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Ruling Suffers Legal Setback as Court Dismisses Trade Secret Allegations Against CoStar

Umito October 31, 2024

CoStar scored again in its legal battle against Move, the parent company of Realtor.com.

Judge George H. Wu of the U.S. District Court in Los Angeles granted CoStar’s motion to dismiss two of Move’s claims in its first amended complaint in a ruling issued Tuesday, Housing wire reported.

Move’s claimed that CoStar violated the Computer Fraud and Abuse Act, as well as the Computer Data Access and Fraud Act, which were Move’s two federal and state statutory trade secret claims .

The two dismissed complaints targeted both CoStar and James Kaminsky, the former editor-in-chief of Realtor.com, amid an intense legal saga between the real estate players.

Under Wu’s ruling, Move can review and refile its claims within three weeks.

Originally filed by Move in July, the suit alleges that Kaminsky, after being fired by Move subsidiary Realtor.com, stole documents and trade secrets from his former employer, which he then used to fuel the growth of Homes.com, supported by CoStar. after being hired a few months later.

Wu’s latest ruling against Move follows earlier losses in the company’s case. In a ruling issued in September, Judge Wu denied the company’s request for a preliminary injunction and limited expedited discovery because the company had not sufficiently demonstrated proof that it had suffered imminent and irreparable harm.

The legal battle between Move and CoStar is exacerbated by their ongoing battle over who can claim the No. 2 spot among online residential listing platforms.

Realtor.com has argued, including in its lawsuit, that independent third-party sources such as Comscore, Nielsen, Similar Web or SEM Rush, show that the Move subsidiary retained its second place after Zillow, with CoStar’s Homes.com coming in last. position. among the top four residential ad platforms.

CoStar, whose digital portfolio also includes Apartments.com and 15 additional sites, claimed to reach 84 million average monthly unique page visitors in the second quarter of 2023, surpassing Realtor.com and Redfin to become the second-busiest residential site after Zillow.

This year, CoStar launched a billion-dollar advertising campaign, including three Superbowl commercials, in a bid to dominate the industry.

“As we have always said, Move’s case is a deception“, a CoStar spokesperson said in an email to Housingwire. “Nothing more than a transparent attempt by struggling site operator Realtor.com to go after Homes.com, which has far surpassed Move’s website in the market.”

This isn’t Move’s only current legal battle. The company, along with the National Association of Realtors and News Corp, Move’s parent company, were named in a class-action lawsuit filed in August by eight real estate agents.

The suit claims the group defrauded real estate agents by knowingly selling them false leads on properties, failing to conduct background checks on senior executives and disclosing that they were using other websites to obtain potential leads, and by forcing agents to sign up for lead generation products. before changing the terms and conditions of the contract.
— Caroline Handel