Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—D. Conn.: Real estate agent's deceptive practices claims against Zillow dismissed, (Jul 31, 2024)

By Kenneth H. Ryesky, M.B.A., J.D.

Connecticut Unfair Trade Practices Act had been sole remaining claim following earlier dismissal of Sherman Act and Lanham Act claims in connection with Zillow website.

The federal district court in New Haven, Connecticut has granted summary judgment dismissing a putative class action case against real estate market website operator Zillow. The complaint had originally alleged Sherman and Lanham Act claims, but they had earlier been dismissed; the tortious interference claim had been abandoned. The remaining claims under the Connecticut Unfair Trade Practices Act were dismissed for lack of standing and failure to fulfill the requisites of the state statute (Demetres v. Zillow, Inc., No. 3:21-cv-00802-JAM (D. Conn. July 30, 2024)).

Zillow, Inc. (Zillow) operates a consumer-facing website that services the residential estate market. The website has a search utility that enables users to identify real properties by various criteria, including location and price range. For a given real property, the website can connect buyers to the listing real estate agent by clicking the "Contact agent" button. Sellers can similarly use the Zillow website to determine a listing price for their properties; for this, Zillow has an algorithm that provides a "Zestimate" based upon public records, reported sales, and other data. The website user who accesses the "Zestimate" is immediately given a disclosure that the "Zestimate" is not a professional appraisal, but is an estimate that is to "be used as a starting point."

In 2021, a Connecticut real estate agent (Demetres) filed a putative class action against Zillow, alleging that Zillow's "Zestimates" have harmed her (and other real estate agents) by causing buyers and/or sellers to break their agreements arranged through her. Demetres initially alleged causes of actions under the Sherman Act [15 U.S.C. §§ 1 and 2], the Lanham Act [15 U.S.C. § 1125(a)] the Connecticut Unfair Trade Practices Act (CUTPA) [Conn. Gen. Stat. § 42-110a], and common law tortious interference. In 2022, Demetres's Lanham Act and Sherman Act claims were dismissed and discovery proceeded regarding the remaining claims; the parties eventually agreed that Demetres's claims pertained only to the "Contact agent" and "Zestimate" utilities on the Zillow website, and Demetres abandoned her tortious interference claim. Zillow has moved for summary judgment on the remaining CUTPA claim.

Standing. The court ruled that Demetres lacked standing to bring the lawsuit. The CUTPA claim allegations based upon the Zillow website's "Contact agent" button allegedly being deceptive and causing Demetres a loss of commissions was not sufficiently substantiated. While Demetres's conclusory statements that she was so harmed can support a plausible pleading at the motion to dismiss stage of litigation, more definitive substantiation is necessary in order to survive a summary judgment motion. Here, it was impossible to determine whether a person clicking the "Contact agent" button on the website was actually interested in purchasing the property, let alone whether a property sale would result in an actual consummation of the sale to entitle Demetres to her commission.

Moreover, the court required expert testimony for the quantification of any damages claimed here; no such expert was ever named, and Demetres's self-touted "specialized, professional expertise" and "superior knowledge of the industry" did not qualify her as a sufficiently objective expert witness in her own case.

It was unclear whether Demetres's "Zestimate" claim under CUTPA survived the 2022 dismissal motion decision. Here, Demetres claimed lost commissions upon three particular listings that never made it to closing. Two of those listings expired upon their own terms, and not by any shown causation by the "Zestimate." The list price of the third property was, at the seller's insistence, listed at nearly $200,000 above the "Zestimate" price; the "Zestimate" could not have been the cause of that listing falling through.

CUTPA. The court found that even if Demetres's CUTPA claim did survive the 2022 dismissal ruling, she did not fulfill the CUTPA claim requisites. The Zillow website attributes complained of were not unfair or deceptive; Demetres could point to statute, common law rule, or duty that was offended by the "Contact agent" or "Zestimate" functions on Zillow's website. Nor could Demetres demonstrate that the "Contact agent" or "Zestimate" functions were the cause of her alleged loss of sales commissions. The court accordingly granted Zillow's motion for summary judgment on Demetres's CUTPA claims.

The Case is No. 3:21-cv-00802-JAM.

Judge: Meyer, J.

Attorneys: William B. Westcott (Maya Murphy PC) for Audrey Demetres. Zachary W. Berk (Saul Ewing LLP) for Zillow Inc.

Companies: Zillow Inc.

Cases: StateUnfairTradePractices ConnecticutNews GCNNews