Posted by: Patricia Salkin | March 27, 2019

Ninth Circuit Affirms Denial of Preliminary Injunction in Santa Monica Short-Term Rental Case

This post originally appeared on the Rocky Mountain Sign Law Blog and is reposted with permission.
The Ninth Circuit Court of Appeals affirmed a district court’s denial of a preliminary injunction in a case initiated by HomeAway and Airbnb challenging the City of Santa Monica, California’s short-term rental regulations. The plaintiffs in the case alleged violations of the First Amendment right to freedom of association.
Located on the Pacific coast and known as a tourist destination, by early 2018, Santa Monica had nearly 2,000 Airbnb or HomeAway listings—in a city of just 90,000 residents. In response to the various problems created by short-term rentals, the city council passed an ordinance limiting short-term rentals to only “home-shares,” where the resident of the unit is present during the rental period. Santa Monica also collects taxes on short-term rentals, requires licenses, and imposes disclosure obligations on hosts. HomeAway and Airbnb filed a variety of challenges to the ordinance, and moved for a preliminary injunction, which was denied by the district court.
With respect to the First Amendment, HomeAway and Airbnb argued that the city’s regulations imposed a content-based burden on commercial speech. In reviewing the booking services’ claims, the Ninth Circuit found that the First Amendment was not implicated by the regulation. Specifically, it found that the regulation applied to purely non-expressive conduct. The court found that the regulation only had an incidental impact on protected speech, and therefore could not be subjected to First Amendment scrutiny. The court found that, even if the regulation caused HomeAway or Airbnb to withdraw postings of rental properties, rental property owners had a variety of alternative channels to communicate information about short-term rentals.
The First Amendment claim against Santa Monica is similar to claims filed by short-term rental platforms against other cities’ restrictions on short-term rentals. The Ninth Circuit’s thorough opinion is likely to be used by other municipalities in their defense of similar ordinances.
HomeAway, Inc. v. City of Santa Monica, 918 F.3d 676 (9th Cir. 2019)

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