Court merges 2 class-action cases against Zillow 

A federal judge has approved the consolidation of two class-action suits accusing Zillow of using illegal kickbacks to boost its mortgage business — a move that streamlines what could become a lengthy, high-stakes RESPA battle for the home search giant.

In an order filed Dec. 10, U.S. District Judge James L. Robart granted the plaintiffs' request to merge the Taylor v. Zillow and Armstrong v. Zillow cases, concluding that the matters involve substantially similar allegations and overlapping proposed classes. Consolidation, the judge wrote, would "enhance fairness to all parties" and "aid in achieving efficiency and economy in what is likely to be expensive and complicated litigation." 

More on the Taylor case: Originally filed in September, the case was expanded in an amended complaint on Nov. 19. The updated filing alleges that Zillow and several real estate teams engaged in a scheme to compel agents to steer buyers to Zillow Home Loans (ZHL) in violation of the Real Estate Settlement Procedures Act (RESPA). The filing claims that agents risked being dropped from the Zillow Flex program if they recommended lenders other than ZHL or failed to meet certain quotas.

The amended complaint also added two RICO claims, arguing that Zillow and participating real estate brokerages constitute an "enterprise" that uses deceptive digital funnels, scripted sales tactics and undisclosed fees to unlawfully keep commissions "high and inflexible." The filing argues that prospective homebuyers who click "Contact Agent" or "Request a Tour" believe they are contacting the listing agent but are routed to a Zillow Flex agent instead and not informed about Zillow's 40% Flex referral fees.

More on the Armstrong case: The second lawsuit, Armstrong, was filed on Nov. 7 and echoed many of those RESPA claims but also raised concerns about Zillow's Premier Agent ecosystem and the structure of its lead-generation programs. The complaint alleges that Zillow pressures agents in its Premier Agent and Flex programs to steer buyers to Zillow Home Loans for pre-approval. Agents who sent more clients to Zillow's mortgage arm were allegedly rewarded with extra or higher-quality leads, which the plaintiffs characterized as "kickbacks."

Zillow has firmly denied the claims, saying its programs comply with RESPA and that the lawsuits mischaracterize common industry practices.

Why consolidation matters: By merging the two class actions, the court effectively accelerates the path toward a unified fight over Zillow's mortgage business and advertising structure. Consolidation also reduces duplication, focuses discovery and ensures that rulings apply consistently across all proposed plaintiffs — an advantage for both the court and the litigants. 

For Zillow, the move means it will now defend a single, more comprehensive case rather than two parallel complaints. For plaintiffs, consolidation creates a broader class and a clearer litigation strategy heading into the next phase, which will likely involve challenges to class certification and motions to dismiss.

Once the court rules on an interim counsel motion, plaintiffs are expected to file their consolidated complaint within two weeks. Zillow's response will follow five weeks later, according to the newly approved schedule.