After a stint of legal flexing, the intense but short-lived battle between Zillow and McMansion Hell has ended in compromise: Zillow will cease any further legal action, and blog creator Kate Wagner will stop using listing photos displayed on Zillow moving forward. 

  • Blogger Kate Wagner will discontinue use of Zillow images and the real estate giant will stop any further legal action.

After a stint of legal flexing, the intense but short-lived battle between Zillow and McMansion Hell has ended in compromise: Zillow will cease any further legal action, and blog creator Kate Wagner will stop using listing photos displayed on Zillow moving forward — though she will not remove any photos from Zillow used thus far.

Today Wagner’s legal counsel, the Electronic Frontier Foundation, fired back at Zillow’s cease-and-desist letter with its own legal analysis featuring a few key arguments — namely, that its client was not bound by Zillow’s Terms of Use and that her business fell within the protections of the Consumer Review Fairness Act of 2016.

“We have decided not to pursue any legal action against Kate Wagner and McMansion Hell,” said Zillow spokesperson Emily Heffter in an emailed statement. “We’ve had a lot of conversations about this, including with attorneys from the EFF, whose advocacy and work we respect. EFF has stated that McMansion Hell won’t use photos from Zillow moving forward.

“It was never our intent for McMansion Hell to shut down, or for this to appear as an attack on Kate’s freedom of expression. We acted out of an abundance of caution to protect our partners — the agents and brokers who entrust us to display photos of their clients’ homes.”

Zillow said it was acting on behalf of its agent, broker and MLS partners by “enforcing and respecting” the usage rights they grant to Zillow. However, whether Zillow can enforce its terms of service in these types of scenarios is a legal gray area. While its approach with McMansion Hell — which pokes fun at homes of the supersize variety — received backlash and the company is halting further legal action, some agents and brokers may consider Zillow’s efforts and the blog’s decision to source its photos elsewhere as a positive.

As for future debacles of this nature, Zillow’s hands are tied when it comes to suing for copyright infringement on agents’ and brokers’ behalf. “Only the copyright owner or an exclusive licensee has the right to sue,” explained attorney Mitch Skinner of Larson Skinner PLLC. And even then, there is an extra layer: “Except for limited circumstances, copyright must be registered (or filed for registration) with the U.S. Copyright Office prior to instituting an action,” he said.

When it comes to Zillow’s agreements with listing providers, Skinner says it is likely that Zillow Group has agreed to “take reasonable measures” when protecting third-party content, but what is reasonable will vary depending on the circumstances.

The current climate around online terms of use

In addition to copyright, a legal issue at the center of Zillow and McMansion Hell’s exchange was online terms of use.

Zillow Group claimed Wagner violated its Terms of Use that prohibits “reproducing, modifying, distributing, or otherwise creating derivative works from any portion of the Zillow Site, and, which broadly prohibits any use of the Zillow Site that could harm Zillow or its suppliers.”

In response this claim, Nazer argued that the “relevant provision” of Zillow’s terms of use is not enforceable under the recently enacted Consumer Review Fairness Act of 2016. The act “invalidates any contract that constricts a consumer’s ability to review a product or service” including pictorial reviews — something Nazer says covers Wagner’s blog.

Moreover, Nader noted that in a telephone conversation, Zillow Group claimed that Wagner also violated Zillow’s third-party agreement, to which Nader replied that Wagner “is not a party” to any of those agreements and is therefore not “bound” by them.

Skinner explained how these terms of use on the internet (and their legal interpretations) typically work.

“Among other things, a contract requires ‘mutual assent,'” he said. “That means that the parties to a contract need to be aware of the terms and agree to them.

“In the case of website terms of use, that might occur from being on notice of the terms and continuing to use a website (i.e., a ‘browse-wrap’ agreement) or taking some sort of action such as a clicking-through or signing in to a website (i.e., a ‘click-wrap’ agreement).

“Court cases cut both ways regarding enforceability of these types of agreements, but generally disfavor enforcement of ‘browse-wrap’ and favor enforcement of ‘click-wrap’ and similar agreements.”)

A “determination one way or another will” be “fact dependent,” Skinner said. (Nader argued that Zillow’s Terms of Use fall under the browse-wrap category because they fail to contain “a checkbox to signal assent.”)

We won’t know for sure how this particular case would have played out, as Nader said “in the interests of compromise” Wagner would no longer use Zillow’s website nor source photos from Zillow for her blog, and both parties seem content to move on.

Editor’s note: Inman Deputy Editor Andrea V. Brambila contributed reporting for this story.

Email Marian McPherson.

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