CoStar has notched yet another procedural win in its legal battle with Move, the parent company of Realtor.com.
In a ruling issued Tuesday, Judge George H. Wu of U.S. District Court in Los Angeles granted CoStar’s motion to dismiss two of Move’s claims in its first amended complaint.
The claims alleged violations of the Computer Fraud and Abuse Act, as well as the Comprehensive Computer Data Access and Fraud Act, which were the plaintiffs’ two statutory federal and state trade secret claims. Both claims were aimed at CoStar and James Kaminsky, the former Realtor.com employee at the center of the legal battle.
Under the terms of Wu’s ruling, Move has the opportunity to amend its claims and refile its complaint within three weeks. In an email, a Realtor.com spokesperson confirmed that the company plans to further pursue litigation.
“We are pleased that the judge rejected all but one of CoStar’s arguments. We plan to proceed with all six of our claims after making minor adjustments, per the judge’s instructions,” the spokesperson wrote. “We look forward to moving ahead with our claims in the discovery process and having our day in court.”
Initially filed by Move in July, the lawsuit centers on Kaminsky, a former Realtor.com employee who went to work at CoStar-backed Homes.com after being laid off by the Move subsidiary. In the suit, Move alleges that Kaminsky stole documents and trade secrets from Realtor.com, which he then provided to CoStar to fuel the rapid growth of Homes.com.
In total, Move’s first amended complaint had six claims. Two of them were aimed at CoStar and Kaminsky and dealt with trade secret misappropriation claims. The two other claims were aimed solely at Kaminsky and allege a breach of contract and promissory fraud.
In his ruling, Wu called Move’s allegation conclusory and wrote that the court is “not aware of any other allegation elsewhere in the [first amended complaint] that provides any more detail, or facts, in support of a ‘damage or loss’ allegation tied to Plaintiffs’” trade secret claims.
Additionally, Wu notes that in its complaint, Move did “not include allegations of ‘expending significant resources responding to and assessing Mr. Kaminsky’s breach.”
While Wu did leave it open to allow Move to file an amended complain, he also wrote that “CoStar may very well be able to factually establish a disconnect between the documents Kaminsky accessed and Kaminsky’s role at CoStar at a later stage of this case.”
In an email, a CoStar spokesperson wrote that the firm is “grateful” that the court granted its motion to dismiss the trade secrets claims.
“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. Brokers love Homes.com, and its ’your listing, your lead’ model,” the spokesperson wrote.
“Realtor.com’s approach of selling off leads is bad for brokers, and bad for consumers. After yet another reversal in Court against CoStar, Move should drop its nonsensical case, focus on fixing its broken business model, and spend its legal fees on defending the class action lawsuit that accuses Realtor.com of selling fake leads to brokers.”
