News reports this week claim Move, which operates Realtor.com for the National Association of Realtors (NAR) in the US plans to seek $2 billion in damages from Zillow in a long running case alleging former employees stole its trade secrets.
Move claims former chief strategy officer Errol Samuelson and another executive Curt Beardsley "abruptly" resigned from Move on 5 March 2014, and took up roles at Zillow the same day, with Samuelson becoming the company's second-highest paid executive.
Move, now owned by News Corp, immediately started legal proceedings alleging Samuelson and Beardsley stole company trade secrets and proprietary information and then attempted to cover up the theft.
The original lawsuit alleged breach of contract, breach of fiduciary duty and misappropriation of trade secrets and accused Samuelson of acquiring trade secrets using improper means and copying it without authorization.
Move further alleged that Zillow was hiding or deleting evidence.
The extensive legal wrangle includes the alleged release last year of a whistle blower letter from former Zillow Vice President Chris Crocker to Move’s attorneys, claiming misuse of stolen Move data and other misconduct by Zillow.
Zillow filed a counterclaim saying Move and NAR defamed the aggregator and revealed trade secrets by publicizing the letter without ascertaining whether its contents were factual.
In addition the investigation into the claims of evidence destruction by Zillow, Samuelson, and Beardsley has been underway, following a series of court orders in 2015. The hearing is scheduled for April 13 and 14, and the case is set to go to trial June 6.
According HousingWire, legal documents it obtained show Move calculates the alleged theft cost the company $2 billion.
Should the claim be upheld, such a cost would clearly be very damaging to Zillow which this year reported a net loss of $91.1 million in 2015, a large portion of which it said was a direct result of the stoush with Move.
Zillow reported $8.1 million in legal fees related to the Move/News Corp lawsuit in the fourth quarter of 2015, and $27.1 million for all of 2015, negatively impacting Zillow’s total financial results.
Zillow chief financial officer, Kathleen Phillips told investors the costs related to Zillow’s “necessary defense” against Move’s claims are projected to rise from $27.1 million in 2015 to $36 million in 2016.
Move, on the other hand, says it spent $7 million in legal fees related to the Zillow lawsuit in the fourth quarter.
HousingWire predicts however that Move will not be awarded the full amount, comparing the case to that of a relatively similar proceedings in 2012, where Samsung was only required to pay $548 million to Apple after originally being ordered to pay $1 billion of a $2 billion claim.
Zillow told HousingWire that Move's claims in this case are without merit and News Corp’s calculations of damages are "baseless".
Speaking to HousingWire, a Move representative counters:
"Zillow's claim that the litigation is 'baseless' is proven false by a mountain of evidence of Himalayan proportions, including proof that numerous documents, texts and emails were destroyed and computers, smartphones and other storage devices were intentionally wiped or destroyed."