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Move: Anonymous whistleblower appears to confirm fears of data theft by Zillow

New court filing alleges rampant misappropriation of trade secrets

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[Correction 1: The headline of this article is now updated to accurately reflect the statements made by Move in the subject court filing.]

Move and the National Association of Realtors state in a court filing obtained by HousingWire that Move received a letter from an anonymous whistleblower which "appears to confirm" their belief that Errol Samuelson, now the chief industry development officer for Zillow (Z), stole “multiple documents and entire databases” when he worked at Move, and that Zillow is using the stolen information, and is hiding evidence on non-Zillow electronic services.

Move and the National Association of Realtors filed suit against Zillow on March 17, 2014, after Samuelson, Move's chief strategy officer, resigned from Move on March 5, 2014, and joined Zillow as the company's second-highest paid executive on the same day.

The original lawsuit alleged breach of contract, breach of fiduciary duty and misappropriation of trade secrets and accused Samuelson of misappropriating trade secret information by acquiring it using improper means, and by copying it without authorization.

The lawsuit alleged that Samuelson's knowledge of Move's trade secrets and strategies would make it impossible for him to function in his new job at Zillow without divulging those secrets, but the whistleblower letter levies harsh charges against Samuelson.

In a new court filing obtained by HousingWire, Move and NAR say they received a letter from an anonymous whistleblower who appears to work at Zillow. In that letter, which was also obtained by HousingWire, the whistleblower says that Zillow has copies of Move’s private MLS contact database, listing count database and other databases stolen from Move.

“The plaintiffs have complained for months that the defendants are systematically hiding evidence in secret non-Zillow email accounts and file-sharing services,” Move said in the court filing. “The defendants have denied the claims, deriding them as ‘silly’ conspiracy theories and claim they have produced everything. The whistleblower’s letter appears to confirm, however, the plaintiffs’ worst fears.”

The whistleblower letter also accuses Samuelson of working at Zillow, despite being under an injunction that prevented him from working. In the court filing, Move said that Samuelson conducted “brazen violations” of the court’s injunction by working at Zillow.

From the Move court filing:

“Discussing Mr. Samuelson, the author writes: 'Was he working while on injunction? Yes, absolutely. Was he careful so you couldn’t catch him, yes, absolutely.' The letter goes on to outline several sources of evidence and potential witnesses who could corroborate the writer’s conclusions."

The letter accuses Samuelson and other Zillow employees of using Google Docs to keep the “stolen” documents off of Zillow’s computers.

“This statement – which is entirely consistent with the plaintiffs’ assertions in this case – reveals profoundly unlawful conduct,” Move said in the filing. “It is a worst-case scenario for the plaintiffs, who have for more than a year feared that the defendants stole key information for Zillow. It appears the information, including entire 13 databases, were indeed stolen and are still being used by the defendants and stored in a Google Docs application that is being used ‘for work’ at Zillow.”

In the filing, Move calls for third-party discovery in the lawsuit, saying that the letter “supports the inference that the defendants continue to hide evidence from the plaintiffs and this court about their unlawful activities.”

Move said in the filing that it is concerned about Zillow’s alleged use of Google Docs to store and use Move’s databases and “lengths to which (Zillow and Samuelson) will go” to conceal their alleged conduct.

“The defendants simply cannot be trusted to be the sole source of evidence in this case regarding their conduct,” Move said. “Nor should the defendants be permitted to limit the scope of discovery sought by the plaintiffs from third parties. Unfortunately, third parties may prove to be the only reliable sources of discovery available to the plaintiffs regarding the defendants’ misconduct.”

When contacted by HousingWire about the letter and the court filing, Zillow issued the following statement:

“Zillow has acted and will continue to act with the utmost integrity in conducting its business and in defending this litigation,” Zillow said in a statement to HousingWire. “This letter is unsigned and unsubstantiated with a mix of mischaracterized facts and false information.”

Move Senior Communications Manger Lexie Puckett told HousingWire that the allegations are troubling.

“This whistleblower letter raises extremely serious allegations about destruction of documents, theft and misuse of databases, violations of a court injunction and other illegal behavior,” Puckett said in a statement to HousingWire.

“We hope that Zillow takes no steps to retaliate against the whistleblower, and that no further destruction of evidence in this case occurs,” Puckett continued. “We find it especially troubling that confidential industry data and agent websites may have been illegally accessed and used by Zillow for its own purposes. That is a matter of great concern to our partners in the industry.”

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