Zillow will soon be able to make use of what it hopes is a potent weapon in its arsenal to obtain direct feeds from multiple listing services: its chief industry development officer, Errol Samuelson.
Samuelson has been on leave since July 1, when a Washington state Superior Court judge granted a preliminary injunction against Zillow and Samuelson in a lawsuit filed by Zillow rival and realtor.com operator Move Inc. and the National Association of Realtors.
Now the injunction is set to expire in March, which will allow Samuelson to help Zillow obtain listings directly from brokers and MLSs before the expiration of its agreement with Move-owned listing syndicator ListHub on April 7.
But the court has also ordered an investigation into whether Zillow and Samuelson should be held in contempt for violating the injunction.
Samuelson, formerly Move’s chief strategy officer and president of realtor.com, unexpectedly jumped ship to Zillow last March. Move and NAR subsequently filed a lawsuit against him and Zillow for alleged breach of contract, breach of fiduciary duty and misappropriation of trade secrets.
The preliminary injunction barred Samuelson from performing many of the duties for which he was hired, including obtaining direct data feeds from multiple listing services, real estate brokers, franchisors and real estate associations.
Some provisions of the injunction expired on January 1, but the remaining provisions will now expire on March 22. The provisions having to do with listing feeds were originally set to be in place until the case had concluded.
Zillow won an earlier expiration date for those provisions after it agreed to move the case’s trial date to October 26 and to drop its appeal of the injunction.
Move sought to extend the original May 11 trial date in part because it is considering adding Curt Beardsley, Zillow’s vice president of industry development, and Kathleen Philips, Zillow’s chief operating officer and general counsel, as defendants in the lawsuit.
Beardsley, formerly Move’s executive vice president of industry development, joined Zillow shortly after Samuelson did.
At issue in the contempt investigation is a memo Samuelson wrote in order to transition his job responsibilities to others at Zillow, including Beardsley, after the injunction order.
Move maintains that the memo — which is not available in public filings — was a violation of the order in that it allegedly continued misappropriation of trade secrets that took place before the order was issued.
“For instance, the preliminary injunction enjoined Mr. Samuelson from ‘directly or indirectly’ engaging in ‘[e]fforts to encourage data feeds from multiple listing services,’” attorneys for Move said in a legal filing.
“Rather than adhere to the terms of the preliminary injunction, Mr. Samuelson violated the injunction just days after it was issued by writing instructions to others to take actions he had started but could not continue.”
Move noted that the first point in the memo includes Samuelson’s instructions for obtaining a direct feed of listing data from Combined Los Angeles/Westside MLS (CLAW), an MLS that earlier in 2014 had become the first in the country to delay syndication feeds to third-party sites by 48 hours.
CLAW later abandoned that strategy after the majority of the MLS’ brokers decided to send their listings to Zillow and Trulia through their own direct feeds.
“In the memo, Mr. Samuelson instructs Mr. Beardsley to send CLAW an ‘an updated agreement’ with very specific provisions,” Move’s attorneys said.
“The defendants instructed Zillow’s other employees to continue what Mr. Samuelson had started. This includes 35 instructions to Mr. Samuelson’s right hand man Mr. Beardsley, who came with him from Move (after deleting his email archive).”
In a separate legal filing, Zillow’s attorneys said, “Nothing in the injunction prevented others at Zillow from continuing Mr. Samuelson’s tasks.”
“Prior to the injunction, there was nothing wrong with Mr. Samuelson using his general experience from 20 years in the industry to talk with MLSs and brokers and obtain direct feeds,” Zillow attorneys added.
“But that is exactly Move’s goal: ensuring Move’s ongoing reliance on ListHub.”
Move declined to comment for this story, citing pending litigation.
Zillow and CLAW did not immediately respond to requests for comment.
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