Zillow is not buying Compass’s claims that its listing standards policy has or ever will cause “irreparable harm” to the nation’s top brokerage by sales volume.

On Monday, the listing portal giant filed two letters in response to Compass’s motion for a preliminary injunction and its motion for expedited discovery. 

The responses come just a week after the Robert Reffkin-helmed brokerage filed its suit against Zillow, claiming that the portal has colluded with Redfin and eXp Realty on its listing standards policy. Compass claims Zillow enacted the policy to maintain an alleged monopoly over home searches. 

In a letter to Judge Jeannette A. Vargas, Beau Buffier of Wilson Sonsini Goodrich & Rosati — Zillow’s lead counsel — expressed his client’s opposition to Compass’s request for expedited discovery. He asked the court to either deny the request or wait until Zillow has filed its opposition to Compass’s motion for a preliminary injunction, enjoining it from enacting its listing standards policy. 

Matter of urgency?

Zillow claims that because Compass waited nearly three months to file the suit and is proposing a three-month schedule for resolving the dispute, no emergency exists.

Additionally, Zillow argues that by waiting this long, Compass cannot claim that it faces “irreparable harm.” Zillow’s policy went into full effect on Monday and will remain in effect unless the court grants Compass’s preliminary injunction.

“Compass’s claimed irreparable injury and need for urgent relief ring hollow when Compass waited nearly three months to bring suit and is willing to wait three more months before any hearing on its motion,” the letter states. 

According to Zillow, the injuries that Compass allege “are either compensable through damages (if Compass prevails) or are too speculative to support a preliminary injunction.” The letter also argues that Compass fails to articulate why discovery is needed to avoid “irreparable harm” or decide its motion for preliminary injunction. 

“Nowhere does the Discovery Motion articulate why any evidence is necessary to decide the PI Motion or avoid irreparable harm,” the letter states. “This is not a situation, for example, where evidence may be lost.”

In addition to these claims, Zillow also argues that “Compass has failed to “plausibly allege antitrust standing, a proper relevant market, or market power, among other deficiencies.”

“At its core, Compass complains that Zillow has a duty to carry Compass for-sale listings that Zillow does not want to carry, a highly disfavored and inactionable theory. Dressing up that claim in the purported mantle of conspiracy does not help, because Compass has not adequately or plausibly alleged any anticompetitive agreement.” the letter states.

Buffier and Zillow also argue that a victory by Compass in this suit will “impair competition rather than promote it.”

“Compass’s lawsuit seeks to reverse the technological transformation — pioneered by Zillow and others — that has allowed home sale listings to be available for free to anyone on the Internet,” the letter states.

“Compass would erect new barriers for buyers by making listings exclusive to each broker — resulting in reduced transparency, less market liquidity, and a more frustrating and less efficient experience for buyers and sellers. Compass seeks to unravel this innovation and transparency for buyers and sellers in favor of Compass’s own gain.”

Legal process timeline

If the court allows discovery to occur, Buffier and Zillow propose to narrow its scope.

Under this narrowed discovery suggestion, the court would limit Compass to just five employees and two document requests. These include communications between Zillow and Redfin or eXp Realty about Zillow’s listing standards, Compass’s three-phase marketing strategy and/or pre-MLS or off-MLS marketing strategies.

In addition to this letter, Compass and Zillow filed a joint letter that addresses seven questions Vargas wanted answered before Tuesday’s conference. That meeting will focus on the discussion over Compass’s motion for a preliminary injunction. 

In the letter, Zillow reiterated its position that discovery is not needed, claiming that discovery in an antitrust case can be very expensive. As such, Zillow feels discovery should be limited unless the court feels it is absolutely necessary, and it asked the court for reciprocal discovery rights if Compass’s motion for expedited discovery is granted. 

Compass envisions between six and eight weeks for discovery to support its motion for a preliminary injunction. It said that if this process is delayed, it would suffer a great deal of harm. The proposed discovery would include document production, depositions and expert testimony.

In contrast, Zillow believes its suggested discovery period could be completed in a few weeks. Additionally, Zillow questioned Compass’s introduction of requests for expert testimony and depositions, which were not included in its initial motion for expedited discovery. 

Compass is also calling for a five-day hearing after discovery concludes to present testimony on its claims of irreparable harm and an alleged antitrust conspiracy. Zillow disagrees with this and instead proposes that the court decide on Compass’s motion for preliminary injunction after Zillow files its opposition brief. 

According to the letter, Zillow will file its opposition to Compass’s preliminary injunction motion by July 18. Compass will file its reply by Aug. 1 if the court denies its motion for discovery.

Additionally, Zillow is planning on filing a motion to dismiss the suit by Aug. 22, or 14 days after the court rules on the preliminary injunction motion. Compass indicated that it intends to file an amended complaint if any or all of its claims are dismissed.

The National Association of Mortgage Brokers (NAMB) on Monday issued a letter of support for the Community Home Lenders of America (CHLA)’s white paper on LO compensation reform.

CHLA‘s white paper, released last week, urged Congress to roll back the loan originator compensation rule to focus on its original purpose — a ban on yield spread premiums (YSP), a predatory practice from the financial crisis of the 2000s in which brokers were paid extra by lenders to place borrowers in loans with higher interest rates.

The proposal follows the Consumer Financial Protection Bureau (CFPB)’s early June submission to the White House Office of Management and Budget (OMB), which includes possible changes to LO compensation and mortgage servicing rules under the Truth in Lending Act.

NAMB‘s letter explained that the trade group views YSP, which is now recognized as lender-paid compensation, as “a legitimate and consumer-beneficial method of structuring mortgage transactions.”

But NAMB also said it opposes the current “rigid” interpretation of loan originator compensation regulations, arguing that the rules hinder consumer choice and restrict flexibility.

“We support a return to the original legislative intent: to eliminate abusive practices, not to overregulate legitimate compensation arrangements within a firm,” the letter read.

“NAMB advocates for a return to common-sense regulatory approaches that distinguish abusive behavior from today’s transparent and consumer-focused lending models,” NAMB President Jim Nabors said.

“Responsible use of lender-paid compensation is an essential tool in offering flexible, borrower-centric financing options. We urge regulators and lawmakers to update and align LO Comp rules with the realities of today’s transparent and competitive mortgage market to protect, rather than hinder, consumers.”

NAMB’s letter recommends legislative support, saying that it “supports legislation to limit LO Comp restrictions to transactions between unrelated entities, preserving lender-paid compensation and exempting a firm’s internal employee or broker compensation structures.”

NAMB also calls for regulatory clarifications from the CFPB.

Zillow attorneys pushed back at Compass’ request for a broad and expedited discovery, and on the brokerage’s private listing network. ‘Compass would erect new barriers for buyers by making listings exclusive to each broker.’

As class-action lawsuits continue against major real estate brokerages for alleged telemarketing violations, firms of all sizes are under increasing pressure to strengthen their compliance practices.

According to attorney Michele Shuster, a founding partner of Mac Murray and Shuster LLP, staying within the bounds of federal and state telemarketing laws isn’t just a legal necessity — it’s vital risk management in today’s regulatory climate.

“Obviously, the most important thing is [to] work with an attorney who understands telemarketing, because it’s such a unique area,” said Shuster, whose firm specializes in regulatory defense, government relations and compliance services.

“We literally start the day, every day, looking at research on the cases and seeing if there are any new developments at the regulatory agencies.”

Shuster’s comments follow recent litigation involving Compass and Keller Williams in which plaintiffs allege that unsolicited calls were placed without proper consent, in violation of federal Do Not Call (DNC) regulations.

“In both of these cases, it was really the do not call laws that they ran into problems with,” Shuster explained. “And if they would have scrubbed against the Do Not Call list, or if they would have had consent, or if they’d made an inquiry to them, they wouldn’t have run into these problems.

“That’s really the three main areas that real estate agents should be focusing on.”

Keller Williams was also named in a separate Telephone Consumer Protection Act (TCPA) suit that was filed in Texas in April 2024. The suit was dismissed earlier this year due to a failure to state a claim. 

Meanwhile, changes to the TCPA — including a one-to-one consent rule — went into effect late this past January.

Under the consent rule, anyone soliciting a consumer’s business through a phone call or text message must obtain their written consent prior to sending robocalls or texts.

The consent provided by the individual must be “a clear and conspicuous disclosure that the consumer will receive robocalls or robotexts and the content of those contacts must be logically and topically related to the website where the consumer gave consent,” according to the Federal Communications Commission (FCC).

Offers to buy vs. offers of services

Shuster emphasized a key legal distinction in this area — calls that involve a bona fide offer to purchase a home versus calls that promote an agent’s services.

“There’s the people or the agents or the real estate companies who are reaching out that truly just want to buy the home, and so they’re making an offer to purchase that home,” she said. “And there’s a case recently where the court ruled on a summary judgment motion that an offer to purchase is not a telemarketing call, and therefore they dismissed the case.”

But Shuster warned that when an agent offers listing services or marketing support to help sell a home, the rules change.

“I really want to distinguish here between … ‘I am going to buy your house. I’m not offering you any services or any of those types of things. I’m just truly reaching out to make you an offer to purchase your house’ (type of call), versus a real estate agent reaching out and saying, ‘Looks like you want to sell your house. And, you know, I can do these things to help you sell your house.’

“And that’s where they’re offering services and they’re really just supplanting a real estate agent. And that is a telemarketing call, because you’re marketing your services as a real estate agent.”

Express written consent due diligence

A cornerstone of telemarketing compliance is to obtain prior express written consent — particularly when using technologies like autodialers or prerecorded messages to contact consumers who may be on the National DNC Registry.

“Prior express written consent — which is the type of consent if you’re using regulated technology, basically — it’s consent to call somebody who may be on the Do Not Call list as well,” Shuster said.

“But prior express written consent has a very specific list of things that have to be included in consent language that you’re giving to the consumer, and the consumer is signing that and giving that back to you, basically, and saying. ‘You have my consent to call me.’

“The requirement for prior express written consent is obviously that it has to be in writing. You have to have in the consent language that the consumer is giving consent to call them using an automatic telephone dialing system or a prerecorded voice, that their consent is not required for purchase, and then they have to actually sign that. And if it’s an online form, you have to comply with eSign.”

This presents a major challenge for firms that collect leads over the phone.

“It’s really difficult to get prior express written consent over the telephone, because you can’t get a written signature with somebody over the telephone,” Shuster said. “This has really been a shock to the telemarketing world.”

When it comes to leads acquired through third-party forms, Shuster said consent is only valid if the lead identifies the specific company that will be contacting the consumer.

“What’s important is they have to identify the seller and the lead form,” she said. “In that language, they need to be giving that to the seller or the person who’s going to be making the telephone call.

“There are lead generation companies out there that get consent for the lead generation company to call them, and what they’re trying to do is find out what kind of other services that consumer might be interested in And so they try to get consent also for the seller. And the seller would be a Keller Williams or Compass, for example.”

Who’s most at risk?

While large brokerages face complex liability due to their broad networks, smaller operators are far from immune, Shuster said.

“With the large real estate companies, they have a lot of agents, a lot of independent agencies, and they have a lot of brokerages,” she said. “So in a large organization like that, it’s really important to have compliance processes and procedures that percolate down the whole the whole structure. You need to get them to other agencies and the agents and the brokers, and you have to train them on those types of things.

“If you don’t have the policies and procedures — and if you’re not giving those to the right people and you’re not training them — you have compliance risks there.”

For independent agents, “sometimes, I think it is just maybe a lack of awareness that they are a telemarketer when they’re making calls to sell their services,” Shuster said.

Consent logs and retention

Whether using websites or forms to gather leads, Shuster recommends keeping detailed and long-term records.

“If they’re using their website to collect leads, and they’ve got that consent language on their website, then they can keep electronic records for that,” she said. “It can be a database that’s collecting that info as it’s filled out. There are screen capture systems out there that will actually record that the person is there, going through the form and filling it out.

“You do have to disclose that you’re recording the movements, though, on the computer, because it’s monitoring or recording, and there are laws about that. You have to make sure you’re giving the right disclosures, but then keeping that database or keeping those screen captures, and you need to keep them for at least five years, because that’s the statute of limitations.”

Shuster offered a few candid final words for industry stakeholders.

“Make sure they reach out to a compliance attorney that understands telemarketing,” she said.