CoStar scores a win, but Move has another play 

CoStar has notched another victory — if just temporarily — in the ongoing legal wrangling with Move, Inc. over allegations of trade secrets theft. 

Coming off the heels of another recent win in the contentious battle, CoStar sought to dismiss two of Move's claims, which a federal judge has granted, but not without giving Move more time to come back with an amended complaint. 

Two claims of trade theft dismissed: This week's decision was focused on Move's allegations that CoStar and James Kaminsky, a former Realtor.com employee, violated the Computer Fraud and Abuse Act (CFAA) and the Comprehensive Computer Data Access and Fraud Act (CCDAFA). Kaminsky joined CoStar's Homes.com division after being laid off from a similar editorial role at Realtor.com in January, and according to Move, continued to access confidential Realtor.com files while at CoStar. 

In his ruling, U.S. District Judge George H. Wu noted that "the Court agrees with only one of the arguments CoStar has advanced for a dismissal of Plaintiffs' CFAA and CCDAFA claims … However, that limited agreement is sufficient to obtain such a dismissal."

While he determined that CoStar's argument to dismiss those specific claims had some merit, he left the door open for Move: "The Court can think of no reason why such a dismissal should be without leave to amend, especially considering this is the first challenge to those claims' 'damage or loss' allegation, let alone to the claims in general," Judge Wu wrote.

Should Move choose to proceed with an amended complaint, the company can attempt to further quantify the losses and damages incurred — if any — as a result of Kaminsky's access to Realtor.com's files after his employment was terminated. In a previous hearing, when pressed by Judge Wu to explain the "immediate harm" caused by the alleged trade secret theft, attorneys for Move likened it to the unfair competitive advantage a publication like the New York Times could gain over the Wall Street Journal were it to gain access to such files. 

What CoStar said: As with their last win, CoStar is taking a victory lap this week after Judge Wu's tentative ruling to dismiss the two claims from the case. 

"CoStar is grateful that the Court granted its motion to dismiss Move's statutory trade secrets claims," said a CoStar rep in a prepared statement to Real Estate News. "As we have said all along, Move's case is a sham — nothing more than a transparent attempt by the operator of the flailing Realtor.com to lash out at Homes.com, which has far surpassed Move's website in the marketplace."

The CoStar rep went on to needle its competitor, suggesting that "Move should drop its nonsensical case" and use the money it's spending on litigation to "focus on fixing its broken business model." Judge Wu had previously recommended in a hearing that both parties and their legal counsel focus on settling the issue out of court. 

What happens next? While CoStar continues to throw barbs, Judge Wu was clear in the ruling that the case is not over and that there are still sufficient allegations of wrongdoing or harm from Move — the onus, however, remains on Move to prove the exact nature of that harm. Move now has three weeks to file an amended complaint with revised details and claims. 

A Move spokesperson told Real Estate News over email that the company is "pleased that the judge rejected all but one of CoStar's arguments" and that Realtor.com will "proceed with all six of our claims after making minor adjustments, per the judge's instructions."