Zillow Seeks Dismissal of ‘Zestimates’ Class Action Lawsuit

Top Class Actions’s website and social media posts use affiliate links. If you make a purchase using such links, we may receive a commission, but it will not result in any additional charges to you. Please review our Affiliate Link Disclosure for more information.

On Wednesday, Zillow Inc. and Zillow Group Inc. for a second time asked an Illinois federal judge to dismiss a class action lawsuit that claims Zillow’s “Zestimate” tool is misleading.

In August, the court dismissed the first version of the Zillow class action lawsuit, which was filed in May, finding that “Zestimates are not false, misleading, or likely to confuse” and, because they are essentially Zillow’s opinions, they cannot be the basis of a consumer fraud claim. The judge allowed the plaintiffs to file an amended complaint, which they did in September.

In its motion to dismiss the amended Zestimate lawsuit, Zillow argues that the plaintiffs’ amended complaint also fails to state a viable legal claim.

“Plaintiffs now strain in their amended complaint to create alternative ways to phrase their unhappiness with Zillow’s Zestimates in an attempt to fit their claims within a viable legal framework,” Zillow says in its motion to dismiss the Zestimates class action lawsuit.

“In large part, the new formulations are simply another way of saying they disagree with the Zestimates for their homes, which the court has already held is not actionable.”

Zillow publishes information about homes on Zillow.com. For each individual home, Zillow produces a “Zestimate,” which is the home’s estimated market value based on a proprietary computer algorithm. According to the Zillow class action lawsuit, the Zestimates that are calculated and published by Zillow are erroneous and misrepresent the market value of homes.

Zillow characterizes its Zestimates as a “starting point to determine a home’s value,” but the plaintiffs are not convinced.

They claim that when Zillow publishes an estimated value for a property, it is subjecting itself to the laws governing professional real estate appraisers, which include licensing requirements and confidentiality obligations.

Zillow disputes the plaintiffs’ arguments, claiming that it is inaccurate to describe Zestimates as deceptively advertising the prices because it is not selling homes. Additionally, Zillow argues that the Zestimates are not “false or misleading statements of fact concerning … price reductions” because they concern the home’s estimated value, which is an opinion and not a fact.

The plaintiffs claim that Zestimates are consistently lower than the market value of the home. According to the Zillow class action lawsuit, Zillow intentionally produces low Zestimates to confuse homeowners and encourage them to contact real estate agents that are associated with the company.

“Once these brokers have the homeowner on the telephone, the broker then uses the confusion surrounding the Zestimate as part of their sales pitch to the homeowner to retain them,” the amended Zillow class action lawsuit says.

The plaintiffs assert that Zillow misrepresents its Zestimates as fair and accurate, and that the company does not indicate when a Zestimate is contradicted by a comparative market analysis or an appraisal. Zillow also fails to change Zestimates upon request, the Zillow class action lawsuit says.

The Zestimates class action lawsuit on behalf of themselves and a proposed Class of Illinois homeowners. They assert claims for violations of the Illinois Uniform Deceptive Trade Practices Act and violations of the Illinois Consumer Fraud and Deceptive Business Practices Act. They are seeking actual and punitive damages, injunctive relief, attorneys’ fees and costs.

The plaintiffs are represented by Barbara Andersen of Andersen Law LLC and Jeffrey Thut of Noonan & Thut Ltd.

The Zillow Zestimates Class Action Lawsuit is Patel, et al. v. Zillow Inc., et al., Case No. 1:17-cv-04008, in the U.S. District Court for the Northern District of Illinois.