BrokerageReal Estate

Judge orders NAR execs to turn over documents in REX case

Court grants, in part, REX’s motion to compel requiring NAR executives including CEO Bob Goldberg to turn over relevant evidence

Four top National Association of Realtors (NAR) executives, including CEO Bob Goldberg, will be required to turn over relevant evidence in the ongoing lawsuit against NAR and Zillow filed by REX Real Estate.

Judge Thomas Zilly of the U.S. District Court in Seattle granted, in part, REX’s motion to compel NAR to comply with court’s “electronically stored information” order.

In REX’s motion filed in late August, the discount brokerage’s attorneys requested that the court add seven additional data custodians to provide information relevant to the case. The attorneys for REX argued that all seven of the executives were responsible for NAR’s response to online competition and for developing and enforcing NAR policies “limiting both how homes are listed online and the negotiation of commissions.” In addition, the seven custodians proposed by REX are already ESI custodians in the two other anti-trust lawsuit the Realtor trade group is facing, Moehrl and Sitzer/Burnett.

Of the seven custodians, Zilly agreed to add four: Katherine “Katie” Johnson (NAR’s general counsel and chief member experience officer), Kevin Milligan (NAR’s former vice president of board policy and programs), Clifford Niersbach (NAR’s former associate general counsel and vice president of board policy and programs), as well as Goldberg.

In the order issued Thursday, Zilly wrote that adding these four custodians “will not impose a significant burden on NAR and is proportional to the needs of the case,” reasoning that the executives he listed are likely to have information “relevant to the central issues implicated in this action.”

REX filed the anti-trust lawsuit in March 2021 against the trade group and Zillow, alleging anti-trust violations related to an NAR rule, known as the no-commingling rule, that prompted Zillow to separate non-MLS listings from MLS listings on its website, including listings from REX.

In early May, REX laid off most of its remaining employees. In an email, CEO Jack Ryan and COO Lynley Sides, who co-founded the brokerage, urged most agents to hang their sales license elsewhere, and announced the closing of the firm’s physical offices in Austin and Woodland Hills, California. It has since blamed Zillow and NAR for the shuttering of its operation.

Despite granting part of REX’s motion to compel, Zilly denied REX’s motion for NAR to turn over all documents relating to or produced by NAR in the Moehrl and Sitzer/Burnett cases.

Both the Moehrl and the Sitzer/Burnett cases deal with what REX refers to as the Realtor association’s “buyer broker commission rule.” REX argues that this rule, which requires listing brokers to offer buyer brokers a commission to list a property in a Realtor-affiliated MLS, and NAR’s no-commingling rule both aim to maintain artificially high real estate commissions.

In response to this argument, Zilly wrote: “[REX’s request] is overly broad, and the Court is not persuaded that all documents produced by NAR in those actions are relevant to this case.”

REX Real Estate and NAR did not return a request for comment at the time of publication.

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