Supreme Court won’t rescue Zillow from iBuying investor suit as its mortgage arm draws fresh fire
Zillow had heavyweight backing. In July, the US Chamber of Commerce, the Securities Industry and Financial Markets Association, the Washington Legal Foundation and Business Roundtable filed a joint brief urging the justices to step in. Two former SEC officials joined law professors on another brief. A third came from the Manhattan Institute and lawyers at Torridon Law, among them former Attorney General William Barr. The groups argued that a loose standard would let investors certify classes far more easily whenever an ambitious project fails.
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The steering cases brokers should watch
For mortgage professionals, the Zillow litigation that matters most may not be the investor case at all.
In January, Stephanie Dupuis, an agent in Kitsap County, Wash., sued on behalf of agents in Zillow’s Preferred and Flex programs. She says Zillow graded agents on how many buyers they got preapproved with Zillow Home Loans, and that low scorers got fewer referrals or were dropped.
On Sept. 28, US District Judge James L. Robart refused to throw out the case. He found the plaintiffs had plausibly alleged that agents “have no choice but to participate in Zillow’s referral ecosystem.” His ruling lets antitrust, consumer-protection and unjust-enrichment claims proceed, and it cites allegations that Zillow takes referral fees of 35% to 40% and commands about 60% of the audience for home search. Plaintiffs from Maryland and Oregon have joined the case.
