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Not for Publication

UNITED STATES DISTRICT COURT

DISTRICT OF NEW JERSEY

1
EJ MGT LLC,
Civil Action No. 18-584
Plaintff (JMV)(JBC)

V.

ZILLOW GROUP, INC., and ZILLOW, INC., OPINION

Defendants.

John Michael Vazpuez, U.S.D.J.

This case concerns antitrust allegations against a market leader in online real estate

information. Plaintiff EJ MGT LLC brings this action against Defendants Zillow Group, Inc., and

Zillow, Inc. (collectively, “Ziflow” or “Defendants”) for conspiracy to restrain trade under the

Sherman Act, 15 U.S.C. § 1, and the New Jersey Antitrust Act, N.J.S.A. 56:9-3. D.E. 22. Plaintiff

claims that Zillow illegally contracts with certain real estate brokers to alter those brokers’ property

listings’ estimated prices, called “Zestimates,” while not offering this option to other brokers,

agents, and property owners, such as Plaintiff. Currently pending before the Court is Defendants’

motion to dismiss Plaintiffs First Amended Complaint. D.E. 24. The Court reviewed all

submissions’ and considered this motion without oral argument pursuant to Federal Rule of Civil

Procedure 78(b) and Local Civil Rule 78.1(b). For the following reasons, Defendants’ motion to

dismiss is GRANTED.

Defendants’ brief in support of their motion to dismiss will be referred to as “Defs.’ Br.”
(D.E. 24); Plaintiff’s opposition to this motion will be referred to as “Pl.’s Opp.” (D.E. 29); and
Defendants’ reply to this opposition will be referred to as “Defs.’ Reply” (D.E. 17).
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I. BACKGROUND2

The Court included a comprehensive factual background in its February 28, 2019 Opinion,

D.E. 20, which the Court incorporates by reference here. By way of background, Plaintiff EJ

MGT is a New Jersey limited liability organization that is the owner of 142 Hoover Drive in

Cresskill, New Jersey (the “Property”). FAC ¶{ 19, 37. Zillow is a market leader in online real

estate information. Id. ¶ 2. Among other things, Zillow manages websites that serve as the central

database for all real estate listings (including those that are not for sale) in the United States.

Id. ¶} 51-59. For all listed properties, Zillow includes a Zestimate, which is Zillow’s own estimate

of the current market value of a home based on an algorithm that considers property facts (such as

location, lot size, square footage, number of bedrooms/bathrooms), tax assessments, prior

transactions (both of the particular property historically and neighboring properties), and user data.

Id. ¶J 59-61. Zillow represents that the Zestimate is the “starting point” for determining a home’s

value. Id. ¶ 62.

In January 2017, Plaintiff listed the Property for sale. Id. ¶ 108. Keller Williams served

as the broker and listing agent, and Zillow displayed the Property on its website. Id. ¶J 108-109.

Plaintiff alleges that “the difference between the [Property’s] Zestimate and the [Property’s] listing

price has impacted and/or informed [potential buyers’] decisions [] to [not] purchase [the

Property].” Id. ¶ 110. For example, on January 2, 2018, the Property was listed on Zillow for

$7,788,000. Id. ¶ 76(0. Immediately under the sale price, the Zestimate reflected a price of

2
The facts are derived from Plaintiff’s First Amended Complaint. D.E. 22 (“FAC”). When
reviewing a motion to dismiss, the Court accepts as true all well-pleaded facts in the complaint.
Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir. 2009). Additionally, a district court may
consider “exhibits attached to the complaint and matters of public record” as well as “an
undisputedly authentic document that a defendant attaches as an exhibit to a motion to dismiss if
the plaintiffs claims are based on the document.” Pension Ben. Guar Corp. v. White Consol.
Indus., Inc., 998 F.2d 1192, 1196 (3d Cir. 1993).

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$3,703,597. Ii Plaintiff alleges that certain unnamed “[p]otential buyers” have advised Plaintiff

that the difference between the Property’s listed price and its Zestimate “has impacted and/or

informed” their decision to not purchase the Property. Id. ¶ 110.

Plaintiff ffirther contends that after Plaintiff filed its original Complaint on January 15,

2018, Ziflow altered the placement of the Property’s Zestimate such that the Zestimate no longer

“appear[ed] at the top of the property page” under the listing price; instead, a link with “View

Zestimate” appeared (presumably providing the Zestimate if the link was selected),3 Id, ¶ 115-

116. Plaintiff also asserts that the Property’s Zestimate on April 11, 2018 fluctuated from

$3,649,959 to $6,988,251 to $3,751,865. Id. ¶ 119, Ex. D, E, F.4 As of March 25, 2019, the

Property’s Zestimate was $5,415,788. Id. ¶ 121. Plaintiff claims that it has not been able to sell

the Property to date, but acknowledges that the Property is currently being rented and is not

presently listed for sale. Id. ¶ 122.

The essence of Plaintiffs claim is that Zillow participated in an anticompetitive conspiracy

by contracting with certain brokers — “co-conspirator brokers” — to omit the Zestimates of

particular properties from under their listing prices. Id. ¶J 1,3. As noted, at the time of the original

Complaint, the Property’s Zestimate was listed directly below its sales price. Id. ¶MJ 10, 76(0.

Plaintiff alleges that Zillow entered into “Zestimate Agreements,” which allowed certain brokers

to relocate their properties’ Zestimates so that they did not appear directly under their properties’

In support of this allegation, Plaintiff cites to Exhibit B of its amended complaint, which Plaintiff
describes as a “screenshot of [the Property] listing following the filing of the original Complaint.”
FAC ¶ 116. However, Exhibit B is not a listing of the Property, but rather a listing of a completely
different property. See FAC, Ex. B.

Plaintiff also acknowledges that these Zestimates include the following language: “The list price
and Zestimate for [the Property) are very different, so we might be missing something.” FAC, Ex.
D, E, F.

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listing prices. Id. ¶J 15-16. Importantly, however, Zillow does not completely remove the

Zestimate for any listing. Id. ¶ 77. Even when it removes the Zestimate from under the listing

price, Zillow still makes the Zestimate available under “Zestimate details” on the property’s Zillow

page. Id.

Plaintiff contacted Zillow to remove the Property’s Zestimate from directly underneath the

Property’s listing price, but Zillow reffised. Id. A Zillow representative explained that “this feature

is only available on our premiere agent program for real estate agents” and forwarded Plaintiff

information on that program. Id. ¶ 78. The Zillow representative later clarified that “Zillow has

various partnerships with Agents, Brokerages, and Vendors that may display a listing page

differently than others.” Id. Plaintiff alleges that even premier agents cannot gain this preferential

treatment unless they are affiliated with a co-conspirator broker who has a Zestimate Agreement.

Id. ¶ 79. Plaintiff asserts that those brokers, agents, and individual homeowners who are not

associated with the co-conspirator brokers “are left no choice but to have Zestimates appear

prominently” on their properties’ Zillow pages, putting them at a distinct competitive disadvantage

and harming overall competition in the local and national real estate markets. Id. ¶‘jJ 16, 93.

II. PROCEDURAL HISTORY

Plaintiff filed its original Complaint on January 1, 2018 alleging five causes of action: (1)

conspiracy to restrain trade under Section 1 of the Sherman Act, 15 U.S.C. § 1; (2) conspiracy to

restrain trade under the New Jersey Antitrust Act, N,J.S.A. 56:9-3; (3) fraud under the New Jersey

Consumer Fraud Act (“NJCFA”), N.J.S.A. 56:8-I et seq.; (4) slander of title/product

disparagement under New Jersey common law; and (5) interference with prospective economic

advantage under New Jersey common law. D.E. I, Compl. ¶ 97-127. Zillow filed a motion to

dismiss Plaintiffs Complaint, D.E. 11, which the Court granted, D.E. 20. The Court also provided

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Plaintiff an opportunity to file an amended complaint, which Plaintiff filed on March 29, 2019,

alleging only two of its previous five counts: (1) conspiracy to restrain trade under Section 1 of

the Sherman Act, and (2) conspiracy to restrain trade under the New Jersey Antitrust Act. D.E.

22. Zillow again moved to dismiss Plaintiffs Amended Complaint. D.E. 24. Plaintiff filed

opposition, D.E, 29, to which Zillow replied. D.E. 30.

III. STANDARD OF REVIEW

A. Rule 12(b)(1)

In deciding a Rule 12(b)( I) motion for lack of subject-matter jurisdiction, a court must first

determine whether the party presents a facial or factual attack because the distinction determines

how the pleading is reviewed. A facial attack “contests the sufficiency of the complaint because

of a defect on its face,” whereas a factual attack “asserts that the factual underpinnings of the basis

for jurisdiction fails to comport with the jurisdictional prerequisites.” Elbeco Inc. v. Nat ‘I Ret.

Fund, 128 F. Supp. 3d 849, 854(E.D. Pa. 2015) (quotingMoore v. Angie’s List, Inc., 118 F. Supp.

3d 802, 806 (ED. Pa. 2015)).

For a facial attack, “the Court must consider the allegations of the complaint as true,” much

like a Rule l2(b)(6) motion to dismiss. Bd. of Trs. of Trucking Emps ofN. Jersey Welfare Fund,

Inc. v. Caliber Auto Transfe,-, Inc., No. 09-6447, 2010 WL 2521091, at *8 (D.N.J. June 11, 2010)

(quoting Petruska v. Gannon Univ., 462 F.3d 294, 302 (3d Cir. 2006)). However, for a factual

attack, “the court may consider and weigh evidence outside the pleadings to determine if it has

jurisdiction.” Gould Ekes. Inc. v. United States, 220 F.3d 169, 178 (3d Cir. 2000), holding

modified by Simon v. United States, 341 F.3d 193 (3d Cir. 2003). The burden is on the plaintiff to

prove that the Court has jurisdiction. ii

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As for a district court’s power to hear the case, “Article III of the Constitution limits the

jurisdiction of federal courts to ‘Cases’ and ‘Controversies.” Lance Coffnzan, 549 U.S. 437,

439 (2007). One key aspect of this case-or-controversy requirement is standing. See id. “The

standing inquiry focuses on whether the party invoking jurisdiction had the requisite stake in the

outcome when the suit was filed.” Constitution Parti’ of Pa., 757 F.3d at 360. To establish

standing, a plaintiff must satisfy a three-part test, showing: “U) an ‘injury in fact,’ i.e., an actual

or imminently threatened injury that is ‘concrete and particularized’ to the plaintiff; (2) causation,

i.e., traceability of the injury to the actions of the defendant; and (3) redressability of the injury by

a favorable decision by the Court.” Nat’! Collegiate Athletic Ass ‘n v. Gov, ofN.J., 730 F.3d 208,

218 (3d. Cir. 2013).

B. Rule 12(b)(6)

Rule 12(b)(6) of the Federal Rules of Civil Procedure permits a defendant to move to

dismiss a count for “failure to state a claim upon which relief can be granted[.]” To withstand a

motion to dismiss under Rule I 2(b)(6), a plaintiff must allege “enough facts to state a claim to

relief that is plausible on its face.” Bell AtL Corp. v. Twvmbly, 550 U.S. 544, 570 (2007), A

complaint is plausible on its face when there is enough factual content “that allows the court to

draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcrofl v.

Iqbal, 556 U.S. 662, 678 (2009). Although the plausibility standard “does not impose a probability

requirement, it does require a pleading to show more than a sheer possibility that a defendant has

acted unlawfully.” Conne!!y i’. Lane Const. Corp., 809 F.3d 780, 786 (3d Cir. 2016) (internal

quotation marks and citations omitted). As a result, a plaintiff must “allege sufficient facts to raise

a reasonable expectation that discovery will uncover proof of [his] claims.” Id. at 789.

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In evaluating the sufficiency of a complaint, a district court must accept all factual

allegations in the complaint as true and draw all reasonable inferences in favor of the plaintiff.

Phillips v. Cty. of Allegheny, 515 F.3d 224, 231 (3d Cir. 2008). A court, however, is “not

compelled to accept unwarranted inferences, unsupported conclusions or legal conclusions

disguised as factual allegations.” Baraka v. McGreevey, 481 F.3d 187, 211 (3d Cir. 2007). If,

after viewing the allegations in the complaint most favorable to the plaintiff, it appears that no

relief could be granted under any set of facts consistent with the allegations, a court may dismiss

the complaint for failure to state a claim. DeFazio v. Leading Edge Recovery Sols., 2010 WL

5146765, at *1 (D.N.J. Dec. 13, 2010).

LV. LAW AND ANALYSIS

A. Article III Standing

A plaintiff seeking to establish Article [II standing “must demonstrate ‘(1) an injury-in-

fact, (2) a sufficient causal connection between the injury and the conduct complained of, and (3)

a likelihood that the injury will be redressed by a favorable decision.” Finketman v. Nat l Football

League, 810 F.3d 187, 193 (3d Cir. 2016) (quoting Neale & Volvo Cars ofN. Am., LLC, 794 F.3d

353, 358-59 (3d Cir. 2015) (internal quotations omitted and punctuation modified)). The first

element, an injury-in-fact, requires Plaintiff to show “the invasion of a concrete and particularized

legally protected interest’ resulting in harm ‘that is actual or imminent, not conjectural or

hypothetical.” Finkehnan, 810 F.3d at 193 (quoting Blunt i’. Lower Merion Sc?,. Dist., 767 F.3d

247, 278 (3d Cir. 2014)). The second element, causation, “requires the alleged injury to be ‘fairly

traceable to the challenged action of the defendant, and not the result of the independent action of

some third party not before the court.” Finkelman, 810 F.3d at 193 (quoting Toll Bros., Inc. v.

Twp. ofReadington, 555 F.3d 131, 137-38 (3d Cir. 2009)). The Third Circuit has explained that

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Article III’s causation requirement is “alcin to ‘but for’ causation in tort and may be satisfied ‘even

where the conduct in question might not have a proximate cause of the harm.” Finkelman, 810

F.3d at 193 (quoting Edmonson v. Lincoln Nat’l fe Ins. C’o., 725 F.3d 406, 418 (3d Cir. 2013)).

The third element, redressability, requires a plaintiff “to show that it is ‘likely, as opposed to

merely speculative,’ that the alleged injury will be redressed by a favorable decision.” Finkelman,

810 F.3d at 194 (quoting Lujan v. Defenders of Wildflfe, 504 U.s. 555, 561 (1992)).

‘When assessing standing on the basis of the facts alleged in a complaint,” courts “apply

the same standard of review we use when assessing a motion to dismiss for failure to state a claim.”

Id. (citing In re Schering Plough C’orp. Intron/Temodar Consumer Class Action, 678 F. 3d 235,

243 (3d Cir. 2012)). The Third Circuit has described this process as a three-step inquiry:

First, we “tak[e] note of the elements a plaintiff must plead to state

a claim” here, the three elements of Article III standing. Second,
—

we eliminate from consideration any allegations that, “because they

are no more than conclusions, are not entitled to the assumption of
truth.” Third, “where there are well-pleaded factual allegations,
[we] assume their veracity and then determine whether they
plausibly” establish the prerequisites of standing. In conducting this
analysis, we are mindful of the Supreme Court’s teaching that all
aspects of a complaint must rest on “well-pleaded factual
allegations” and not “mere conclusory statements.” Thus, to survive
a motion to dismiss for lack of standing, a plaintiff “must allege facts
that affirmatively and plausibly suggest that it has standing to sue.”
Speculative or conjectural assertions are not sufficient.

Id. (internal citations omitted).5 With respect to causation, the Third Circuit has explained that

[t]he causation element of standing requires a plaintiff to allege facts

sufficient to show that his or her injury is “fairly traceable” to the

In this context, the Third Circuit has acknowledged that “[s]ome of our sister circuits have
questioned how well the ‘plausibility’ standard of Iqbal and Twombly maps onto standing
doctrine.” Finkelman, 810 F.3d at 194 n.55 (citing Maya v. Centex C’orp., 658 F.3d 1060, 1068
(9th Cir. 2011), and Ross i’. Bank of Am., N.A. (USA,), 524 F.3d 217, 225 (2d Cir. 2008)). The
Circuit continued. “[wjithout wading too deeply into this particular thicket, we are content to say
that, even when reviewing only the bare allegations of a complaint, Iqbal and Twombly teach that
standing cannot rest on mere ‘legal conclusions’ or ‘naked assertions.” Id.

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alleged wrongdoing of the defendant. We have explained that

traceability requires, at a minimum, that the defendant’s purported
misconduct vas a “but for” cause of the plaintiffs injury.

Id. Here, Plaintiffs injury-in-fact is alleged as follows:

Plaintiff has been injured and will continue to be injured in their

business and property by taking longer to sell its property, receiving
less for its property, and otherwise incurring lost profits in
connection with the sale of [the Property] because of the presence
of a prominently displayed Zestimate when other sellers who are
represented by brokers who are part[ies] to the Zestimate
Agreements are able to conceal their Zestimates.

FAC ¶126. In sum, Plaintiffs alleged injury is that, as a result of Defendants’ Zestimate

Agreements, Plaintiff has been unable to sell the Property, thus suffering damages. See also Pl.’s

Opp. at 25 (“Plaintiffs injury, a lost opportunity of a sale as a result of a prominent Zestimate,

was [] a foreseeable consequence of the Zestimate Agreements[.]”); see also id. at 29 (“Plaintiff

alleges with requisite specificity how the Zestimate Agreements . . . caused Plaintiff to suffer [an]

injury-in-fact in the form of lost profits.”). Assuming that Plaintiffs alleged injury is sufficient to

qualifiy as an injury-in-fact, Plaintiff nonetheless fails to establish the causation element of Article

III standing.

“The causation element of standing requires a plaintiff to allege facts sufficient to show

that his or her injury is ‘fairly traceable’ to the alleged wrongdoing of the defendant.” Finkelman,

810 F.3d at 198. Moreover, such “traceability requires, at a minimum, that the defendant’s

purported misconduct was a ‘but for’ cause of the plaintiffs injury.” Id. (emphasis added). In

other words, Plaintiff must establish that “but for” Defendants’ Zestimate Agreements with other

brokers, Plaintiff would not have suffered lost profits from its inability to sell the Property. The

facts alleged in the First Amended Complaint, however, fail to adequately establish this causal

connection.

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Here, Plaintiffs alleged causal connection between its injury and Defendants’ conduct

appears to concern the value of the Property’s Zestimate rather than the location of the Property’s

Zestimate, and certainly does not appear to concern the location of Zestimates on the

co-conspirators’ property listings. For example, Plaintiff alleges that it “has been unable to sell

[the Property] [because] [p]otential buyers have advised [Plaintiffs] agents an&or representatives

that the difference between the IPropertv ‘sJ Zestirnate and the [Property ‘sJ listing price has

impacted andlor informed their decisions not to purchase [the Property].” FAC ¶ 110 (emphasis

added). Plaintiff thither alleges that “[t]hroughout January of 2017 and up to the filing of the

original Complaint in this matter, the Zestimate for [the Property] remained around $3 million.”

Id. ¶ 111. Plaintiff contends that “[t]his Zestimate was well below the appraised value6 of [the

Property],” and that two potential buyers informed Plaintiff “that they viewed [the Property’s

listing price] and also viewed the [Property’s] Zestimate at this same time when [the Property] was

around [three] million and were turned off from considering a potential purchase of the property

based on the discrepancy between the listing price and the Zestirnate.” Id. ¶fflJ 111-112 (emphasis
added).

Plaintiff does not plausibly allege facts to support the reasonable inference that it has been

unable to sell the Property because of the lack ofprominent Zestimates on other brokers’ listings,

or even because of the prominence of the Zestimate on Plaintiffs own listing. Rather, it appears

from Plaintiffs allegations that its injwy is instead casually connected to the discrepancy in value

between the Property’s asking price and the Property’s Zestimate. Presumably, if the Zestimate

for the Property was higher than Plaintiffs asking price, then Plaintiff would not be claiming any

6
Of note, Plaintiffs allegations as to the appraised value are conclusory. Plaintiff fails to indicate
the appraised value, much less provide plausible factual support for how the appraisal was
calculated.

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injury which leads to the conclusion that it is the amount of the Zestimate, rather than its location,
—

which causes Plaintiffs alleged injury. At best, it is speculative and conjectural to infer that

Plaintiff would not have encountered the same inability to sell the Property had Defendants not

entered into Zestimate Agreements with other brokers. In sum, Plaintiffs allegations do not

support the plausible inference that it’s alleged injury (lost profits from its inability to sell the

Property) is “fairly traceable” to Defendants’ challenged conduct (providing certain brokers the

option of altering the positioning of Zestimates on their own listings). Accordingly, the Court

finds that Plaintiff has not satisfied the causation element of Article III standing, and therefore,

Plaintiff does not have standing to bring its suit.

B. Sherman Act, 15 U.S.C. § i7

Even assuming, however, that Plaintiff did have Article III standing, Plaintiff still fails to

establish that it has antitrust standing. Section 1 of the Sherman Act states that “[e]very contract,

combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce

among the several States, or with foreign nations, is hereby declared to be illegal.” 15 U.S.C. § 1.

To maintain a claim under Section 1, a plaintiff must allege: (1) that the defendant was a party to

a “contract, combination. . . or conspiracy” (2) with an unlawful objective to put an “unreasonable

restraint on competition.” Monsanto Co. v. Spray-Rite Sen. C’oip., 465 U.S. 752, 761 (1984); see

also hi i-c Ins. Brokerage Antitrust Litig., 618 F.3d 300, 315 (3d Cir. 2010); Rossi v. Standard

‘
Plaintiff brings claims under both the Sherman Act, 15 U.S.C. § 1, FAC ¶J 123-127, and New
Jersey Antitrust Act, N.J.S.A. 56:9-3, Id. ¶IJ 128-130. “[TJhe New Jersey Antitrust Act shall be
construed in harmony with ruling judicial interpretations of comparable federal antitrust statutes.”
Eisai, Inc. i’. Sanofi Aventis US., LLC, 821 F.3d 394, 402 n.1 I (3d Cir. 2016) (quoting State v.
N.J. Trade Waste Ass ‘n, 96 N.J. 8, 19(1984)). The parties agree on this point. Defs.’ Br. at 15;
see generally Pl.’s Opp. (failing to separately evaluate its New Jersey Antitrust Act argument,
instead implicitly relying on its Sherman Act argument). Therefore, the federal Sherman Act claim
and its analogous New Jersey counterpart will be analyzed together.

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Roofing, Inc., 156 F.3d 452, 461 (3d Cir. 1998). The unlawful objective must relate to antitrust

activities. In re Ins. Brokerage Antitrust Litig., 618 F.3d at 331. In other words, an unlawful

objective separate from antitrust conduct may be otherwise actionable, but not under the antitrust

statutes. Id.

Moreover, “even [ifi a plaintiff has established Article Ill standing, antitrust standing

remains as a prerequisite to suit, focus[ing] on the nature of the plaintiffs alleged injury, [and]

asking whether it is of the type that the antitrust statute was intended to forestall.” Hartig Drug

Co. Inc. i’. Senju Pharm. Co. Ltd., 836 F.3d 261, 269 (3d Cir. 2016) (internal quotations omitted).

Antitrust standing, unlike Article III standing, is a “prudential limitation” that does not affect the

Court’s subject matter jurisdiction over a matter, but rather “prevents a plaintiff from recovering

under the antitrust laws.”8 Ethypharm S.A. v. Abott Labs., 707 F.3d 223, 232 (3rd Cir. 2013); see

also Sullivan v. DB Invs. Inc., 667 F.3d 273, 307 (3d Cir. 2011) (“[L]ack of antitrust standing

As recently explained by the Third Circuit in Hartig Drug Co. Inc. v. Senju Pharm, Co. Ltd.,

That Article III standing and antitrust standing both employ the term
“standing” tends to conifise matters. The two concepts are distinct,
with the former implicating a court’s subject matter jurisdiction and
the latter affecting only the plaintiffs ability to succeed on the
merits. In Ethypharm S.A. France v. Abbott Laboratories, we
explained that Article III standing is of constitutional and hence
jurisdictional consequence, while antitrust standing is not[.]
Constitutional standing is augmented by consideration of prudential
limitations. For plaintiffs suing under federal antitrust laws, one of
the prudential limitations is the requirement of antitrust standing. It
does not affect the subject matter jurisdiction of the court, as Article
III standing does, but prevents a plaintiff from recovering under the
antitrust laws.

836 F.3d 261, 269-70 (3d Cir. 2016) (quoting Ethypharm S.A., 707 F.3d at 232) (internal
quotations, footnotes, and citations omitted)). Thus, for example, if a plaintiff showed an injury
due to a tort, the plaintiff would have Article III standing but would lack antitrust standing.
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affects a plaintiffs ability to recover, but does not implicate the subject matter jurisdiction of the

court”) (citing Gerlinger i Arnazon.corn Inc., 526 F.3d 1253, 1256 (9th Cir. 2008fl).

The Supreme Court in Associated General Contractors of Cal., Inc. v. Cal. State Council

of Carpenters articulated several factors to consider when determining whether a plaintiff has

antitrust standing. 459 U.S. 519, 535-38 (1983). Since then, the Third Circuit has “organized

those factors . . . into the following multifactor test”:

(1) the causal connection between the antitrust violation and the
harm to the plaintiff and the intent by the defendant to cause that
harm, with neither factor alone conferring standing; (2) whether the
plaintiffs alleged injury is of the type for which the antitrust laws
were intended to provide redress; (3) the directness of the injury,
which addresses the concerns that liberal application of standing
principles might produce speculative claims; (4) the existence of
more direct victims of the alleged antitrust violations; and (5) the
potential for duplicative recovery or complex apportionment of
damages.

Ethypharm S.A. France, 707 F.3d at 232-33 (quoting In re Lower Lake Erie Iron Ore Antitrust

Litig., 998 F.2d 1144, 1165-66 (3d Cir, 1993)). In particular, “[pjdvate plaintiffs pursuing claims

under § 1 of the Sherman Act have standing when they suffer an antitrust injuty that is causally
related to the defendants’ allegedly illegal anti-competitive activity.1’ Eichorn v. AT&T Corp.,

248 F.3d 131, 140 (3d Cir. 2001) (emphasis added). In this context, antitrust standing “focuses on

the nature of the plaintiffs alleged injury,’ [and] ask[s] ‘whether it is of the type that the antitrust

statute was intended to forestall.” Hartig Drug Co. Inc., 836 F.3d at 269; see also Philadelphia

Taxi Ass’n, Inc. v. Uber Techs., Inc., 886 F.3d 332, 344 (3d Cir. 2018) (“Appellants allege their

own injury, namely, financial hardship. Tellingly, they fail to aver an antitrust injury, such as a

negative impact on consumers or to competition in general, let alone any link between this impact

and the harms Appellants have suffered.”), ccii. denied sub norn. Philadelphia Taxi Ass ‘ii, Inc. v.

(Ther Techs., Inc., 139 S. Ct. 211(2018).

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Here, Defendants’ alleged antitrust conduct is Defendants entering into Zestimate

Agreements with certain brokers so that the Zestimates for those brokers’ real estate listings appear

less prominently on their listing pages. FAC ¶ 1. As previously noted, however, Plaintiffs

alleged injury is of a personal nature Le., lost profits from its inability to sell the Property. FAC

¶ 126; see also Pl.’s Opp. at 25 (“Plaintiffs injury, a lost opportunity of a sale as a result of a

prominent Zestimate, was [] a foreseeable consequence of the Zestimate Agreements[.]”); see also
id. at 29 (“Plaintiff alleges with requisite specificity how the Zestimate Agreements . . . caused

Plaintiff to suffer injury-in-fact in the form of lost profits.”). This personalized injury, however,

is not “of the type that the antitrust statute was intended to forestall.” Hartig Drug Co. Inc., 836

F.3d at 269.

To the extent Plaintiff claims that the Zestimate Agreements give the co-conspirator

brokers a “powerthl advantage over their rivals,” FAC ¶ 21, or otherwise “tilt the playing field in
[their] favor,” Id. ¶ 34, such claims are, at best, speculative and conclusoiy. Plaintiffs allegations

rely on at least two assumptions that are not supported by an plausible facts: first, that the

Zestimates are always less than the asking price, and second, that the co-conspirator brokers have

been able to sell comparable properties (to the Property) at a similar price (to Plaintiffs asking

amount) in a shorter amount of time. Plaintiff fails to plausibly allege facts from which the Court

can reasonably infer the same. Additionally, while Plaintiff vaguely alleges various other injuries

to consumers and competition in general that purportedly result from the Zestimate Agreements,

see FAC ¶J 30, 34, 83, 85, 99, 124, Plaintiff fails to allege that it suffered from any ofthese injuries.

Simply put, Plaintiff fails to demonstrate a causal link between the purported antitrust effect of the

Zestimate Agreements and the harm Plaintiff has suffered. Philadelphia Taxi Ass ‘ii, Inc., 886 F.3d

at 344; see also Eichorn, 248 F.3d at 140 (“Private plaintiffs pursuing claims under § I of the

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Sherman Act have standing when hey suffer an antitrust injury that is causally related to the

defendants’ allegedly illegal anti-competitive activity.”).

For example, Plaintiff alleges that “[t]he Zestimate Agreements . have the purpose and

effect of stifling and distorting the flow of price related information, anticompetitively tilting the

playing field in favor of the co-conspirator Brokers, and creating and heightening barriers to entry

in the market for residential real estate listing services.” Id. ¶ 34. As a result of these effects,

Plaintiff alleges that Zillow users are injured because they, inter alia: (I) “are forced either to make

decisions based on selectively distorted information or to expend additional time and effort to

scour each listing for potentially concealed information”; (2) are forced to pay “increased [costs]

in the form of advertising fees, brokers’ commissions, or other costs incurred solely to alter or

conceal the display of Zestimates”; and (3) face barriers to entry and expansion in the listing and

sale of residential real estate. Id. ¶J 30, 34, 83, 85, 99, 124. Notably, Plaintiff fails to provide

adequate factual support for such allegations.

Even taking these allegations as true, however, Plaintiffs alleged injury does not reflect

any of the antitrust injuries Plaintiff vaguely argues the Zestimate Agreements cause. Plaintiff

does not make allegations that it was forced to make a decision based on distorted information; or

that it was forced to expend extra time looking for a Zestimate; or that it had to (or imminently

was going to) pay increased fees or other costs as a result of the Zestimate Agreements; or that it

faced barriers of entry into the real-estate listing market. Instead, Plaintiffs alleged injury arises

from its inability to sell the Property, purportedly as a result of the Zestimate Agreements. FAC ¶

126. And, as noted above, it is not actually the placement of the Zestimates of which Plaintiff

complains, but the amount of the Zestimate vis-ã-vis the Property. Accordingly, the Court finds

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that Plaintiff lacks antitrust standing and therefore dismisses Plaintiffs claims on this alternative

ground.

V. CONCLUSION

In sum, the Court GRANTS Defendants’ motion to dismiss, D.E. 24, without prejudice.

Plaintiff has thirty (30) days to file a Second Amended Complaint, if it so chooses, consistent with

this Opinion. If Plaintiff fails to do so, this matter will be dismissed with prejudice. An appropriate

Order accompanies this Opinion.

Date: March 3X1,

2020

a OQ\Iç J
John Michael Vazqu,”U(.D.J.

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