CoStar tallies win in ongoing Realtor.com trade secrets suit
A U.S. District Court judge has denied Move’s request for a preliminary injunction and questioned claims of “irreparable harm” to Realtor.com.
Key points:
- Judge George Wu also sided with CoStar’s motion to dismiss additional claims from Realtor.com parent company Move, Inc.
- In a tentative ruling, the judge repeatedly called out the speculative nature of harm that Move claims to have suffered.
- Judge Wu had previously encouraged the parties to resolve the issue outside of court.
The judge presiding over the trade secrets lawsuit from Realtor.com parent company Move, Inc. against a former employee and home search rival CoStar and Homes.com, has sided with CoStar in Move's request for an injunction.
Additionally, U.S. District Court Judge George Wu sided with CoStar's motion to dismiss additional claims from Move.
The ruling was preliminary but Judge Wu's response was detailed, citing a number of issues with Move's case and claims, notably Move's "refusal to engage in discovery prior to the hearing" and inability to prove irreparable harm in James Kaminsky's alleged access of confidential documents after his termination from Realtor.com and subsequent hiring by CoStar and Homes.com.
"In sum, CoStar asserts that Move has no evidence of any connection between Kaminsky and CoStar's SEO efforts, and the available evidence indicates that CoStar does not have, and has not used, any of the materials in question," the court's tentative ruling states. "Move gives the Court no reason based in evidence – not speculation – to question these assertions."
Judge Wu questioned Move's request for an injunction against CoStar and former Realtor.com editorial staffer James Kaminsky and repeatedly highlighted the speculative nature of the damages or harm Move claimed.
"CoStar has summarized Move's thinking as 'speculating that perhaps stale documents about its news articles and their viewership, which CoStar does not possess, might in the future somehow help CoStar's already successful SEO division (which sworn testimony shows Kaminsky has no ties to), despite that the only record evidence demonstrates otherwise,'" Judge Wu wrote.
"The Court would agree with CoStar and Kaminsky that Move has not made a satisfactory showing of likely, imminent, irreparable harm."
How market position factors in
Judge Wu also focused on Move's argument that loss of market position — of which Realtor.com and Homes.com are direct competitors — could "constitute irreparable harm."
"If Move is relying on a loss of 'market position' because of Kaminsky's access to the documents at issue, Kaminsky asserts that Move has no evidence of such a harm. Certainly Move has not cited the Court to any," Judge Wu wrote in his tentative ruling on Move's preliminary injunction request.
Additionally, Judge Wu said that Move's other efforts "to get around the fact that it has not developed actual evidence to support the required threat of imminent, irreparable harm" were "equally unconvincing."
How these companies got here
The decision comes after months of mud-slinging — at industry events, in trade media, and in courtrooms — between lawyers and the leaders of the companies as competition in the home search space for agent loyalty and consumer attention reaches a fever pitch. CoStar CEO Andy Florance had previously referred to the lawsuit as a "PR stunt" and the claims against Kaminsky and CoStar as "laughable."
And in a prior hearing, Judge Wu had encouraged the parties to settle the dispute out of court, but lawyers for both companies vowed to continue to fight.
CoStar execs continue to take a defiant stance and have strong words for Realtor.com and Move's legal action.
"As we have said from the beginning, this case — which Move has tried to weaponize in the press — is a PR stunt in response to the fact that Move is failing in the marketplace," CoStar counsel Gene Boxer said in a statement provided to Real Estate News. "Move's baseless claim for relief, which fell flat today, cannot change that reality. We look forward to ensuring that Move is held to account for its falsehoods."
A Realtor.com spokesperson told Real Estate News that "this ruling is just one step in the process" and that the company "looks forward to the discovery period and having our day in court."