Section 230 Protects Zillow for Bogus Submissions of House Details–924 Bel Air v. Zillow

February 22, 2020 · by · in Derivative Liability

This lawsuit relates to 924 Bel Air Road in Los Angeles, a house known as “Billionaire” (seriously, who chose that brand???). It is one of the most expensive houses in the world. The house is located on an acre+ lot in the Bel Air hills above UCLA. In 2012, a developer bought the property and built a monstrosity targeting the 1% of the 1% of the 1%. The nominal stats are pretty gauche: 38,000 square feet, 12 bedrooms, 21 bathrooms. However, it’s the little details that really make me shake my head: a 360 inch TV, a non-functional helipad with a sculptural homage to Airwolf, two elevators lined with alligator skin (WTF?), a wall of candy dispensers, and champagne-filled fire extinguishers (I’m not a chemist, but I thought pouring alcohol onto flames isn’t advised). Take a look at the property listing website, which includes a photo album.

How do you put a price on a one-of-a-kind house like this? It’s not exactly a liquid market for properties affordable to a handful of people in the world. The developer initially listed the property for $250M in 2017. In 2018, it was relisted at $188M. In 2019, it was re-relisted for $150M. In October 2019, the property finally sold for $94M. On the one hand, I assume $94M is well beyond your financial means. On the other hand, it was only 38% of the initial list price. BARGAIN!

(Note: the property taxes on this home are over $1M/year. Then again, if you don’t have that kind of cash flow, you probably aren’t a Billionaire).

It’s fun to mock this situation, but the lawsuit raises some serious legal issues. Zillow maintains a residence page for Billionaire, like it does for virtually all other residential properties. An anonymous user (“User X” as called by the court) improperly was automatically validated as the property owner. Three times over a week-long period, User X falsely listed that the property had sold at prices well below the then-current listing price. The plaintiff “alleges that Zillow’s internal monitoring system allowed User X to publish false information that removed the property from the ‘elite status of a $100M plus property’ and shifted the market perception to a heavily discounted sale price.” Zillow defended on Section 230 grounds.

To work around the obvious Section 230 immunity, the plaintiff argued that its “negligence claim does not treat Zillow as a publisher because the claim is based, not on the published content, but on Zillow’s allegedly ‘inadequate monitoring system’ that allowed User X to post that false content to the Residence Page.” The court easily and efficiently swats this argument down, citing Doe v. MySpace, Barnes v. Yahoo, and Carafano v. Metrosplash:

No matter how artfully Bel Air seeks to plead, its allegations make clear that Bel Air’s claims are merely another way of holding Zillow liable for publishing User X’s content, and are thus directed toward Zillow as a publisher, editor, or screener.

Ultimately, Bel Air’s allegations boil down to a charge that Zillow must prevent users from falsely claiming a Residence Page or posting false content. Yet, reviewing each user’s activity and postings to ensure their accuracy is precisely the kind of activity for which Congress intended section 230 to provide immunity.

To emphasize just how obvious this outcome was, the judge says: “The Court does not find this to be a close case. Bel Air’s negligence claim against Zillow falls squarely within the bounds of CDA immunity….Bel Air’s protestations of ‘novelty’ and attempts to circumvent CDA immunity by using new labels for what is inherently publisher’s conduct do not change this claim’s fundamental character.”

Notice the parallels between this case and Herrick v. Grindr, where Grindr allegedly failed to prevent repeated e-personations of the victim. Herrick suffered more horrific damage from the malicious attack, but in both cases, Zillow and Grindr allegedly should have both done more to prevent the publication of malicious content from third parties. Doe v. MySpace pretty squarely rejected that argument a dozen years ago, and unsurprisingly it remains legally untenable today.

Case citation: 924 Bel Air Road, LLC v. Zillow Group, Inc., 2020 WL 774354 (C.D. Cal. Feb. 18, 2020)

Prior blog posts about Zillow: