9th Circuit revives CREXi antitrust claims against rival CoStar

A 9th U.S. Circuit Court of Appeals panel on Monday revived counterclaims by Commercial Real Estate Exchange Inc., which alleges that a dominant rival violated state and federal antitrust laws by entering exclusive deals with brokers and erecting technological barriers that prevent them from working with competitors.

9th Circuit Judge Anthony D. Johnstone ruled that the Los Angeles company known as CREXi must prove its allegations, and that CoStar Group Inc. "may raise defenses, such as procompetitive rationales for its conduct."

"At this stage, however, it is plausible that CoStar's alleged conduct while in possession of monopoly power causes a substantial anticompetitive effect that harms consumers in the CRE listing, information, and auction services markets," he added.

Johnstone also affirmed Senior U.S. District Judge Consuelo B. Marshall's dismissal of CREXi's tortious interference claims because they were improperly raised. CoStar Group Inc. Et al. v. Commercial Real Estate Exchange Inc., 2025 DJDAR 5434 (9th Circ., filed July 27, 2023).

The appellate court ruling is the latest twist in CoStar's complaint alleging that CREXi infringed its copyright and violated the Digital Millennium Copyright Act by cropping its logo from property listings and "piggybacking on its content."

A trial is pending, and Marshall has yet to rule on motions by both companies for partial summary judgment that were argued in March in Los Angeles.

The judge previously dismissed CREXi's counterclaim, alleging violations of the federal Sherman Act and the state Cartwright Act, which the company appealed.

Nicholas S. Goldberg, a partner with Keker, Van Nest & Peters LLP and lead counsel for CREXI on the appeal, said he was pleased with the ruling.

"For too long, CoStar has bullied the commercial real estate industry," he wrote in an email. "Today's opinion is a step in the right direction, and we look forward to holding CoStar accountable for its anticompetitive conduct."

CoStar's general counsel, Gene Boxer, downplayed the significance of Monday's ruling on the antitrust counterclaims, calling them a "sideshow."

"We are disappointed and respectfully disagree with the decision to permit the antitrust claims to proceed -- a decision which, as many federal antitrust enforcers warned, now paves the way for future lawsuits that are similarly meritless," he wrote in a statement.

The company did not indicate if it would seek en banc review of the panel ruling. CoStar is represented by Latham & Watkins LLP.

Instead, Boxer focused on CoStar's underlying copyright claims, saying the company is prepared to go to trial on its allegations that CREXi engaged in an "international scheme of mass infringement" to build the company.

The Federal Trade Commission weighed in during the Biden administration, expressing no view of the merits of the underlying case but arguing that Marshall committed "fundamental legal errors" that "could shield harmful monopolistic conduct from antitrust review."

Goldberg, in a phone interview, downplayed the possibility that the case would lead to more Sherman Act claims. "The idea that this is going to open the floodgates to more antitrust litigation is pretty far-fetched," he said.

The other members of the 9th Circuit panel were Judge Lucy H. Koh and U.S. District Judge Michael H. Simon of the District of Oregon.