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Four months after seven Realtors filed a class-action lawsuit against Realtor.com parent company Move for the alleged sale of unvetted and fraudulent leads, the defendants have moved the suit to the federal courts.
In an eight-page Notice of Removal filed on Tuesday, Move’s counsel said they’ve moved the lawsuit from the Los Angeles County Superior Court to the U.S. District Court for the Central District of California, due to the 2005 Class Action Fairness Act (CAFA). CAFA states that federal courts have original jurisdiction over a class action lawsuit when three benchmarks are met: the plaintiffs are citizens of a different state than the defendant, there are at least 100 members in the punitive class, and there’s an amount-in-controversy exceeding $5 million.
“Six of the seven Plaintiffs reside outside of California and Delaware and are not citizens of California or Delaware. Only one Plaintiff is a resident of California and Plaintiffs’ purported class consists of real estate agents across the United States,” the filing said of the first standard for minimal diversity.
“As Plaintiffs allege, Move, Inc., and Move Sales, Inc., are each citizens of both Delaware and California … providing that a corporation is a ‘citizen of any State by which it has been incorporated and of the State where it has its principal place of business.’”
As for the punitive class and alleged damages benchmarks, Move’s counsel said the lawsuit meets both as it covers any real estate agent that’s used Move’s lead generation services within the past four years. Due to the large punitive class, the amount-in-controversy is calculated to exceed $5 million, considering damages, punitive damages, restitution, attorneys’ fees and injunctive relief.
“Without conceding any merit to Plaintiffs’ allegations, causes of action, and claims for damages, restitution, and attorneys’ fees, the amount placed in controversy by Plaintiffs’ complaint satisfies CAFA’s jurisdictional threshold,” the court documents said of the amount-in-controversy requirement.
Move’s counsel said moving the lawsuit to the U.S. District Court for the Central District of California meets CAFA standards, as the Los Angeles County Superior Court is located within the Central District of California. The filing said the other defendants — Move parent company News Corp., the National Association of Realtors and Opcity — also consent to the request.
“No attorneys for Move have entered an appearance or filed any pleadings or other papers responding to the Complaint in the Superior Court,” the court document read. “Move will promptly give written notice of the filing of this Notice of Removal to Plaintiffs and will promptly file a written notice, along with a copy of this Notice of Removal, with the Clerk of the Los Angeles County Superior Court and serve it on all parties.”
According to Bloomberg Law, the Notice of Removal is all it takes to move a case to the federal dockets. However, the plaintiff’s counsel can move to have the case sent back to state court. The federal court can also choose to reject the Notice of Removal and push the case back to the state court.
Move declined to comment about the removal request, noting they “have no further comments regarding the ongoing litigation at this time.”
Meanwhile, the plaintiff’s counsel has yet to answer Inman’s request for comment.
Move’s Notice of Removal is the first significant update in the class action lawsuit, which was filed in August.
Seven Realtors from California, Nevada, Washington, Florida, Georgia and New York filed a class action complaint against Move for the alleged sale of unvetted and fraudulent leads through Move Network sites, including Realtor.com, ListHub and UpNest. NAR, News Corp, and real estate lead generation technology platform Opcity were named as co-defendants for their role in the alleged scheme to sell fake buyer leads.
The lawsuit claimed Move scrapes data from owned, controlled, operated and affiliated websites, web properties, digital and social media sites to gather information about users who are searching for common real estate terms (e.g., real estate, property, house, mortgage) or seem to be in the market for other large, non-real-estate purchases, such as vehicles. These users are then presented as fully-vetted, high-intent leads on Realtor.com’s suite of buyer and seller lead generation solutions, including Connections Plus, ReadyConnect Concierge (formerly Opcity), Market VIP and ListHub.
Beyond the alleged selling of no-intent leads, the suit also claims some leads cannot be verified as an “actual, living human being.” The lawsuit alleged that 40 percent to 50 percent of Realtor.com leads have no intent to purchase real estate or cannot be verified as a real person. Furthermore, they said, Realtor.com sells the same group of leads (a minimum of 36-40 per month) to multiple agents — breaking a promise of lead exclusivity.
The plaintiffs said they notified Realtor.com about the issues with low-quality leads and requested refunds. However, Realtor.com’s sales team either denied refund requests, offered credits that could be used to purchase more leads, or suggested agents purchase higher-tier subscriptions to get better lead quality. The plaintiffs claimed senior executives, managing agents, managers, directors and officers at News Corp, Move, Realtor.com and NAR knew of the complaints and “willfully and consciously” ignored the alleged sale of unvetted and fraudulent buyer and seller leads.
In a previous statement, an NAR spokesperson noted its counsel would “address these false allegations in court.”
