Editor’s note: The COURT REPORT is RISMedia’s weekly look at current and upcoming lawsuits, investigations and other legal developments around real estate.

Zillow class-action

Homebuyers have filed a new federal lawsuit against the listing portal, alleging that Zillow has been deceiving homebuyers and inflating purchase prices through an alleged scheme involving hidden fees paid by real estate agents, according to court documents.

Plaintiffs in the class-action lawsuit (represented by two firms behind the original seller commission litigation) claim that the prominent “Contact Agent” or “Request a Tour” buttons on property listings are misleading since it redirects them to a buyer’s agent working for Zillow instead of the listing agent representing the seller.

In a statement shared with RISMedia, a Zillow spokesperson said the lawsuit “fundamentally misrepresents how Zillow operates.”

“Contrary to (the lawsuit’s) claims, we stand by our long-held belief that buyers and sellers deserve to have the choice to work with an agent who is committed to their best interests and only represents them. We will vigorously defend ourselves against these claims,” the Zillow spokesperson said.

Court approves Zillow’s Lloyd Frink deposition

Lloyd Frink—Zillow’s co-founder, president and co-executive chairman of the board of directors of Zillow Group—in a Sept. 12 filing was asked to sit for a deposition in the Compass v. Zillow case, given he has “unique and important information that no other witness can provide,” according to court documents. 

Both parties spent significant time wrangling over the details of what information Frink could provide in a deposition, with the judge in the case initially ruling that Compass had to depose other Zillow executives before they could schedule a time for Frink.

Despite Zillow’s objection that Frink would not “elicit unique information pertinent to (Compass’) motion for a preliminary injunction,” the court granted the request to compel, and the deposition of Frink is set to proceed on Sept. 24

Buyer plaintiffs can amend lawsuit against Howard Hanna

Federal judge Wendy Beetlestone of the Eastern District of Pennsylvania is allowing homebuyer plaintiffs in a commission class-action lawsuit to restart their litigation against independent brokerage Howard Hanna, after she dismissed much of the suit back in June.

This week, Beetlestone overruled objections by Howard Hanna, letting lawyers for the plaintiffs update claims and accusations in order to argue the company participated in a conspiracy to inflate commissions.

In her ruling, Beetlestone noted that judges are supposed to allow these types of amendments unless they have a specific reason not to—for instance, if the plaintiff has created an “undue delay” or if they have already failed to address problems a judge identified in their lawsuit. 

Howard Hanna had argued this last point, but Beetlestone called the company’s arguments “meritless,” calling their arguments “disingenuous” based on the fact that plaintiffs have not yet amended their complaints even once.

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