the
`relevant market in [this antitrust] case determines the scope of allowable discovery.”); New Park
`Entm’t LLC v. Elec. Factory Concerts, Inc., No. Civ.A. 98-775, 2000 WL 62315, at *6 (E.D.
`Pa. Jan. 13, 2000) (denying motion to compel “information regarding nonmusical events”
`because the information was not relevant to plaintiff’s allegations where plaintiff defined the
`relevant market as “[t]he popular music concert promotion business”).
`In bringing its Complaint, REX determined what it believes is the relevant market. That
`market, as pled, does not include FSBOs. REX’s Complaint defines the relevant market as “the
`market for the provision of real estate brokerage services to sellers and buyers of residential
`real estate in local markets throughout the country where REX operates.” Am. Compl. ¶ 119,
`ECF No. 99 (emphasis added). On its face, REX’s market includes only those firms that provide
`brokerage services. As set forth in REX’s Complaint, there are three requirements that a
`purported market participant must meet in order to be considered “in” the alleged market:
` First, the participant must compete with NAR, MLS members, and REX “in the market
`for the provision of real estate brokerage services to sellers and buyers of residential
`
`ZILLOW DEFENDANTS’ OPPOSITION TO
`PLAINTIFF’S MOTION TO COMPEL
`No. 2:21-CV-00312-TSZ
`
`
`- 4 -
`
`ORRICK, HERRINGTON & SUTCLIFFE LLP
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`701 Fifth Avenue, Suite 5600
`Seattle, Washington 98104-7097
`+1 206 839 4300
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`Case 2:21-cv-00312-TSZ Document 173 Filed 10/11/22 Page 9 of 17
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`real estate in local markets throughout the country where REX operates.” Id. (emphasis
`added).
` Second, the participant must “compete to attract buyers and/or sellers to facilitate
`residential real estate transactions in return for fees, often in the form of percentage-
`based commissions.” Id. (emphasis added).
` And third, the participant “must maintain licenses to provide residential real estate
`brokerage services.” Id. (emphasis added).
`FSBOs do not meet any of these three criteria alleged by REX. Nowhere does REX
`explain—in its Motion, Complaint, or otherwise—how FSBOs compete with brokers for
`brokerage services, and that’s because they don’t. Homeowners selling their own homes do not
`offer their services to other individuals looking to buy or sell homes, as brokers like REX do.
`Additionally, as REX explains in its Complaint, homes that are for sale by owner are represented
`by individual homeowners, not licensed residential real estate agents. See, e.g., Am. Compl.
`¶ 95 (“Consumers who purchase FSBOs must negotiate directly with the homeowner.”). While
`a homeowner with a FSBO listing may well be competing with other listings—including those
`represented by licensed agents—in a different market for the purchase and sale of homes, that
`is distinct from competing to provide brokerage services to consumers who wish to buy or sell
`homes.
`Contradicting the allegations in the operative Complaint, REX now attempts to amend
`its Complaint through its Motion, claiming that “the services provided by homeowners who list
`their homes for sale without a seller-agent are in the relevant market.” Mot. at 6 (emphasis
`added). But this ignores the fact that the alleged market in REX’s Complaint requires
`transactions in which there is both a buyer and seller agent. Am. Compl. ¶ 119 (“NAR, through
`its members, and MLS members compete with REX in the market for the provision of real estate
`brokerage services to sellers and buyers of residential real estate. . . .” (emphasis added)). And
`the new claim that FSBOs somehow compete with REX also ignores that REX’s Complaint
`expressly explains how REX’s business operations are fundamentally different than FSBO
`
`ZILLOW DEFENDANTS’ OPPOSITION TO
`PLAINTIFF’S MOTION TO COMPEL
`No. 2:21-CV-00312-TSZ
`
`
`- 5 -
`
`ORRICK, HERRINGTON & SUTCLIFFE LLP
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`701 Fifth Avenue, Suite 5600
`Seattle, Washington 98104-7097
`+1 206 839 4300
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`Case 2:21-cv-00312-TSZ Document 173 Filed 10/11/22 Page 10 of 17
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`transactions:
`
`To the extent that consumers view homes in the “other” category,
`they will see REX homes alongside FSBOs and foreclosures. But
`those properties present a buyer experience easily distinguished
`from purchasing a REX home. Consumers who purchase FSBOs
`must negotiate directly with the homeowner. Buyers of REX
`homes negotiate with a licensed REX agent. And, in the event the
`buyer of a REX home does not already have an agent, REX will
`assign a separate, experienced agent to represent the buyer at no
`cost to buyer or seller.
`Am. Compl. ¶ 95. REX’s Complaint sets the bounds of discovery to which it is entitled, and
`there is no interpretation where FSBOs fit into REX’s market for brokerage services, as
`explained above.
`REX’s Motion is a transparent attempt to rewrite the relevant market alleged in its
`Complaint in an effort to make FSBO listings somehow relevant. However, courts routinely
`reject parties’ attempts to rewrite pleadings through motions practice. See, e.g., Philips N. Am.,
`LLC v. Summit Imaging Inc., No. C19-1745JLR, 2020 WL 1515624, at *7 (W.D. Wash. Mar.
`30, 2020) (“Philips cannot re-write their complaint in their opposition brief.”); Avila v. Bank of
`Am., No. 17-cv-00222-HSG, 2017 WL 4168534, at *4 (N.D. Cal. Sep. 20, 2017) (“Plaintiff
`cannot rewrite its complaint now in its opposition to the motion to dismiss. . . .”); Gilmour v.
`Gates, McDonald & Co., 382 F.3d 1312, 1315 (11th Cir. 2004) (“A plaintiff may not amend her
`complaint through argument in a brief opposing summary judgment.”); Anderson v. Aset Corp.,
`329 F. Supp. 2d 380, 383 (W.D.N.Y. 2004) (“[T]he complaint says what it says, and a
`memorandum of law is not a proper vehicle for rewriting or amending the complaint.”).
`Accordingly, REX should not be allowed to amend its Complaint and change the relevant market
`it has pled via its Motion.
`Unable to overcome that its Complaint on its face expressly defines a market that
`excludes FSBO transactions, REX instead points to the entirely irrelevant fact that NAR, in an
`earlier motion to dismiss, claimed that REX’s alleged market was “implausible.” See Mot. at 5.
`But whatever NAR thought of the market is beside the point. The operative document for
`defining the relevant market is REX’s Complaint, which makes clear that FSBO homes do not
`
`ZILLOW DEFENDANTS’ OPPOSITION TO
`PLAINTIFF’S MOTION TO COMPEL
`No. 2:21-CV-00312-TSZ
`
`
`- 6 -
`
`ORRICK, HERRINGTON & SUTCLIFFE LLP
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`701 Fifth Avenue, Suite 5600
`Seattle, Washington 98104-7097
`+1 206 839 4300
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`meet the three necessary criteria to be in that relevant market. See supra at 4-5 (setting forth
`requirements for REX’s alleged market). Nor does the fact that REX’s Complaint alleges harm
`to entities such as FSBOs, see ECF No. 98 at 16 n.6, mean that FSBOs are included in the
`relevant market. As the Ninth Circuit has explained, to be included in the same relevant market,
`products or services must compete with one another. See Qualcomm, 969 F.3d at 992–93. Since
`REX’s Complaint makes clear that REX does not compete with FSBOs for the provision of
`brokerage services, any alleged harm to FSBOs is irrelevant.
`REX should not be allowed to use discovery as a fishing expedition. Having pled a
`relevant market in its Complaint that clearly excludes FSBO transactions, REX cannot premise
`the need for discovery on the fact-based nature of market definition. Contrary to what REX
`argues in its Motion, it is not asking “to explore through discovery facts relevant to its own
`theories regarding the [defining] of [market],” see Mot. at 6 (brackets in original); instead, it is
`seeking discovery that contradicts its own theories. That is not allowed, and none of the cases
`REX cites suggest otherwise.1 Moreover, none of REX’s cited cases (none of which are antitrust
`cases) stand for the proposition that a party can take discovery contrary to the operative
`complaint just because the court may make a determination on the issue at some future point.2
`Because FSBOs are not in REX’s market for brokerage services as pled by REX, they are
`irrelevant to harm to competition (the purpose for which REX purportedly requests such data).
`REX’s request for FSBO data should be denied.
`
`
`1 See In re B & J Inc., No. 6:19-CV-01440, 2021 WL 5622118 (W.D. La. Nov. 30, 2021) (dispute regarding whether
`discovery related to the value of a barge should be permitted, and where no antitrust claims appear to have been at
`issue); Hall v. Marriott Int’l, Inc., No. 3:19-cv-01715-JLS-AHG, 2021 WL 1906464 (S.D. Cal. May 12, 2021)
`(dispute in false advertising case regarding statute of limitations, with no apparent antitrust claims); Ivy Hotel San
`Diego, LLC v. Houston Cas. Co., No. 10cv2183-L (BGS), 2011 WL 13240367 (S.D. Cal. Oct. 20, 2011) (insurance
`coverage dispute regarding breach of contract and breach of covenant of good faith and fair dealing, with no
`apparent antitrust claims). Notably, in Ivy Hotel the court allowed the plaintiff to explore “theories regarding the
`meaning of contractual terms,” id. at *3 (emphasis added), not “theories regarding the [defining] of [market],”
`which a plaintiff must plead and self-define in an antitrust case. Mot. at 6.
`2 Those cases cited by REX, in which courts have held that a merits decision regarding market definition was
`premature, are inapposite and were all raised in a different procedural posture than the instant discovery dispute.
`Cf. CollegeNET, Inc. v. Common Application, Inc., 711 Fed. Appx. 405 (9th Cir. 2017) (appeal from grant of motion
`to dismiss based on antitrust injury); Oahu Gas Serv., Inc. v. Pac. Res., Inc., 838 F.2d 360 (9th Cir. 1988) (appeal
`from judgment); Twin City Sportservice, Inc. v. Charles O. Finley & Co., Inc., 676 F.2d 1291 (9th Cir. 1982)
`(appeal from judgment).
`ZILLOW DEFENDANTS’ OPPOSITION TO
`PLAINTIFF’S MOTION TO COMPEL
`No. 2:21-CV-00312-TSZ
`
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`ORRICK, HERRINGTON & SUTCLIFFE LLP
`
`701 Fifth Avenue, Suite 5600
`Seattle, Washington 98104-7097
`+1 206 839 4300
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`Case 2:21-cv-00312-TSZ Document 173 Filed 10/11/22 Page 12 of 17
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`B.
`FSBO Data Is Not Necessary for REX to Prove Its Own Harm.
`REX must prove harm, if any, that it suffered in order to recover damages. See 15 U.S.C.
`§ 15 (“[A]ny person who shall be injured in his business or property by reason of anything
`forbidden in the antitrust laws may sue therefor . . . and shall recover threefold the damages by
`him sustained. . . .” (emphasis added)). REX is a licensed broker. Am. Compl. ¶ 39. It is not
`a FSBO. Whether or not there has been any effect on FSBO listings as a result of Zillow’s two-
`tab display is therefore entirely irrelevant to the actual question at issue: has REX been harmed,
`and what data may or may not demonstrate that.
`REX concedes in its Motion that it will be able to analyze the impact of Zillow’s display
`change on REX’s listings with data pertaining only to REX:
`
`REX can show the impact of Zillow’s display change on REX’s
`listings through a before and after analysis of the average number
`of views REX’s listings received by comparing, for example, the
`views of its listings across markets before and after Zillow’s
`display change.
`Mot. at 4 (emphasis added). This should be the end of the inquiry. Zillow has already agreed
`to provide, and has produced, data regarding REX’s listings. Nothing more is needed for REX
`to prove up its purported harm. REX’s request for FSBO data is unnecessary and should be
`denied.
`
`C.
`Producing FSBO Data is Not Proportional to the Case.
`Without any ability to link FSBO listings to REX’s own harm or damages, or harm to
`competition, see Qualcomm, 969 F.3d at 992 (“Parties whose injuries . . . are experienced in
`another market do not suffer antitrust injury.”), the only other purpose FSBO data could serve
`is to “corroborat[e] . . . REX’s position that the two-tab display proximately caused REX
`economic harm.” Mot. at 4. But discovery—even in antitrust cases such as this one—is not
`unlimited and must be proportional to the needs of the case. See Radio Music, 2020 WL
`7636281, at *2 (“[U]nder amended Rule 26(b), discovery must be ‘proportional to the needs of
`the case. . . .’ This proportionality requirement ‘is designed to avoid . . . sweeping discovery
`that is untethered to the claims and defenses in litigation.’” (internal citations omitted)); New
`
`ZILLOW DEFENDANTS’ OPPOSITION TO
`PLAINTIFF’S MOTION TO COMPEL
`No. 2:21-CV-00312-TSZ
`
`
`- 8 -
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`ORRICK, HERRINGTON & SUTCLIFFE LLP
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`701 Fifth Avenue, Suite 5600
`Seattle, Washington 98104-7097
`+1 206 839 4300
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`Park, 2000 WL 62315, at *6 (“This court agrees with the defendants that information regarding
`nonmusical events is not relevant to plaintiff’s allegations. If it has some marginal value, the
`burden and expense of producing the information outweighs the likelihood of finding relevant
`material.”); see also Fed. R. Civ. P. 26(b)(1). In assessing proportionality, courts consider
`factors including “the importance of the discovery in resolving the issues [in the litigation], and
`whether the burden or expense of the proposed discovery outweighs its likely benefit.” Fed. R.
`Civ. P. 26(b)(1).
`Here, because FSBO data is immaterial to the litigation, it cannot be said to go to the
`heart of any issue that REX has raised. Cf. Strickland Real Estate Holdings, LLC v. Texaco,
`Inc., No. C16-0653-JCC, 2016 WL 7243711, at *2 (W.D. Wash. Dec. 15, 2016) (granting
`motion to compel where discovery requests sought to establish contents of a lease that went “to
`the heart of th[e] dispute, albeit in a circumstantial manner”). Further, even assuming arguendo
`that there is any marginal relevance of FSBO data, which there is not, Zillow’s burden in
`producing such data far outweighs any marginal relevance. As explained below, production of
`this data would be a significant undertaking.
`REX has requested two separate sets of data pertaining to listings displayed on Zillow:
`
` “Listings Data,” i.e., data containing information such as date of listing, listing
`price, and property characteristics. To avoid unnecessary duplication where a
`listing is posted on Zillow without any substantive change, REX has requested
`that this data be de-duplicated to the best of Zillow’s ability. This means, for
`instance, that if a listing is posted on Zillow for 30 days but has only one change,
`such as going from an “Active” listing to a “Pending” listing, that would ideally
`translate to only two data points in Zillow’s data set rather than 30 points of
`data (one for each day).
` “Website Activity,” i.e., data regarding visitor views and searches for listings
`displayed on Zillow’s platforms. Unlike “listings data,” REX has requested
`daily data of a listing’s page views, unique visitors, appearance in search results,
`and connections between a listings viewer and agent. This means that Zillow
`is expected to produce “website activity” information for each day that a listing
`(from the sources that Zillow agreed to produce) is displayed on Zillow. A
`single listing could count for an inordinate number of “website activity” data
`points.
`Contrary to REX’s assertion, FSBO listings do not account for “likely no more than 6.2% of
`additional data,” Mot. at 8, but could instead account for far more than that, based on the method
`
`ZILLOW DEFENDANTS’ OPPOSITION TO
`PLAINTIFF’S MOTION TO COMPEL
`No. 2:21-CV-00312-TSZ
`
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`ORRICK, HERRINGTON & SUTCLIFFE LLP
`
`701 Fifth Avenue, Suite 5600
`Seattle, Washington 98104-7097
`+1 206 839 4300
`
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`in which REX has requested that Zillow identify and produce data. Simply, one FSBO listing
`does not equal only one additional data point. Because REX has requested that Zillow provide
`daily information regarding certain aspects of listings such as views and appearance in search
`results, a FSBO listing will necessarily generate more than one data point—one for each day
`that it has been on Zillow. See Hunt Decl. ¶¶ 10–12. For instance, homeowners are responsible
`for posting their FSBO listings on Zillow, and listings may cont