Less than a month after a judge
The new 47-page filing abandons the Racketeer Influenced and Corrupt Organizations Act allegations brought up in the previous 100-plus-page document. Instead, it focused on alleged violations of the Real Estate Settlement Procedures Act, and introduced new evidence from 12 confidential witnesses, according to Monday's complaint.
U.S. District Judge James Robart "didn't like the RICO allegations, so we stripped that out, went with RESPA claims, and added the information regarding the plaintiff losses the judge said was missing," Steve Berman of Hagens Berman Sobol Shapiro LLP, which represents the plaintiffs, told National Mortgage News. "We are 100% confident this will not be dismissed."
At the core of the lawsuit, originally filed in September by homebuyer Alucard Taylor, is the claim that Zillow's Preferred Agent referral program, formally known as Zillow Flex, deceived buyers and helped maintain high fees.
The initial complaint accused Zillow of not disclosing the referral fee it collects from Preferred Agents, which the plaintiff said violated RESPA, and that buyers must sign touring agreements advertising buyer-agent services as free, despite the agent receiving a commission.
It was combined in December with another lawsuit, which claimed Zillow pressured agents to steer buyers to its in-house mortgage business, Zillow Home Loans, for preapproval by rewarding them with more and better leads. Plaintiffs said Zillow's tools drove up what buyers paid for homes.
New evidence against Zillow
Judge Robart dismissed the case last month because it lacked statutory standing and the plaintiffs failed to identify any deceptive conduct given Zillow's terms of use and disclosure.
But the new complaint outlined the experiences of the added plaintiffs, who claimed they were pressured to use Zillow Home Loan and were not presented with other options. One plaintiff was allegedly told using the lender would lead to a faster closing, "and that he would lose the property if he tried to use someone else because that would delay his closing," according to the filing.
The document also said that if agents did not comply and failed to meet Zillow's steering quotas, they were dropped from the Preferred program, regardless of the agent's performance.
Zillow has consistently denied these allegations, and will continue to do so.
"This new complaint has just as little merit as the plaintiffs' five other attempts, which have all been unsuccessful," a company spokesperson said. "A federal court dismissed every one of their claims last month, and our position hasn't changed since then: the tools Zillow provides for buyers are free, transparent and optional. Any claims to the contrary are baseless. We will continue to defend this case with the same confidence we've had throughout, regardless of how many times the plaintiffs refile."
The likelihood a new complaint survives a fresh motion would be low, Keefe, Bruyette & Woods said after the dismissal.
Zillow has been
