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Zillow Zestimate
(Zillow.com screen shot)

A U.S. District Court judge in Illinois dismissed a proposed class action lawsuit against Zillow Group on Wednesday in which the plaintiffs argued against the legality of the Zestimate, the Seattle-based real estate media company’s famed home valuation tool.

Judge Amy J. St. Eve granted Zillow’s motion, originally filed June 13, to dismiss four separate counts of the suit. It was filed by Vipul Patel, Bhasker Patel and Jyotsna Patel, as co-trustees of the Jyotsna Patel Living Trust; and CastleBuilders.com, an Illinois corporation, on behalf of “all current owners of real estate property located in Illinois whose property(ies) are listed on Zillow’s website.”

The Patels owned two properties that were on the market and the Zestimate for each fell far below the list price. A third Patel property and the Castle property were off the market, but both had Zestimates attached to them. Here are the claims that formed the basis for their suit.

  • In Count I, the plaintiffs sought an injunction under the Illinois Real Estate Appraiser Licensing Act, claiming that Zestimates are “real estate appraisals” that Zillow is unlicensed to make.
  • In Count II, plaintiffs argued that Zillow “unilaterally and willfully opted to disregard Plaintiffs’ … right to seclusion by publicly disseminating appraisal/financial opinions relative to real property for the general public for review.”
  • Count III argued under the Uniform Deceptive Trade Practices Act that Zillow uses the Zestimate to “prey upon the Plaintiffs and the Class so as to force them to retain real estate brokers.”
  • And finally, in Count IV, the suit argued a violation of the Illinois Consumer Fraud and Deceptive Business Practices Act “based on the allegedly deceptive acts” previously mentioned.

Zillow argued in court documents that the First Amendment required dismissal of all of the claims and beyond that, the plaintiffs failed “to plead the required elements of their claims.” The judge agreed, ruling with prejudice on Count I and without prejudice on the other three counts. (Read the full opinion from the court below.)

In a statement provided to GeekWire on Wednesday, Zillow said it was pleased with the court’s decision.

“The Zestimate has proven itself to be a sought-after and valuable free tool for consumers,” the statement read. “It’s the most accurate computerized home value estimate anywhere, and serves as an important data point for millions of homeowners, buyers and sellers every day.”

GeekWire previously reported that the suit was brought by Glenview, Ill., real estate lawyer Barbara Andersen, who claimed that Zillow was in violation of Illinois state law that forbid people or businesses from issuing appraisals without the proper license.

At the time, Andersen was arguing that the Zestimate was making it difficult to sell her home, calling the company’s algorithm for estimating home values “a sloppy computer-driven appraisal of the home” and questioning what legal basis the company had to be opining about anyone’s home value.

Anderson later withdrew her suit to refile it as a class action and represent the family of developers.

Vipul Patel vs. Zillow Zestimate lawsuit dismissal by GeekWire on Scribd

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