NEW YORK CITY—As day two of four in the Compass-Zillow preliminary injunction hearing got underway on Nov. 19, Errol Samuelson, Zillow’s chief industry development officer, finished up on the stand, with Zillow CEO Jeremy Wacksman next to raise his right hand. The hearing took place in courtroom 14C at the Daniel Patrick Moynihan U.S. Courthouse in downtown Manhattan with Judge Jeannette Vargas presiding.

The trial—officially an “evidentiary hearing”—is not to decide the merits of the case. Rather, it is for Vargas to decide whether she will block Zillow’s rules from going into effect while the rest of the lawsuit plays out, with Compass claiming it (as well as agents and consumers) will be “irreparably harmed” if the rules are allowed to remain in place. 

While Zillow attorney Bonnie Lau interrogated Compass CEO Robert Reffkin during Tuesday’s afternoon session, on Wednesday, Compass attorney Kenneth Dintzer probed Zillow’s top executive during a long and seemingly disjointed line of questioning.

Dintzer presented an extensive series of slides depicting comments and responses Wacksman provided during a prior deposition. He also displayed Zillow emails in which the terms “carrots” and “sticks” were used to show how the company rewarded brokerages in favor of its Listing Access Standards and penalized those not in favor. Those accepting of the new standards received carrots, while those not on board received sticks, largely meaning warning letters about non-compliance with the new rules. What carrots represented was never explained, although in previous court proceedings, documents showed Zillow had considered offering its products and “more direct payment for content.”

Dintzer also questioned Zillow’s $100 million rental agreement with Redfin, along with Wacksman’s relationship with Redfin CEO Glenn Kelman, establishing a timeline of when the two now “partners and competitors” communicated, with multiple texts shown on the screen in court. Wacksman was asked to confirm whether or not they discussed various topics, such as NAR’s Clear Cooperation Policy, the Listing Access Standards, etc. One exchange of texts shown focused on a date when Wacksman was vacationing in England.

“I work even when I’m on vacation,” he said. “I’m just in a different location.”

Even though one internal Zillow missive mentioned “isolating Compass and other bad actors,” Wacksman appeared calm and confident throughout his time on the stand. When Dintzer at one point called him Mr. Redfin, even the judge cracked a smile.

It was eventually established with no disagreement that Zillow’s Listing Access Standards can vary based on the rules of different MLSs across the country, though its goal is national in scope.

A Zillow attorney followed Dintzner with a line of questioning that allowed Wacksman to talk about his career, Zillow goals and more.

Earlier in the day, Zillow’s Samuelson finished testifying, questioned by Zillow’s Lau. He gave a brief history of the portal giant before explaining why the Listing Access Standards are a must in order for the company to continue growing.

“Buyers want to see listings immediately,” he said, referring to how private listings hurt the company. “They want to see all the options. If they don’t see them all on Zillow they could lose trust and go to another platform. It’s critical for us to be able to provide accurate information.”

Samuelson explained to the court that if someone sees a private listing they very well could be compelled to go with the brokerage that has it, with that company getting a double-ending, meaning both the buyer and seller commission.

“That can lead to agents from a small brokerage leaving to join a bigger one so they can have access to more private listings,” he said. 

Samuelson also disputed Compass’s injunction attempt, stating that “they want it both ways. If they can sell a private listing, fine. But if not, then they want it on the MLS. That’s unfair for Zillow, which has invested so much in building the company.” Samuelson added that Zillow should not have to put listings that have not sold on their website without price reductions, days on market, etc. “If we have to show ones that are stale, it again undermines user trust.”

Samuelson went on to contend that sellers who have private listings don’t understand the risks of not being on an MLS, and that agents likely are not explaining it all.

On rebuttal, Compass showed numbers that seemed to indicate the firm is being singled out, such as 700 Compass violations compared to 17 for second-place Howard Hanna.

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