It looks like the Zillow-CoStar legal battle will be moving across the country.
That’s because CoStar Group will not oppose a motion to transfer the case from the Southern District of New York to Seattle, Washington, according to a filing submitted by CoStar on Wednesday. The case focuses on Zillow’s alleged use of CoStar-watermarked photos and began over the summer.
Previously, Zillow had submitted a motion to transfer the case. The portal argued that because the company is headquartered in Washington and most witnesses in the case would be based in Washington, it made more sense for the lawsuit to be carried out in that state. Zillow also suggested at that time that CoStar 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.
Zillow also pointed out in that motion that CoStar has no special connection to New York, as the majority of employees are based in Virginia, Washington, D.C., and Baltimore — with only about 4 percent based in New York City, according to LinkedIn data.
In CoStar’s filing on Wednesday, the company explained that it had initially submitted the lawsuit in the Southern District of New York because many of the CoStar-watermarked photos that Zillow allegedly used without permission were for listings based in New York. The company also believed several witnesses would be New York-based, and noted that both companies have offices in Manhattan.
But given that Zillow has now identified 10 key witnesses in the case who are almost all based in Seattle, CoStar agreed that moving the case to Washington is a sensible move.
CoStar also noted that because Zillow is now facing multiple lawsuits in the state of Washington, including class-action suits over the Zillow Flex Agent program and Zillow Home Loans, it would likely be more efficient for Zillow — and proceedings in the case more generally — for this lawsuit to be transferred to Washington.
“Because these matters implicate the heart of Zillow’s business, it is likely that Zillow’s senior leadership will be engaged in one or both proceedings in Seattle for the foreseeable future,” the filing states. “On this basis, CoStar recognizes the practical reality that consolidating this case in the same forum may lead to efficiencies for such witnesses.”
CoStar also used the filing on Wednesday to counter previous claims by Zillow that the lawsuit was part of a “broader playbook” CoStar employs against its competitors. CoStar called such claims “outlandish,” given that Zillow is now facing lawsuits from several parties, including the Federal Trade Commission.
“Contrary to Zillow’s tired assertions that it is the victim, Zillow is (widely) being held accountable for its many wrongdoings,” the filing states. “This lawsuit is but one example.”
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.
