REX - Real Estate Exchange Inc v. Zillow Inc
2:21-cv-00312
| W.D. Wash. | Jul 21, 2023Background
- REX sued NAR and Zillow entities alleging antitrust, false advertising, Washington Consumer Protection Act, and defamation claims; multiple experts were designated for each side.
- NAR and Zillow retained rebuttal experts: Dr. Jeffrey Prince (NAR) and Dr. Steven Tadelis (Zillow) to rebut REX’s antitrust expert Dr. David Evans; issues included REX’s alleged status as an industry “disruptor,” whether commissions are supracompetitive, and criticisms of regression analyses.
- NAR and Zillow also retained damages rebuttal experts: Dr. Jeffrey Stec (NAR) and Michael Kennelly (Zillow), who addressed REX’s claimed damages and business valuation issues for a digital startup.
- Zillow moved to exclude testimony by marketing expert Dr. Aradhna Krishna, challenging her use of sociolinguistic concepts (e.g., ‘‘othering’’) and her labeling opinions about website tabs.
- The court applied Rule 702 and Daubert principles, finding most challenges attacked weight and methodology rather than admissibility; it denied REX’s motions to exclude Prince, Tadelis, Stec, and Kennelly, and granted in part Zillow’s motion to exclude certain portions of Dr. Krishna’s testimony (excluding ‘‘othering’’/discrimination material but admitting labeling opinions).
Issues
| Issue | Plaintiff's Argument (REX) | Defendant's Argument (NAR / Zillow) | Held |
|---|---|---|---|
| Exclude Dr. Prince and Dr. Tadelis (antitrust rebuttal) | Their analyses are methodologically flawed (e.g., placebo not significant at 5%); regressions unreliable | Experts are qualified; methods relevant and sound; critiques go to weight at trial | Denied — admissible; challenges go to weight, not exclusion |
| Exclude Dr. Stec and Mr. Kennelly (damages rebuttal) | Not qualified to value digital startups; Stec mischaracterized REX’s pageview evidence | Both have experience valuing businesses/startups; opinions address alternative causes of REX’s results | Denied — qualified; disputes suitable for cross-examination |
| Exclude Dr. Krishna on ‘‘othering’’ and labeling | (Zillow argues) "Othering" testimony is prejudicial/misleading; labeling opinions unnecessary | Krishna is qualified as marketing expert; labeling opinions relevant to claims; not required to be survey-based | Granted in part/Denied in part — "othering" discrimination testimony excluded under Rule 403; labeling opinions admitted |
| Whether methodological/statistical imperfections require exclusion | Flaws (e.g., lack of statistical significance) render opinions inadmissible | Reliability and relevance govern admissibility; methodological flaws affect weight | Courts refuse to gatekeep by demanding specific p-values; methodological disputes go to the jury |
Key Cases Cited
- Daubert v. Merrell Dow Pharmaceuticals, 509 U.S. 579 (1993) (trial judge must ensure expert testimony rests on reliable foundation and is relevant)
- City of Pomona v. SQM North America Corp., 750 F.3d 1036 (9th Cir. 2014) (challenges to expert testimony that go to weight are for the factfinder)
- Obrey v. Johnson, 400 F.3d 691 (9th Cir. 2005) (admissibility under Rule 702 does not depend solely on statistical strength)
- United States v. Hitt, 981 F.2d 422 (9th Cir. 1992) (evidence may be excluded under Rule 403 when probative value is substantially outweighed by unfair prejudice)