Zillow on Thursday filed a motion to transfer the portal’s copyright infringement lawsuit with CoStar Group from New York to Washington, and did not hesitate to take a few jabs at its portal nemesis in the process.
Despite the fact that neither company involved in the lawsuit is based in New York, CoStar filed the suit — which alleges Zillow illegally used thousands of CoStar Group-watermarked photos in its rental listings — in the Southern District of New York district court. Zillow alleged in the new motion that CoStar, in all likelihood, deliberately avoided filing in Washington because of its legal track record in the Ninth Circuit, referencing a case that VHT, now owned by CoStar, lost against Zillow over the display of listing photos in 2022.
And, Zillow added, the company could have avoided a lawsuit if it had brought the matter to Zillow’s attention first, after which the portal could have taken down the images in question.
“But CoStar instead chose to burden Zillow and the judicial system by filing this lawsuit in a forum that is inconvenient to both parties, already congested with other cases, and conspicuously outside of the Ninth Circuit, where CoStar has faced a series of unfavorable decisions,” the motion filed by Zillow states.
Zillow added in the filing that any witnesses who might be involved in the case will also likely be based out of Washington, where Zillow is headquartered. The company also claimed that the average judge’s case load in Washington’s court “is around one-third” of the Southern District of New York’s, and that a court in Washington has a greater interest in regulating a Washington-based company like Zillow.
In the motion, Zillow specified that fewer than 2 percent of the company’s employees are located in the Southern District of New York and fewer than 5 percent are located anywhere in New York state. Although Zillow also runs New York City-based portal StreetEasy and Hamptons-based website Out East, the company argued that no Out East photos were included in the lawsuit complaint, and that StreetEasy’s website does not contain features that are integral to CoStar’s copyright infringement argument.
“StreetEasy does not, for example, contain ‘unclaimed’ property pages that allow property owners to submit ‘claim this property’ inquiries,” the filing states.
Meanwhile, CoStar Group and CoStar Realty Information are Delaware companies with a principal headquarters in Arlington, Virginia, Zillow’s motion states. The portal also pointed out that according to LinkedIn data, only 4 percent of the company’s U.S.-based employees are located in the New York City metro area, while 46.7 percent are based in Virginia, Washington, D.C., and Baltimore, and an additional 18 percent are based in California.
Zillow additionally accused CoStar of employing a “playbook” against its competitors, stating that Zillow has just become its latest target.
“This case is part of CoStar’s broader playbook of deploying copyright lawsuits to attack its competitors — lawsuits that are typically accompanied by serial press releases from CoStar’s Washington, D.C.-based CEO that seek to extol CoStar and demean its competitors,” Zillow’s filing states. “CoStar has filed these lawsuits across the country, but not previously in this District, and is currently litigating one such suit against a competitor in the Central District of California.”
CoStar Group told Inman in an emailed statement that the move by Zillow to try and relocate the case was manufactured as a distraction.
“Rather than acknowledge its plain wrongdoing, Zillow seeks to transfer the case in a transparent attempt to delay justice,” the statement from CoStar Group General Counsel Gene Boxer said. “Zillow pretends that litigation in Manhattan is not feasible; meanwhile, it is actively litigating in the city against Compass. Zillow paints itself as a stranger to New York, but it plasters its StreetEasy ads in the subways while touting a flagship office on Broadway. And while the infringement concerns images of properties nationwide, those properties are most heavily concentrated in and around New York City.
“Zillow’s attempts to delay aside, the choice of courthouse will ultimately prove a sideshow. Zillow will be held to account for its mass infringement, no matter where this case proceeds. Whatever procedural gambits Zillow deploys, justice will prevail.”
Since CoStar filed its copyright infringement lawsuit against Zillow in July, Zillow has taken down many of the CoStar-watermarked photos in question. However, CoStar has alleged that the company has added thousands more to its websites since then, and claims it also shared those photos with Redfin and Realtor.com through rental syndication agreements.
Zillow and Redfin are also currently under fire from the Federal Trade Commission over their $100 million rental syndication deal.
During earnings calls last week, Zillow’s and CoStar Group’s CEOs indirectly traded barbs, with the former’s Jeremy Wacksman stating that Zillow will ignore the industry “noise” right now, as CoStar’s Andy Florance claimed the portal was “under siege” with its growing list of lawsuits from all angles.
