Move suffers legal setback as court dismisses trade secret claims against CoStar

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

Judge George H. Wu of 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 on Tuesday, Housingwire reported.

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

Both of the dismissed claims were aimed at both CoStar and James Kaminsky, the former Realtor.com editor in the middle of an intense legal saga between the real estate players.

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

A spokesperson for Realtor.com lauded the judge’s decision and confirmed it would refile its claims.

“We are pleased that the judge rejected all but one of CoStar’s arguments,” the spokesperson said. “We plan to proceed with all six of our claims after making minor adjustments, per the judge’s instructions. We look forward to moving ahead with our claims in the discovery process and having our day in court.”

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

Wu’s latest ruling against Move follows previous losses in the case for the company. In a ruling issued in September, Judge Wu denied the company’s motion for a preliminary injunction and limited expedited discovery, as the company had not adequately displayed evidence that it had experienced imminent and irreparable harm.

The legal battle between Move and CoStar is heightened by their ongoing battle over who can claim the number two spot for online residential listing platforms.

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

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

This year, CoStar launched a $1 billion advertising campaign, including three Superbowl ads, in a bid to gain domination over the sector.

“As we have said all along, Move’s case is a sham,” a CoStar spokesperson stated in an email to Housingwire. “Nothing more than a transparent attempt by the operator of the flailing Realtor.com to lash out at Homes.com, which has far surpassed Move’s website in the marketplace.”

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

The suit claims that the group defrauded real estate agents by knowingly selling them fake leads on properties, failing to run background checks on senior management and to disclose that they utilized other websites to obtain potential leads, and forcing agents to sign up for lead generation products before changing contract terms and conditions.
— Caroline Handel