Judge Orders Analysis of Zillow Computers

October 16, 2015

A Seattle judge has ordered a neutral, independent forensic analysis of employee computers at Zillow, appearing to bolster allegations that the company stole trade secrets from realtor.com®, its leading competitor, and attempted to destroy the evidence.

Realtor.com® operator Move Inc. and the National Association of REALTORS® filed suit against Zillow last year, claiming two top Move executives shared confidential information with Zillow before accepting high-placement positions there. Former realtor.com® President Errol Samuelson and former Move Executive Vice President of Industry Development Curt Beardsley engaged in deceptive and unlawful conduct by passing highly sensitive information to Zillow CEO Spencer Rascoff and others in the run-up to their March 2014 departures from Move, the suit alleges. The information they shared related to a then-confidential potential transaction between Trulia and Move, as well as multiple business initiatives being undertaken by Move in support of realtor.com®. Samuelson and Beardsley are also named as defendants in Move and NAR’s suit.

Move and NAR have repeatedly alleged in the lawsuit that Zillow and its personnel hid and destroyed evidence to cover up unlawful conduct.

The forensic investigation of Zillow computers, to be led by a court-appointed forensic expert, will include USB devices, e-mail accounts, Zillow computers, and personal computers and tablets used by Samuelson and Beardsley.

NAR General Counsel Katherine Johnson says the judge’s order is another positive step that will help the association and Move prove its case. “NAR and Move have been saying for some time that Zillow and its employees have destroyed evidence and misappropriated confidential business information affecting realtor.com®. We’re grateful the court in Seattle has appointed a forensic expert to search for more indications of unlawful conduct,” she says.

Zillow filed a counter lawsuit against Move and NAR earlier this year after former Zillow Vice President Chris Crocker sent a whistleblower letter to Move detailing Zillow’s alleged attempts to steal realtor.com® databases and hide intellectual property in cloud storage accounts. A database was later located and produced in the case by Zillow. The metadata from the database confirmed it was indeed created and maintained by Move but was accessed by a user identified as “Curt” before and after the date Beardsley joined Zillow in March 2014.

Zillow claimed in its countersuit that the letter, which was publicized in the media, contained falsehoods as well as trade secrets that hurt Zillow’s reputation and competitive position. NAR has filed a motion to dismiss the counterclaims.

—REALTOR® Magazine