Pre-trial rulings in a dispute between Zillow and Realtor.com operator Move Inc. have reduced the potential damages against Zillow to $1.6 billion or $1.7 billion, down from about $2 billion, according to an analyst closely following the case.
The rulings by King County Superior Court Judge Sean P. O’Donnell included the dismissal of some claims related to Zillow’s acquisition of Trulia for $384 million.
“However, the Judge also ruled that Move is allowed to seek the larger ‘unjust enrichment’ damages related to Trulia ($803M) – which are based on the claim that Zillow improperly used Move’s trade secrets and received improper financial benefits by acquiring Trulia,” explains Thomas Claps, the litigation desk analyst at Susquehana Financial Group.
The rulings come in advance of a trial slated to begin next week. Move alleged in its suit that it had been damaged by the actions of Zillow and two of Move’s former executives, Curt Beardsley and Errol Samuelson, alleging that the executives stole trade secrets and destroyed documents when they left Move for Zillow.
Claps reiterated in his note that a recent ruling by the judge against Beardsley was a “significant setback” for Zillow’s broader case, allowing the jury to infer that missing evidence would have benefitted the plaintiffs’ case or alternatively hurt the defendant’s case.
Zillow said in a statement that it’s pleased the judge dismissed some of the claims by Move, which is owned by News Corp.
“We have consistently said News Corp’s allegations were baseless, and today’s rulings give us further confidence as we head to trial. We think a jury will see this case for what it’s really about: News Corp’s attempt to win in the courts a battle it is losing in the field of competition. We look forward to the judge’s additional rulings on summary judgments, and to addressing these allegations head-on in the trial.”
Move issued this statement on the pre-trial rulings.
Seeking to have the claims of Move and the National Association of Realtors dismissed before trial, Zillow desperately filed an unprecedented number of motions for summary judgment – more than 20 motions totaling more than 10,000 pages of argument and evidence. The massive effort must have cost Zillow millions. It has failed. With most of Zillow’s motions having been ruled on, NAR and Move are very pleased that the core of our claims remain intact, and that the mountain of evidence supporting allegations of trade secret misappropriation, fiduciary breaches, lying, and broad evidence destruction are moving forward. NAR and Move look forward to the jury trial, beginning June 6, with an adverse jury instruction as the Court in Seattle has already found to be appropriate because of evidence destruction in the case, and to the head-on impact this case will have on Zillow.
