Move sues CoStar, alleges employee ‘spied’ to boost Homes.com 

This week, two of the leading home search portals took their rivalry to the next level — and to the courtroom.

Realtor.com parent company Move Inc. filed a lawsuit in a U.S. District court in California against CoStar and a former employee who Move accused of spying for CoStar's benefit. Move said the employee repeatedly accessed confidential information after leaving Realtor.com and joining CoStar and Homes.com.  

"There is nothing wrong with lawful — even intense — competition. But competitors should never be allowed to cheat and steal to get ahead," Move lawyers wrote in the complaint.

What is the lawsuit about? The former employee at the heart of the lawsuit is James Kaminsky, who had worked at Realtor.com since 2015 and previously headed up editorial strategy and content development for the site. According to the complaint, Kaminsky was laid off by Realtor.com in January but started a similar position with CoStar leading content for Homes.com in March. 

Move lawyers claim that after being hired by CoStar, Kaminsky continued to log into and access important, confidential information and trade secrets related to Realtor.com's content, editorial strategy, staff and audience. In total, Move claims that Kaminsky "spied on Move's confidential documents at least 37 times after CoStar hired him."

"As he departed Move, Mr. Kaminsky stole confidential business information, sending it to his personal email account on the last day he had access to Move's computer system," the complaint reads. 

"He established surreptitious, undetected ongoing access to allow himself (and, thus, CoStar) to spy on Move's highly confidential documents stored on protected computer systems. Then, attempting to cover his tracks, Mr. Kaminsky deleted nearly a thousand files from his Move computer and wiped clean his entire browsing history before returning the device to Move."

What the suit may really be about: Realtor.com and Homes.com have been engaged in an ongoing, and at times heated, feud about web traffic, with each company claiming it is the most popular home search portal after market leader Zillow. Leaders of both companies — CoStar CEO Andy Florance and Realtor.com/Move CEO Damian Eales — have traded barbs via trade media and industry conferences, but this week's lawsuit elevates the battle to the courthouse.

Move lawyers highlighted the contentious rivalry between the companies in the legal complaint, providing context as to why Kaminsky's access of Realtor.com data and information can provide CoStar with "a massive unfair competitive advantage."

"CoStar is aggressively trying to increase traffic to Homes.com because online traffic and the number of site visitors are key to the success of any real estate listing website and the financial results of its business," the complaint reads. "In Mr. Kaminsky's role as Editor for Homes.com, use of the misappropriated Move information is plainly within the scope of his CoStar employment and directly benefits and aids CoStar."

"The goal, obviously, is to help CoStar unlawfully jumpstart the creation of a 'monetization engine' for CoStar by driving up website visitor numbers and increasing revenue and profits for CoStar," the complaint continues.

What CoStar had to say: "This lawsuit is Realtor.com's latest desperate attempt to distract from the fact that Homes.com has replaced Realtor.com as the number two portal according to the parties' own site-centric data gathering tools," said Gene Boxer, CoStar general counsel.

"The employee in question is a mid-level manager who writes and edits stories about condos. Safe to say he has zero input into Homes.com's strategy. And even Move's creative writing exercise doesn't pretend that CoStar itself engaged in any misconduct," Boxer added. "This is a PR stunt that is already backfiring. Realtor.com is losing the battle with Homes.com and its attempt to change the story doesn't change that reality. We look forward to prevailing in court." 

What Realtor.com had to say: A representative for Realtor.com told Real Estate News that they were unable to provide further comment on pending litigation, but said that "the court documents speak for themselves."

What happens next? Move and Realtor.com are seeking damages and legal fees and asking for a jury trial. The lawsuit was filed in California due to Move being headquartered in California and Kaminisky's employment agreement with the company being based on California employment law. Move lawyers also claim that "a substantial part of CoStar's misconduct occurred in California."