Judge dismisses case alleging Zillow violated RESPA, RICO laws 

Zillow scored a key court victory today as the judge dismissed charges that it violated the Real Estate Settlement Procedures Act (RESPA) by steering customers to Zillow-affiliated agents and Zillow Home Loans, which also resulted in inflated commissions.

In the case known as Taylor, Judge James Robart with the U.S. District Court Western District of Washington approved the motions to dismiss filed in February by Zillow and fellow defendant GK Properties. When requesting the dismissal, the defendants had argued that the plaintiffs failed to state a claim and instead submitted a lengthy complaint that was "heavy on filler but thin on substance."

The plaintiffs are getting another chance, however. The judge is allowing them to file an amended complaint by Aug. 17, stating that the court "cannot conclude that Plaintiffs are entirely incapable of curing these defects" from their earlier filings. 

This amended complaint can include additional defendants, such as eXp, which the plaintiffs attempted to add to the case in April. Another original defendant, The Real Brokerage, was dismissed from the case in June. 

Why the judge ruled in favor of Zillow: In his order granting Zillow's motion to dismiss, Robart said the plaintiffs failed to support their RESPA claim because "Plaintiffs did not directly pay for the contested settlement services" — which are typically paid by the homesellers — and thus "lack statutory standing," he wrote in the July 27 filing.

Robart also noted that the plaintiffs failed to identify "any deceptive conduct or problematic representations by the Zillow defendants" that misled consumers, pointing to Zillow's Terms of Use agreements and other disclosures spelling out how Zillow connects customers with partner agents.

As for the steering arguments, Robart said plaintiffs failed to show specifically how Zillow's practices undermined the homebuying process or restricted information about lender choices.

"In light of Zillow's explicit disclosures, consumers had notice of the challenged conduct and the means to avoid it," according to the filing.

What Zillow had to say: In response to the judge's decision, a Zillow spokesperson said the ruling "confirms what we've said from the start: these claims against Zillow and its partners were completely baseless. The court rejected the plaintiffs' entire lawsuit, even after five rounds of amended complaints, finding that every claim they asserted in their 100+ page complaint was deficient."

"Buyers choose how and whether to use" Zillow's tools, the spokesperson added. "Zillow will continue building tools that give consumers more transparency and choice in the home-buying process."

How we got here: The original complaint accused Zillow of running a "fraudulent enterprise" that tricks buyers into working with Zillow-affiliated agents. Those agents, the plaintiffs alleged, were pushed to send business to Zillow Home Loans in violation of RESPA.

The class-action lawsuit was initially filed in September 2025 by the law firm Hagens Berman, a key player in the real estate commissions litigation, with RICO claims added two months later. The case was merged with the Armstrong case in December. Filed in November, Armstrong v. Zillow had also raised concerns about Zillow's Premier Agent structure and lead generation, accusing the company of rewarding agents who sent more clients to Zillow's mortgage division with extra or higher-quality leads.

Related litigation: Zillow still faces claims in a similar case filed in January by a Washington state real estate agent. That case, known as Dupuis, also alleges that the search giant incentives its partner agents to steer buyers to Zillow Home Loans in violation of state and federal antitrust laws.

Real Estate News has reached out to Hagens Berman for comment.