Zillow wins dismissal of RESPA claims in Flex referrals case

While Zillow’s legal battles on other fronts may be heating up, for now, it no longer has to contend with claims of Real Estate Settlement Procedures Act (RESPA) and racketeering violations. On Monday, Seattle-based federal court Judge James Robart granted Zillow’s motion to dismiss the combined Taylor and Armstrong lawsuit. 

According to the ruling, the complaint does not contain enough factual allegations to satisfy the standards for the claims the plaintiffs made. 

“Plaintiffs’ claims of lack of notice are implausible given Zillow’s express, repeated disclosures,” the ruling states. “Plaintiffs fail to plead specific facts showing how Defendants’ practices actively undermined the home-buying process, restricted informed lender choice, or eroded trust in real estate professionals.”

Originally filed in mid-September 2025, the lawsuit claims that the portal tricks consumers into using agents affiliated with Zillow through its Flex and Premier Agent programs, resulting in inflated home purchase prices. In an amended complaint filed in mid-November, Taylor also alleged that Zillow violated the Racketeer Influenced and Corrupt Organizations (RICO) Act by pushing homebuyers to apply to more costly loans that do not serve their best interests. 

In December 2025, the lawsuit was consolidated with a second suit known as the Armstrong suit, which was first filed in early November, claiming that Zillow pressures agents in its Premier Agent and Flex lead programs to steer buyers to Zillow Home Loans for their purchase mortgage pre-approval. Allegedly, agents who send more clients to Zillow’s mortgage arm for their pre-approvals received extra or higher-quality leads in exchange.

In a first amended complaint filed in the consolidated lawsuit in early January, the plaintiffs again claimed that Zillow tricks consumers into using agents affiliated with Zillow through its Flex and Premier Agent programs, resulting in inflated home purchase prices. The complaint also added Real and The Frano Team as defendants. 

In a second amended complaint filed in April, the plaintiffs added eXp Realty as a defendant, accusing it of supporting Zillow’s “fraudulent business enterprise” by allegedly steering clients to Zillow Home Loans for their financing needs.

Failure to identify necessary information

For the RICO claims, Judge Robart found that the complaint failed to identify necessary information such as who committed the fraudulent acts, what communications were fraudulent, how they were fraudulent and how the different defendants participated in the allegedly fraudulent acts. Additionally, the court found that the plaintiffs’ claim that in working together Zillow and brokerages formed an unlawful enterprise was actually just an ordinary business relationship. 

As for the RESPA claims, the court found that since the plaintiffs were not the ones to pay the fees in question, they lack standing. Judge Robart reasoned that while the homebuyers paid for the home, under the cooperative compensation model that was common practice when the buyers purchased their properties in 2022, the fees in question came out of the seller broker’s total compensation that was then split with the buyer’s broker. 

In addition, for both the RESPA and the RICO claims, the judge found that the plaintiffs failed to show how they were injured, including how Zillow Flex led to increased home prices or how using a Zillow Home Loan product actually caused financial harm. 

In a post on its Front Porch blog, Zillow lauded the judge for dismissing the “plaintiffs’ baseless complaint.” 

“The court rejected plaintiffs’ entire suit, even after five rounds of complaints, finding that every claim they asserted against Zillow and its partners in their 100+ page complaint was deficient,” the post states. 

The court is allowing the plaintiffs to file an amended complaint by August 17. 

Other defendants in the Taylor suit, The Real Brokerage and the Real-brokered The Frano Team, were both voluntarily dismissed from the lawsuit earlier this year. Additionally, GK Properties was dismissed as the claims made against it were time-barred. The claims against eXp are still pending.