A federal judge has dismissed a consolidated class-action lawsuit accusing Zillow of steering homebuyers toward its own mortgage arm, ruling that the plaintiffs lacked legal standing to bring the claims. The dismissal is without prejudice, giving plaintiffs until Aug. 17 to file an amended complaint.
U.S. District Judge James Robart, presiding in the Western District of Washington over the consolidated case Taylor v. Zillow (case no. 2:2025cv01818), granted motions to dismiss filed by Zillow and co-defendant GK Properties. The suit had alleged that Zillow and affiliated real estate teams violated the Real Estate Settlement Procedures Act and federal racketeering law by directing buyers to agents incentivized to refer business to Zillow Home Loans.
Why the claims were dismissed
According to the court’s ruling, plaintiffs lacked statutory standing under RESPA because they did not directly pay for the settlement services at issue in the case. The court also found the complaint failed to identify specific deceptive conduct, point to misleading representations made to plaintiffs, or show how the alleged steering practices restricted their choice of lenders during the homebuying process.
The plaintiffs, a group of homebuyers who used Zillow’s platform or its affiliated agents, had alleged Zillow operated a scheme that inflated commissions and limited competition among mortgage lenders in violation of federal law.
Reaction from both sides
A Zillow spokesperson said the claims were unfounded. “These claims against Zillow and its partners were completely baseless. The court rejected the plaintiffs’ entire lawsuit,” the spokesperson said.
Plaintiffs’ attorney Steve Berman signaled the litigation is not over. “This case is not over,” Berman said. “We believe Zillow is plainly violating RESPA by steering clients to Zillow Home Loans.” Berman’s clients intend to file an amended complaint before the Aug. 17 deadline.
What it means
Verified facts: The court dismissed the RESPA and RICO claims without prejudice for lack of standing and insufficient specificity, and set an Aug. 17 deadline for an amended complaint. Attributed statements: Zillow and plaintiffs’ counsel each characterize the outcome differently, consistent with their respective positions in ongoing litigation.
RealtyWire analysis: The ruling is a near-term win for Zillow but leaves the underlying steering allegations unresolved, since the court’s objection centered on pleading deficiencies and standing rather than a finding that the alleged conduct did not occur. The case adds to a broader wave of litigation testing how real estate portals structure referral relationships with lenders and agents.
What to watch: Whether plaintiffs’ amended complaint, due by Aug. 17, addresses the standing and specificity problems the court identified, and whether the case proceeds to discovery if it survives a renewed dismissal motion.
Source: court docket (Justia)
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