Editor’s note: The COURT REPORT is RISMedia’s weekly look at current and upcoming lawsuits, investigations and other legal developments around real estate.
Summer is coming to a close, and with some major deadlines looming in a few of the larger cases facing real estate, courthouses have remained relatively quiet these past few weeks. But one case, involving a more personal dispute between two major companies, hit a significant milestone this week, while a short but significant update in the Department of Justice’s (DOJ) investigation into the National Association of REALTORS® (NAR) outlines a new roadmap for that inquiry.
Here is the latest news from court cases affecting real estate:
CoStar remains defiant in data-theft spat with Realtor.com®
Two portal giants—already bitter rivals who have publicly traded blows over website traffic—are still locked in a heated court case involving a former Realtor.com employee who accessed “confidential” information from the company after joining rival Homes.com (owned by CoStar).
This week, Move, Inc.—the Rupert Murdoch-owned parent company of Realtor.com—filed its request for a preliminary injunction that would prevent that employee or CoStar from accessing or using those files.
“A preliminary injunction prohibiting (the employee) and CoStar…from further misappropriation is necessary to preserve the status quo between now and trial because Defendants cannot be trusted to police themselves,” the filing says.
CoStar has adamantly pushed back on Move’s characterization of the employee’s access to the files, saying the information he accessed (mostly having to do with Realtor.com had nothing to do with his new job at Homes.com and was mostly “financial, personal and medical information” stored on Realtor.com’s servers).
CoStar General Counsel Gene Boxer tells RISMedia that the request for a preliminary injunction “repeats the same attorney arguments,” and notes that Move, Inc. has not even claimed (so far) that CoStar as a company accessed or benefited from the confidential documents.
“We have stated from the beginning that Move’s case against CoStar was a PR stunt, and this is just more proof. Move’s continued bullying of a long-serving employee in the process is even worse. We will fight and win this dispute,” Boxer said
NAR promises to appeal DOJ investigation to Supreme Court
In a joint filing, NAR and the DOJ revealed that their long-running and contentious court fight over a 2020 promise by antitrust regulators to “close” an investigation into real estate policies will continue all the way to the Supreme Court.
NAR will file its appeal to the nation’s highest court by Oct. 10, while the DOJ agreed to “significantly narrow” its request for documents related to certain civil subpoenas, and will also delay requests for documents regarding the Clear Cooperation policy until after the Supreme Court rules on the forthcoming appeal.
The appeal to the Supreme Court comes after a D.C. Circuit Court panel of three judges in April overturned an earlier ruling by a federal judge that blocked the DOJ from reopening an investigation it had previously characterized as “closed.”
An NAR spokesperson told RISMedia that the organization is “evaluating all remaining legal options.”
Agents allege Realtor.com leads are a ‘scheme’
A group of eight REALTORS® from various states accused Realtor.com, NAR and several other real estate tech companies of seven charges, centering around what it considers to be a “lead-generation scheme” in which the leads in question are unvetted and fraudulent.
The lawsuit claims that information sold as leads was “highly questionable” and often not even associated with anyone who showed any interest in purchasing real estate. They also claim that some leads were billed as “exclusive” and then sold to other agents.
Plaintiffs also claim NAR was “complicit” and has provided cover for the alleged misconduct.
NAR told RISMedia that it “does not own or operate” the companies accused of being involved in the “scheme,” but promised to defend the “false allegations” in court.
California copycat case splits along settlement lines
In a status report for a copycat case that involves an independent MLS along with several brokerages and associations, the plaintiffs appear ready to allow companies covered by the National Association of REALTORS®’ settlement—either automatically or by opt-in—to delay all proceedings in the case, even as other companies will have to continue fighting the lawsuit.
In a status update this week, lawyers representing both plaintiffs and defendants told a judge they “don’t anticipate” an update regarding local brokerages and associations covered by the settlement until after the final approval hearing for the NAR settlement hearing in November, meaning those entities will not have to face any more deadlines or hearings for the next three months or so.
But two companies NOT covered by the settlement—Windermere and eXp—will have to update the judge on their status, and potentially refile motions in the case ahead of the NAR settlement hearing.
Judges and plaintiffs across the country have taken different approaches on how to handle the costly copycat litigation while the uncertainty of the NAR settlement process plays out, with some plaintiffs seeking to push forward with litigation based on the localized nature of real estate rules and practices.
EXIT joins motions in biggest copycat case
There have been times during the course of the commission lawsuits that real estate brokerages have publicly diverged on legal strategy or arguments. Not so for EXIT Realty, which asked a judge to simply allow the company to join arguments made by other brokerages regarding why the lawsuit should be thrown out, rather than filing its own separate arguments in the case.
Across the commission lawsuit saga, brokerages have occasionally used this strategy, though most have sought to carve out their own arguments as to why lawsuits naming them should be thrown out, focusing again on the highly specific and fractured nature of the industry.
The judge in the case—Stephen R. Bough, who also oversaw the Burnett case—granted EXIT’s request.
