MRED makes bid to compel arbitration in battle with Zillow 

Days before a scheduled preliminary injunction hearing in Zillow's lawsuit against Chicago-based Midwest Real Estate Data (MRED) and Compass, the multiple listing service made a last-minute bid to compel arbitration rather than continue proceedings in court.

Meanwhile, a judge has lifted a stay in the class-action lawsuit known as Taylor.

MRED moves to compel arbitration

In court documents filed on June 29, MRED argued that Zillow had agreed to arbitrate any disputes that came out of its IDX and VOW agreements upon entering its contract with the MLS.

Part of Zillow's argument in filing its antitrust lawsuit, the MLS said, was that its claims against the defendants were not solely related to these agreements — a concession that reveals the previous arbitration agreement should apply, MRED argued.

A squabble over contracts, terminology: MRED disputes Zillow's argument that the arbitration clauses are unenforceable because of ambiguity in the agreement's language.

"The nature of intended third-party beneficiary status, as well as treatises and case law, all confirm that MRED is entitled to enforce the arbitration clauses," the filing said.

MRED likewise argued that its "Participant Agreement," which deals with access to the MLS's listing database, is entirely separate from agreements for IDX and VOW access (the agreements at issue in this case) — and those agreements include mandatory arbitration clauses, which Zillow is contractually obligated to abide by.

No preliminary injunction needed, MRED says: MRED also asked the court to stay all non-arbitrable claims and to deny Zillow's preliminary injunction request. The MLS argued that the court has already preserved "the status quo" by issuing a temporary restraining order against MRED last month — a move that granted Zillow access to its data feed in the Chicagoland market — and that a preliminary injunction is therefore unnecessary.

If its request to compel arbitration is granted, MRED further urged the court to stay any other non-arbitrable claims in the meantime so as to not "intrude on the arbitrator's jurisdiction." 

What Zillow had to say: "MRED wants to move this case behind closed doors, away from the public scrutiny that anticompetitive conduct deserves," a Zillow spokesperson said in a statement to Real Estate News. "The public has a right to know what MRED and Compass did to Chicagoland buyers and sellers, and a right to see it resolved in open court."

MRED did not immediately respond to requests for comment on its latest legal filing.

How we got here: Zillow sued MRED and Compass in May over alleged "collusion" to hide listings from consumers and agents. The next week, MRED made good on threats to cut Zillow's data feed access, claiming that the portal's listing access standards violate MRED's own IDX rules. The data feed shutdown continued until a judge granted Zillow's temporary restraining order request a couple of days later.

The parties are scheduled to appear in a Chicago courthouse July 1-2 for a preliminary injunction hearing to determine whether Zillow can enforce its listing access standards — which ban listings that have been marketed to a select group before being marketed more broadly — while also maintaining access to MRED's data feed.

However, the court's response to MRED's latest request could change that schedule.

Litigation in Taylor case poised to proceed

In other legal news, a judge has lifted a stay in the class-action lawsuit known as Taylor. The case filed last September was brought by a Portland homebuyer who sued Zillow over its "Flex" agent program, alleging that the portal deceives buyers into contacting partner agents — and in doing so, artificially inflates commissions.

Now that the stay on the case has been lifted, litigation against Zillow and other defendants can continue. That list of defendants was recently reduced by two when the plaintiffs voluntarily dismissed claims last week against The Real Brokerage and the Real-affiliated The Frano Team. Though the plaintiffs also named eXp Realty as a defendant earlier this year, the court has not yet approved that addition.

Zillow, meanwhile, is waiting for the judge to rule on whether the case will continue. "We look forward to a decision on our motion to dismiss," a Zillow spokesperson said.