The Ninth Circuit Court of Appeals has delivered a significant procedural blow to a group of real estate professionals seeking to hold Move, Inc., the parent company of Realtor.com, accountable in open court for the alleged sale of fraudulent leads. In a recent order, the appellate court denied a petition for an en banc rehearing, effectively upholding a prior decision that requires the plaintiffs to pursue their claims through private arbitration rather than the public judicial system.
The decision marks the latest chapter in a protracted legal battle that pits the interests of individual real estate agents against some of the most powerful entities in the property technology and trade sectors. By declining to rehear the case with a full panel of judges, the Ninth Circuit has reinforced the challenges plaintiffs face when attempting to bypass arbitration clauses in service agreements—a common hurdle in modern commercial litigation.
The Appellate Roadblock and the Jurisdictional Hurdle
The move to deny the en banc rehearing follows a pivotal ruling issued by the Ninth Circuit in mid-August. At that time, a three-judge panel dismissed the initial appeal filed by the plaintiffs, but not necessarily on the merits of the fraud allegations. Instead, the court focused on a technical but critical jurisdictional issue regarding what constitutes a "final" judgment.
The plaintiffs had appealed a lower court’s decision to send the case to arbitration and dismiss the lawsuit. However, the Ninth Circuit concluded that the district court’s order was not a final, appealable judgment. This distinction is vital in federal law; generally, appellate courts only have jurisdiction over final decisions that end litigation on the merits and leave nothing for the court to do but execute the judgment.
In this instance, the appellate court found that the nature of the lower court’s dismissal did not meet that threshold. Because the case was directed to arbitration with the possibility of returning to the court for enforcement or review of the arbitrator’s decision, the appellate panel viewed the status of the case as being in a legal limbo that precluded immediate appellate intervention.
The petition for an en banc rehearing was the plaintiffs’ attempt to have the full court reconsider this jurisdictional dismissal. An en banc review is a rare occurrence, typically reserved for cases of exceptional importance or to resolve conflicts between different panels of the same court. By declining the petition, the Ninth Circuit has signaled that the panel’s original interpretation of the law will stand, leaving the plaintiffs with no immediate path forward in the federal appellate system.
Origins of the Dispute: Allegations of "Fake" Leads
The legal conflict began in earnest in August 2024, when lead plaintiff James Bandy filed the suit on behalf of himself and a proposed class of real estate agents. The core of the complaint targets the lead generation business model employed by Realtor.com and its associated entities.
According to the lawsuit, the plaintiffs paid for lead generation services under the impression that they would receive high-quality, vetted inquiries from potential homebuyers and sellers. Instead, Bandy and other agents allege that a significant portion of the leads provided by Realtor.com were "fake," nonexistent, or otherwise failed to meet the basic expectations of the service agreement.
The allegations suggest a systemic failure in the lead verification process. Plaintiffs claim that the contact information provided was often disconnected, associated with individuals who had no interest in real estate transactions, or in some cases, appeared to be entirely fabricated. For real estate professionals who rely on these leads to build their pipelines and justify their marketing budgets, the delivery of "junk" leads represents not just a loss of the initial fee, but a significant waste of time and resources spent attempting to convert non-viable prospects.
The suit seeks to hold Move, Inc. and its subsidiaries accountable for what the plaintiffs describe as a deceptive business practice that prioritizes volume and subscription revenue over the actual quality of the data being sold to practitioners.
