Errol Samuelson and Curt Beardsley, now Zillow Group’s top representatives to the real estate industry
Move Inc, now owned by News Corp and NR originally filed a trade secrets lawsuit lawsuit against Zillow in March 2014 accusing the two men of obliterating hundreds of gigabytes — equivalent to hundreds of thousands of pages — of evidence.
Inman.com quotes a legal filing obtained from attorneys for the plaintiffs which allege the case is about "two sophisticated executives with technology backgrounds, who anticipated that they would be sued and that their communications would be subpoenaed..."
It therefore alleges they "permanently erased data from multiple computers, smartphones, and mobile devices, deleted thousands of emails and an unknown number of text messages, used and even wrote special software programs to wipe even more data, and continued to destroy evidence even while the litigation was in progress and a subpoena was pending.”
The filing further alleges that "instead of condemning their conduct, their employer and codefendant Zillow ratified and defended it.”
Meanwhile, attorneys for Zillow, also quoted by Inman.com, maintain the vast majority of these deletions occurred before the defendants were sued, or in Beardsley’s case, before he was named a party to the lawsuit in March 2015, and that none of the defendants expected to be sued because they believed they had done nothing wrong.
“This is a case about two honorable and respected business executives who decided to leave their jobs at Move Inc, to go to work for Zillow Inc,” Inman.com quotes Zillow’s attorneys as writing.
“As a result of that decision — and the fiercely competitive business environment in which it occurred — they are now targets in an aggressive but unsubstantiated campaign of disparagement and alleged theft.
The filing quoted on Inman.com continues: “The stridency of Plaintiffs’ rhetoric is directly proportional to their dismay at losing these two industry leaders, and inversely proportional to actual evidence of wrongdoing in this case, which is nil.”
Inman.com's report adds Zillow’s attorneys contend that many of the deletions were — ironically — good-faith efforts by Samuelson and Beardsley to ensure that they did not retain Move documents when they left the company.
“The plaintiffs hope to create and exploit a Catch-22: if Samuelson and Beardsley deleted files, they are guilty of evidence destruction; but if they did not delete them (as in a few instances where, among multiple devices and accounts, a small number of Move documents were overlooked), then they are guilty of intentional theft of vitally important trade secrets,” the attorneys wrote.
Because Samuelson and Beardsley spent much of their many years at Move traveling “the loss of certain thumb drives is not at all suspicious, and does not prove intentional destruction of evidence."
Their schedules also meant they had a lot of “sensitive” personal data mixed with business data on their Move devices, Inman.com quotes Zillow’s attorneys as writing.
“Neither believed that their efforts to remove that personal data from Move devices was inappropriate, nor that it would in any way deny Move any information in which it had a legitimate interest."
Zillow’s attorneys also say all three defendants argue that the neutral forensic expert appointed to examine their electronic devices should be allowed to finish his work before any sanctions are imposed. The alternative would risk “a serious miscarriage of justice.”
“Plaintiffs hope to win by cries of ‘spoliation’ what they cannot win on the merits: either a judgment against Defendants for trade secret misappropriation, or a deeply prejudicial jury instruction that will brand Defendants as dishonest or effectively end the case by directing findings of fact,” Inman's report says the Zillow attorneys wrote.
Zillow’s attorneys also said they “promptly implemented a litigation hold” when the lawsuit was filed and the company should not be held liable for Beardsley’s actions.
But Move and NAR claim most of Beardsley’s evidence destruction occurred while he was employed by Zillow, "yet Zillow apparently did nothing to prevent him from destroying it and did not even discipline him for wiping a Zillow computer while under a subpoena,” according to their attorneys.
If Move and NAR get their way, Zillow could be up for close to $2 billion (1.77 billion) in damages just over 40 percent of Zillow Group’s market cap.