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Zillow banned from National Association of Realtors’ 2016 events

Battle over alleged trade secret theft moves beyond courtroom

Over the last two years, the biggest names in online real estate have battled it out in court over the alleged theft of trade secrets, but now the billion-dollar battle between Move, the National Association of Realtors, Realtor.com and Zillow is moving beyond the courtroom – to the exhibit hall.

According to a report from Geekwire, which HousingWire subsequently confirmed, the National Association of Realtors banned Zillow from exhibiting at any of NAR’s events for the remainder of 2016.

The reason? The ongoing legal battle between Move, which operates Realtor.com for the National Association of Realtors, and Zillow.

“In light of the ongoing litigation, we elected not to permit Zillow to exhibit at or sponsor NAR's meetings this year,” the National Association of Realtors said in a statement to HousingWire.

Now, the web between all the combatants is a bit tangled, but here’s a quick refresher on the biggest fight in the history of online real estate.

Move, which is now owned by News Corp, claims that Zillow owes the company $2 billion in damages over allegations of trade secret theft involving Errol Samuelson, who was once Move's chief strategy officer.

Move sued Zillow after Samuelson resigned from Move on March 5, 2014, and joined Zillow as the company's second-highest paid executive on the same day.

Move filed suit against Zillow after Samuelson left, alleging that Samuelson, and by extension Zillow, stole trade secrets and proprietary information. Further, Move alleges efforts to cover up the claimed theft.

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 eventually expanded to include Curt Beardsley, who is also a former Move employee. Beardsley is now vice president of industry development at Zillow.

Last month, the judge overseeing the lawsuit handed down a ruling on a “spoliation” hearing that took place in April.

At issue in that six-day hearing that included testimony from Zillow Group CEO Spencer Rascoff, Samuelson, Beardsley and more, was whether Zillow, Samuelson and/or Beardsley destroyed evidence related to the lawsuit that would have negatively impacted Move’s ability to receive what it felt would be a fair trial.

Specifically, Move claimed that Zillow, Samuelson and Beardsley destroyed evidence stored on various devices (hard drives, other portable storage devices, computers) after the initial lawsuit was filed, in clear violation of the court’s instruction to the contrary.

The judge ruled neither Zillow no Samuelson acted “in bad faith” with respect to any evidence that may have been destroyed. Beardsley, on the other hand, was “unclean” in the eyes of the judge.

“With respect to his handling of certain devices and information, Mr. Beardsley’s conduct was willful and in bad faith and is sufficiently prejudicial to warrant the provision of a jury instruction or instructions related to the lost or missing evidence,” the judge wrote.

And now, with the trial scheduled to begin in a matter of days, the National Association of Realtors is taking action to ensure that Zillow won’t appear at any of its events for the remainder of the year, including the Realtor Broker Summit later this month and the Realtors Conference & Expo in Orlando in November, which is NAR’s biggest event of the year.

“It's unfortunate that NAR felt it necessary to deny our application to exhibit at their 2016 events,” a Zillow spokesperson said in a statement. “We look forward to seeing all our industry partners at one of our many upcoming Zillow Group events.”

A spokesperson at Move said the company is not commenting on the situation.

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