Commercial-Speech Exemption: The TCPA’s Crucial Limitation Highlighted in Zillow Case
The Texas Citizens Participation Act (TCPA) serves as an important shield for free speech, allowing for early dismissal of lawsuits that target protected expression. However, a recent Texas Court of Appeals decision demonstrates a significant boundary to this protection: the commercial-speech exemption. The May 2025 ruling in Zillow, Inc. and Zillow Group, Inc. v. BMB Development, LLC, Michael Benson, and Bradina Benson offers valuable insights into how courts interpret this exemption, particularly in the context of online real estate platforms.
Case Summary
The dispute arose after Michael and Bradina Benson, through their company BMB Development, listed their luxury Wise County property for sale in May 2023. The property—a 25-acre estate featuring a 9,600-square-foot Spanish mansion, swimming pool, guest villa, helicopter landing pad, and numerous other amenities—was listed at $14.25 million after the Bensons had invested over $300,000 in renovations.
According to the Bensons, Zillow’s website erroneously displayed their property as foreclosed or in pre-foreclosure, incorrectly located it in Alvord (rather than Decatur), and improperly categorized it as “apartments or townhomes” for rent. Despite the Bensons’ attempts to have this information corrected, they alleged that Zillow failed to resolve these issues satisfactorily.
The Bensons claimed these misrepresentations damaged their ability to sell the property during the critical initial marketing period, ultimately leading them to switch listing agents and reduce the asking price substantially. They filed suit against Zillow for tortious interference with their listing agreement, tortious interference with prospective business relations, and defamation.
Zillow responded with a motion to dismiss under the TCPA, arguing the Bensons’ claims targeted Zillow’s protected speech. The trial court denied this motion, and Zillow appealed.
Key Legal Holdings
The Second Appellate District Court of Fort Worth affirmed the trial court’s decision, finding that the TCPA’s commercial-speech exemption applied, which removed Zillow’s statements and conduct from the TCPA’s protection.
The court applied the four-prong test from Castleman v. Internet Money Ltd. (2018) to determine if the commercial-speech exemption applied:
- Business Engagement: Whether the defendant was primarily engaged in selling or leasing goods or services
- Capacity: Whether the defendant made the statement in its capacity as a seller of those goods or services
- Commercial Context: Whether the statement arose from a commercial transaction involving the defendant’s goods or services
- Intended Audience: Whether the statement’s intended audience consisted of actual or potential customers
The court concluded that Zillow satisfied all four prongs as:
- Zillow functions primarily as a real-estate marketplace company providing services related to buying, selling, and financing real estate
- The allegedly defamatory statements were made in Zillow’s capacity as a seller of real-estate marketplace services
- Zillow’s statements about the property were made in the context of commercial transactions involving its own services, including connecting users with agents and offering financing
- The intended audience of these statements was Zillow’s website users, who were potential customers for Zillow’s services
Legal Context
This ruling clarifies an important limitation to the TCPA’s protections. While the TCPA was designed to facilitate early dismissal of meritless claims targeting free speech (sometimes called “Strategic Lawsuits Against Public Participation” or SLAPPs), the commercial-speech exemption establishes that communications primarily serving commercial interests don’t receive the same level of protection.
The court’s detailed analysis of Zillow’s business model proved crucial to the outcome. Rather than viewing Zillow merely as a passive information aggregator, the court focused on Zillow’s self-description as a “real-estate-marketplace company” offering various services, including financing options for property purchases. This characterization aligned Zillow’s statements about the Bensons’ property with Zillow’s commercial interests, triggering the exemption.
It’s important to note that this ruling doesn’t establish Zillow’s ultimate liability for the allegedly false information. As the court emphasized, “At this stage, the merits of the Bensons’ claims are not before us, and Zillow cannot use the TCPA as an essentially out-of-the-gates no-evidence summary-judgment motion on liability and damages.”
Platform Liability Considerations
This case raises interesting questions about online platform liability, but it’s crucial to understand that the court did not determine whether Zillow was actually responsible for creating or developing the allegedly false information. Under Section 230 of the Communications Decency Act (47 USC 230), online platforms generally enjoy immunity from liability for third-party content.
For a platform like Zillow to face liability, a court would need to find that Zillow was responsible for creating or developing the specific content at issue. The TCPA ruling merely determined that Zillow could not dismiss the case at an early stage under the anti-SLAPP provisions; it did not address whether Zillow would ultimately be protected by Section 230.
Business Model Implications
The court’s analysis highlights how a company’s business model can significantly impact its legal exposure under the TCPA. The court emphasized that Zillow wasn’t merely displaying third-party real estate listings but was offering its own services in connection with those listings.
Several factors influenced the court’s determination:
- Service Integration: Zillow’s platform integrated property listings with services like agent referrals and financing options
- Revenue Model: Zillow stood to profit from transactions related to the property listings on its site
- Search Engine Optimization: Zillow actively worked to ensure its listings appeared prominently in search results
- Commercial Intent: Zillow’s communications about properties were designed to facilitate commercial transactions from which Zillow would benefit
Companies with different business models might face different outcomes under similar circumstances. A platform that merely aggregates information without offering related services might have a stronger argument against the commercial-speech exemption. Conversely, platforms that more deeply integrate commercial services with their information-sharing functions may face greater challenges in invoking TCPA protections.
Conclusion
The Zillow v. BMB Development case demonstrates the nuanced application of the Texas Citizens Participation Act and its commercial-speech exemption. While the TCPA provides important protections for free speech, those protections have limits when speech is primarily commercial in nature.
This ruling reminds us that courts will look beyond surface characterizations to examine a business’s fundamental nature and commercial interests when applying the TCPA. For businesses operating online platforms, the case highlights the importance of understanding how their business model might affect their legal protections and potential exposure.
The case now returns to the trial court for further proceedings where Zillow will have the opportunity to present other defenses, potentially including Section 230 immunity. Whatever the ultimate outcome, this appellate decision provides valuable clarification on the scope and limitations of the TCPA’s application to online platforms.