Zillow Wins Dismissal of RESPA Claims in Flex Referrals Case

Zillow has successfully had claims of Real Estate Settlement Procedures Act (RESPA) and racketeering violations dismissed by a federal court. U.S. District Judge James Robart of Seattle granted Zillow's motion to dismiss the combined Taylor and Armstrong lawsuit on Monday, stating that the complaint did not contain adequate factual allegations to support the plaintiffs' claims. The ruling indicated that the plaintiffs' assertions of a lack of notice were implausible, given Zillow's explicit and repeated disclosures. Judge Robart also found that the plaintiffs failed to present specific facts demonstrating how Zillow's practices actively harmed the home-buying process, limited informed lender choices, or diminished trust in real estate professionals.

The original lawsuit, filed in mid-September 2025, alleged that Zillow misled consumers into using agents affiliated with its Flex and Premier Agent programs, which purportedly led to inflated home purchase prices. An amended complaint, filed in mid-November 2025 by plaintiff Taylor, further alleged that Zillow violated the Racketeer Influenced and Corrupt Organizations (RICO) Act by directing homebuyers toward more expensive loans that were not in their best interests. In December 2025, this lawsuit was consolidated with a second suit, the Armstrong suit, which was initially filed in early November. The Armstrong suit claimed that Zillow pressured agents participating in its Premier Agent and Flex lead programs to steer buyers toward Zillow Home Loans for their mortgage pre-approvals. The lawsuit suggested that agents who referred more clients to Zillow's mortgage division for pre-approvals received preferential treatment in the form of extra or higher-quality leads.

In a subsequent first amended complaint filed in early January 2026 for the consolidated lawsuit, the plaintiffs reiterated their claims that Zillow deceives consumers into engaging with Zillow-affiliated agents through its Flex and Premier Agent programs, resulting in higher home purchase prices. The complaint also included allegations related to the Real Estate Settlement Procedures Act (RESPA). RESPA is a federal law that protects consumers from abusive lending practices and excessive settlement costs in real estate transactions. It aims to ensure that consumers receive disclosures about the costs of closing a real estate transaction and to prevent kickbacks and unearned fees. The plaintiffs' core argument was that Zillow's referral practices within its Flex and Premier Agent programs violated RESPA by creating conflicts of interest and steering consumers towards affiliated services without adequate disclosure or justification, thereby increasing costs and limiting choice. The court's decision to dismiss these claims indicates that the plaintiffs did not sufficiently demonstrate these alleged violations based on the evidence presented in their pleadings.