Demetres v. Zillow, Inc.

CourtDistrict Court, D. Connecticut
DecidedSeptember 21, 2022
Docket3:21-cv-00802
StatusUnknown

This text of Demetres v. Zillow, Inc. (Demetres v. Zillow, Inc.) is published on Counsel Stack Legal Research, covering District Court, D. Connecticut primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Demetres v. Zillow, Inc., (D. Conn. 2022).

Opinion

UNITED STATES DISTRICT COURT DISTRICT OF CONNECTICUT

AUDREPYl aDiEntMifEfTRES, v. , Civil No. 3:21cv00802 (JBA)

September 21, 2022 ZILLOWD,e IfNenCd., ant

.

RULING ON MOTION TO DISMISS

1 This is a putative class action for compensatory and punitive damages in which the Plaintiff, Audrey Demetres, alleges that the Defendant, Zillow, Inc.’s (“Zillow”) on-line home buying platform utilizes unfair and deceptive tactics, resulting in the Plaintiff’s financial losses. Plaintiff brings this action pursuant to the Lanham Act, 15 U.S.C. § 1125(a), the Sherman Act, 15 U.S.C. §§ 1 and 1px solid var(--green-border)">2, the Connecticut Unfair Trade Practices Act, 42 Conn. Gen. Stat §110a, et seq., and under the common law tortious interference with contractual relationships. Zillow has filed a motion to dismiss the amended complaint. For the reasons tIh. at folFloawct, sth Ael lmegoetido n is granted in part and denied in part. Plaintiff Demetres “is a real estate salesperson and/or real estate broker” residing in Fairfield, Connecticut. (Am. Compl. [Doc. # 5] ¶ 47.) Defendant is a corporation that “operates the nation’s dominant home buying platform at Zillow.com, which purports to make thIde. process of buying and selling residential real estate less complicated and lower priced.” ( ¶¶ 1, 49.) According to Plaintiff, Defendant misuses its platform in two ways: through its featuring of Advertising Agents, and through its use of “Zestimates.” First, Plaintiff alleges that its “market dominance gives [Zillow]Id t.he power to tilt the real-world playing field in favor of its own favored customers.” ( ¶ 7.) Defendant’s customers are not homebuyers, but rather real estate agents (“Advertising Agents,” as Plaintiff refers to them) who pay a fee to Defendant “so they can be associated with properItdi.e s [with] which they do not have a listing relationship . . . .” ( ¶ 7-8.) According to the amended complaint, this practice “allows [Defendant] to artificially confer upon its paying customers the ability for them to do what they otherwise cannot do, which is to directly advertiIsde. to and directly solicit [] prospective homebuyers []via other agents’ exclusive listings.” ( ¶ 18.) Plaintiff alleges that Zillow provides this benefit to the Advertising Agents to the detriment of both the listing agent and prospective homebuyers, the latter of which “are deliberately re-routed in their attempts to reach the actual listing agents for properItdie. s they are interested in, away from the agents with the most connection to the property.” ( ¶ 12.) Such a “scheme causes the buyer to end up with an agent who – not being the listing agent – has a greater incentive to steer the buyer to a pIdro. perty other than the property that caused them to initiate the process in the first place.” ( ¶ 23.) The “Advertising Agents have more, and a higher percentagIed . of, buyer broker and dual agency transactions compared to non- participating agents.” ( ¶ 29.) As a result, a consumer “enters into a commercial setting – defendant’s dominant, prevailing digital platform – where he or she is substantially more likely to paIrdt.i cipate in a dual agency dynamic without the careful disclosures normally required.” ( ¶ 32.) As a result of Defendant’s deceptIidv.e practices, Plaintiff has suffered “the loss of clients, sales, commissions and revenue.” ( ¶ 11.) The Amended Complaint alleges that Defendant’s cido.nduct has “further caused market confusion and economic harm to consumers,” ( ), because it “restricts the marketplaIdce. to the detriment of all consumers and participants in the residential real estate market.” ( ¶ 20.) Second, in addition to redirecting home buyers to its Advertising Agents, Defendant publishes “itsId o. wn manufactured, artificial real estate market in the form of [its] Zestimate program.” ( ¶ 35.) A Zestimate consists of Defendant’s “own,I dse. lf-devised, internally- standardized opinion of the value of the particular property.” ( ¶ 36.) The amended complaint alleges that the Zestimate program “illegally competes with the actual[] listing price that is developed through proper industry appraisal standards; and also through the listing agent’s actual, personal, intimaItde. knowledge of the property in question and the neighborhood where it is situated.” ( ) Plaintiff has suffered bIrdo. ken agreements with property sellers and buyers as a result of Defendant’s Zestimates. ( ¶ 37.) The combination of Defendant’s Zedset ifmacattoe program and its collection of fees from Advertising Agents results in, inter alia, “ listing agreements,” deception of agents, 2 sellers and purchasers, publication of listings on the Multi Listing Services (“MLS”) in violation of agency policy and without being properly licensed, access to confidential information through purchase of other digital platforms, monopolization of the real estate market and “dIodm. inance, control and overarching pursuit of participation in every aspect of tIhI.e marLkeegta.”l (Stan¶d¶a 3r3d- 34.) “To survive a motion to dismiss, a complaint must contain sufficSieanrmt fiaecnttuoa vl .m Uantitteerd, aStcacteepsted as true, to state a claim to relief that isA pslhacursoifbt lve. Ioqnb aitls face.” , 678 F.3d 147, 152 (2d Cir. 2012) (quoting , 556 U.S. 662, 678 (2009)). The complaint must be interpreted liberally, allH aelllelegra vti.o Cnosn msoulisdta bteed a Rccaeilp Cteodrp a.s true, and all inferences must be made in the plaintiff’s favor. , 331 F. App’x.

2 Plaintiff alleges “the loss of sales commissions to plaintiff, and others similarly situated, as a result of using [Plaintiff’s and potential class members’] informatiIodn. from duly organized Multi Listing Services (“MLS”) in a way that devalues, misappropriates and co-opts the MLS Chambers v. Time Warner, Inc. 766, 767 (2d Cir. 2009) (quoting , 282 F.3d 147, 152 (2d Cir. 2002)). Motions to dismiss “assess the legal feasibility of a complaint” and are not thOen ptalarcioe tToe a“acshsearys 't Pheen wsieoing hPtla onf tBhde. ve.v Tidevean cPeh warhmic. hIn mduigsh. Lt tbde., offered in support” of the merits. Ryder Energy Distribution Corp. v. Merrill Ly4n3c2h FC.o Smumppo.d 3idti e1s3 I1n,c 1.51 (D. Conn. 2019) (quoting , 748 F.2d 774, 779 (2d Cir. 1984)). But a complaint that only “offers ‘labels and conclusions’” or “naked aAssshecrrtoifotn vs. Idqebvaolid of further factual enhancement” Bwelill lA ntlo. tC osrupr.v viv. eT wao mmobtlyion to dismiss. , 556 U.S. 662, 678 (2009) (quoting , 550 U.S. 544, 555, 557 (2007)). Rather, a complaTiwnto mmbulsyt plead factual allegations that “raise a right to relief aidb. ove the speculative level,” , 550 U.S. at 555, and must be “plausible on its fIaIIc.e ,” Juarti s5d7i0c.t ion § Jurisdiction is proper pursuant to the Class Action Fairness Act (“CAFA”), 28 U.S.C. 1332 (d)(2). Plaintiff has pled that the aggregate amount in controversy will be at least $5,000,000, and because Plaintiff’s domicile is in Connecticut, and Zillow is a corporate citizen of Washington,.

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Demetres v. Zillow, Inc., Counsel Stack Legal Research, https://law.counselstack.com/opinion/demetres-v-zillow-inc-ctd-2022.