A federal judge has dismissed claims of Real Estate Settlement Procedures Act (RESPA) and racketeering violations against Zillow. U.S. District Judge James Robart granted Zillow's motion to dismiss the consolidated Taylor and Armstrong lawsuit, stating that the complaint lacked sufficient factual allegations to meet the standards for the claims made.
The lawsuit, originally filed in September 2025, alleged that Zillow used its Flex and Premier Agent programs to steer consumers toward affiliated agents and more costly loans, leading to inflated home prices. An amended complaint in November added allegations that Zillow violated the Racketeer Influenced and Corrupt Organizations (RICO) Act by pushing homebuyers toward loans that did not serve their best interests.
In January, plaintiffs filed a further amended complaint, adding Real and The Frano Team as defendants and reiterating claims of inflated prices. In April, eXp Realty was added, accused of supporting Zillow's alleged "fraudulent business enterprise" by steering clients to Zillow Home Loans.
Judge Robart found that the RICO claims failed to specify who committed fraudulent acts, what communications were fraudulent, how they were fraudulent, and how the defendants participated. He also determined that the plaintiffs' claim of an unlawful enterprise between Zillow and brokerages was merely an ordinary business relationship. For the RESPA claims, the court ruled that the plaintiffs lacked standing because they did not pay the fees in question, as these fees were part of the seller broker's compensation split with the buyer's broker under the cooperative compensation model in place when the properties were purchased in 2022.
Furthermore, the judge found that for both RESPA and RICO claims, the plaintiffs failed to demonstrate how they were injured, including how Zillow Flex led to increased home prices or how using a Zillow Home Loan product caused financial harm. Zillow, in a statement, praised the dismissal of the "baseless complaint."
The court has permitted the plaintiffs to file an amended complaint by August 17. The Real Brokerage and The Frano Team were voluntarily dismissed earlier this year, and GK Properties was dismissed due to time-barred claims. Claims against eXp Realty remain pending.
