Trade Practices Act Violation

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7^th Circuit Court of Appeals

Case Name: Vipul B. Patel, et al. v. Zillow, Inc., et al.

Case No.: 18-2130

Officials: BAUER, EASTERBROOK, and SCUDDER, Circuit Judges.

Focus: Trade Practices Act Violation

A Zestimate is an estimated value for real estate, available on the Zillow web site for about 100 million parcels. Zillow generates Zestimates by applying a proprietary algorithm to public data, such as a building’s location, tax assessment, number of rooms, and the recent selling prices for nearby parcels. But because Zillow does not inspect the building, it cannot adjust for the fact that any given parcel may be more attractive and better maintained, raising its likely selling price, or the reverse. Zillow states that its median error (comparing a Zestimate with a later transaction price) is less than 6%, though the Zestimate is off by more than 20% in about 15% of all sales. Zillow informs users that none of the parcels has been inspected and that Zestimates may be inaccurate, though Zillow touts them as useful starting points.

In addition to the trade practices act, plaintiffs invoke the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILCS 505/1 to 505/12. The district court’s second opinion shows that this claim fails for essentially the same reasons as the trade practices act claim fails, and for the further reason that plaintiffs are not buyers of real estate. 2018 U.S. Dist. LEXIS 76245 at *20–26. The subject does not require additional discussion.

Affirmed

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Derek A Hawkins is trademark corporate counsel for Harley-Davidson. Hawkins oversees the prosecution and maintenance of the Harley-Davidson’s international trademark portfolio in emerging markets.