Heavy-hitters back Zillow’s SCOTUS petition in securities case 

An investor lawsuit filed nearly five years ago could be in the hands of the U.S. Supreme Court soon — if the justices decide to examine the case. 

In early June, Zillow filed a petition for a writ of certiorari (a request for review) asking the high court to weigh in on a class-certification ruling in a 2021 case led by plaintiff Jeremy Jaeger.

Last week, several business groups and legal policy organizations — along with academics, former SEC officials and former U.S. Attorney General William Barr — submitted amicus briefs urging the court to grant Zillow's petition, adding some heft to the search giant's request.

How we got here: The failure of Zillow Offers

In November 2021, two weeks after Zillow announced it was shuttering Zillow Offers, a shareholder sued the portal alleging that Zillow made misleading statements about its iBuying business. The company did not tell investors about the unpredictability of its home price forecasts, the filing claimed, and the inaccuracy of those forecasts ultimately led to the failure of Zillow Offers — and a "precipitous decline" in Zillow's stock price, the complaint alleged.

A district court judge granted the plaintiff's bid for class certification in August 2024, increasing Zillow's financial exposure and prompting the portal to appeal the decision. The case was stayed while under review by the Ninth Circuit Court, but after the appeals court affirmed the class certification ruling in September 2025 (and denied Zillow's request for a rehearing), the stay was lifted, with a trial date now set for Sept. 13, 2027.

The plaintiff is being represented by Hagens Berman, a Seattle law firm that represented homesellers in the Moehrl commissions case and homebuyers in the Taylor case, which accused Zillow of RESPA and RICO violations related to its referral programs. The Taylor case was dismissed in late July.

What Zillow wants from SCOTUS

Zillow isn't asking the Supreme Court to review or assess the allegations in the original complaint, but instead focuses its petition on one core question: Did the plaintiff meet the standard for class certification based on precedents set in other securities fraud cases? 

While the lower courts said "yes" in Jaeger v. Zillow, the petition notes that appeals courts have interpreted the standard differently in other cases, and the high court should be the one to either resolve that split or "summarily reverse" the Ninth Circuit's ruling. 

'Front-end' vs. 'back-end' statements: The petition gets deep into the weeds of legal standards, theories and case law. But at a high level, the issue is whether Zillow's optimistic public statements about Zillow Offers were misleading in light of its eventual decision to end the program, and to what extent its "misstatements" affected the company's stock price. 

Zillow argues that for a securities case to qualify as a class action, "back-end" or after-the-fact disclosures — in this case, the admission that its home-pricing algorithm couldn't accurately forecast price changes in a volatile market — must directly counter earlier "front-end" statements. 

Zillow claims its earlier statements only mentioned the company's "progress" on improving its pricing models, not that those models were working with high accuracy. Further, the petition states that "Zillow's difficulties in predicting home prices had earlier been specifically quantified and disclosed to the market seven times in press and analyst reports, including through Bloomberg, without any stock price reaction." 

Thus, Zillow suggests, the plaintiff was cherry-picking when making a bid for class certification: "When a company announces bad news that causes a stock price decline, an investor can scour the company's prior public statements, point to prior statements discussing the same general subject as the adverse event, and claim that the statements prevented the company's stock price from declining earlier by concealing the risk of loss."

Betting on precedent: Zillow's arguments rest on a ruling in a similar shareholder lawsuit from 2021 known as Goldman. The case was reviewed by the Supreme Court, which wrote in its opinion that the appellate court erred in considering overly "generic" front-end statements when granting class certification. It sent the case back to the Second Circuit Court of Appeals, which agreed that the statements must match closely and instructed the lower court to decertify the class. 

The Third and Ninth Circuit courts, meanwhile, have interpreted the standard more loosely, requiring only that the statements relate to the same general topic.

Zillow's appeal to the Ninth Circuit was unsuccessful, with the court upholding the class certification in the Jaeger case on the grounds that "a disclosure need not precisely mirror the earlier misrepresentation."

Business, legal groups back Zillow's petition

In three separate amicus briefs filed with the Supreme Court on July 27, several organizations, academics and former government officials threw their support behind Zillow's request for review. 

Their core argument is that the more liberal "close enough" standard for front- and back-end statements opens the door to a surge in class certifications in securities fraud cases, removing "an important guardrail this Court established to protect companies from often meritless actions," as one brief stated. 

'Crushing liability': That brief, submitted by two former SEC officials and three law professors, points to a broader procedural issue, citing the Supreme Court's precedent of arguing for a "narrow construction of an implied right of action" in securities cases — meaning courts should not stretch the rules in plaintiffs' favor.

Allowing a looser interpretation of the class certification standard, the brief argues, could result in more companies facing "crushing liability for securities claims." The brief also cites a number of cases affirming the principle that the disconnect between a company's past optimism and later poor results does not amount to fraud. 

A threat to 'American competitiveness': Another amicus brief was filed by the Manhattan Institute — a public policy research foundation — and partners at Torridon Law, including the firm's co-founder and former U.S. Attorney General Bill Barr. It emphasizes the risks to public companies and "American competitiveness" should the Ninth Circuit's "lax approach" be upheld. 

The potential "deluge of lawsuits" from investors would "impose a 'litigation tax' on productive enterprise," the brief adds. 

'Any reasonable investor' should have understood the risk: The last brief was submitted by representatives of the U.S. Chamber of Commerce, the security industry trade group SIFMA, the Washington Legal Foundation and Business Roundtable, who called the Ninth Circuit's decision "plainly wrong."

Zillow's remarks about its "progress" to improve its pricing model implied it was struggling, the brief argues. "The world is littered with failed inventions, would-be scientific discoveries, and business ventures that showed initial promise but never panned out."

Zillow "admitted to facing difficulties," it states, "which would place any reasonable investor on notice that its efforts to develop a pricing algorithm might not succeed."

What's next for the case

The plaintiffs have until Aug. 11 to file a response to Zillow's petition and the amicus briefs. 

The Supreme Court is currently set to consider the petition at its Sept. 28 closed conference, though that could be rescheduled — particularly if any of the involved parties request an extension of filing deadlines. 

If Zillow's petition is denied, the Ninth Circuit's ruling — and the class certification — would stand. If the court opts to review the case, it could affirm the appellate court's ruling, reverse it or send the case back for further review.