In a switch-up from the company’s previous stance, CoStar has filed an agreement to move its copyright infringement lawsuit against Zillow to Seattle, Washington.
In a notice of non-opposition filed Dec. 2, CoStar stated it agrees to transfer the case to the Western District of Washington “in light of new information disclosed by Zillow in its motion and other recent developments.”
Stating in its agreement that it filed the lawsuit in the Southern District of New York “based on information available to it at the time of filing,” CoStar had previously held that the lawsuit should remain in New York as many of the allegedly copyrighted photographs are based in the area. Specifically, around 10% of the properties with allegedly copyrighted photos are within 100 miles of the Southern District of New York court.
The company said that first and foremost it “wants this case to be resolved on the merits as soon as possible.”
“CoStar is focused on a fast, fair decision to remedy Zillow’s mass infringement of nearly 50,000 images, a case that is growing in scale with infringement continuing after we filed suit,” said CoStar’s General Counsel Gene Boxer in a statement. “We do not oppose transfer because Zillow has admitted the Western District of Washington is where Zillow designed and operated its scheme.”
Zillow did not respond to a request for comment at press time.
As mentioned, CoStar has agreed to transfer the case due in part to new information from Zillow, specifically 10 new key witnesses in Seattle who, the filing claims, are “central to the design and operation of (Zillow’s) scheme of mass infringement.”
As CoStar’s filing stated, “Zillow has since identified ten key witnesses involved in its mass infringement—including engineering and product personnel who are central to the design, development, and operation of Zillow’s infringing systems—almost all of whom are based in Seattle.”
CoStar also said it “looks forward to litigating in the Ninth Circuit,” as the company “has experience litigating copyright infringement disputes in the Ninth Circuit, and is excited about the prospect of doing so again.” The company noted that Zillow mentions two specific Ninth Circuit decisions, “which make the forum even more favorable to CoStar.”
Lawyers for Zillow previously alleged that CoStar had avoided filing in the Western District of Washington because of “unfavorable” Ninth Circuit precedent in copyright cases, which would apply to the litigation there but not necessarily in the Southern District of New York, which is in the Second Circuit.
One such decision mentioned was in CoStar’s lawsuit against rival CREXi for alleged copyright infringement of nearly 50,000 photographs. The filing stated that the court ruled CREXi had “actively and deliberately copied CoStar’s images as a matter of practice,” which CoStar characterized as “an ominous result for Zillow.”
CoStar also stated in the filing that Zillow has insinuated they are being “unjustifiably targeted” as a “competitive maneuver,” which the company said is “particularly outlandish given Zillow’s current sprawling litigation landscape.”
“In just the last few months, almost every aspect of Zillow’s business has been scrutinized and found wanting, prompting an array of litigation filed by, among others, consumer classes, States Attorneys General, and the Federal Trade Commission,” the filing stated.
In a previous filing, Zillow pointed out that Boxer and CoStar CEO Andy Florance often are quoted in media and put out press releases to coincide with litigation, calling the practice a “broader playbook” to “demean” competitors. Zillow pointed to an interview Florance gave in which he discussed how the company’s legal team “puts a fair amount of work” into press releases.
CoStar specifically pointed to other lawsuits against Zillow that are currently taking place in the Western District of Washington, and noted this in the filing as reason to transfer its lawsuit to the same district as it “recognizes the practical reality that consolidating this case in the same forum may lead to efficiencies.”
“Moreover, since CoStar sued, two major class actions addressing core aspects of Zillow’s business—lead diversion and the steering of consumers to high priced mortgages—are now proceeding in the same Seattle courthouse,” added Boxer.
One of the lawsuits Boxer is referring to is a class-action lawsuit focused on Zillow’s mortgage referral and fee structures, alleging that referrals to Zillow Home Loans are a “coercive scheme” which violates RESPA and other state and federal laws. The suit alleges that Zillow exerts “enormous pressure” on real estate agents who use its popular Premier Agent or Flex programs to refer clients to Zillow Home Loans, using its control of leads to ensure agents steer clients to Zillow loans, preventing the use of outside lenders and resulting in borrowers paying more.
The other lawsuit Boxer refers to is a class-action focused on Zillow’s hidden agent fees, alleging that Zillow has been deceiving homebuyers and inflating purchase prices through an alleged scheme involving hidden fees paid by real estate agents. The suit has been brought on by law firm Hagens Berman alongside Cohen Milstein (both behind the original class-action commission lawsuits in 2019), and could affect anyone who purchased a home using a Zillow-affiliated agent within the past four years.
“We look forward to proving our claims under Ninth Circuit law and to holding Zillow to account in its own backyard,” added Boxer.
