Challenge to Santa Monica’s “Anti-Airbnb” Law Dismissed–Homeaway v. Santa Monica

June 26, 2018 · by · in Content Regulation, Derivative Liability, E-Commerce

Numerous cities have passed “anti-Airbnb” laws, including Santa Monica. Santa Monica’s regulation, like San Francisco’s, regulated the provision of “booking services” to unlicensed vendors. Airbnb and HomeAway challenged Santa Monica’s regulation. In March, citing the Airbnb v. SF ruling, the district court denied Airbnb/HomeAway’s motion for a preliminary injunction against the law. That opinion rejected Airbnb/HomeAway’s core Section 230 and First Amendment arguments. Earlier this month, the court dismissed the challenge entirely.

The recent ruling doesn’t break a lot of new ground. A lot of the opinion just reiterates the March opinion. The few interesting “new” tidbits:

Section 230. Echoing its March opinion, the court says “Plaintiffs are not being punished for their editorial decisions, such as which listings are published or how properties are advertised. The Ordinance only prohibits the illegal transactions….the Ordinance does not require Plaintiffs to remove any particular listing or content….The Ordinance prevents Plaintiffs from facilitating booking transactions for illegal rentals. It does not require Plaintiffs to edit or exclude any content on their websites.” As I’ve discussed before, the court’s conclusion is disingenuous because it makes no sense to run ads for illegal properties that Airbnb would have to reject if anyone tried to book. Indeed, it might very well be false advertising if Airbnb promoted listings that it never could actually sell; that’s basically a bait-and-switch. So it’s crazy for the court to say that regulating the transaction doesn’t affect Airbnb’s editorial treatment of the listings.

First Amendment.  “the Court need not decide whether the Ordinance survives intermediate scrutiny, because the Court concludes that the Ordinance does not regulate speech. The Ordinance imposes no liability on Plaintiffs for the content of materials on their websites….There can be no dispute that it is illegal in Santa Monica to rent a unit that does not comply with the Ordinance. Therefore, Plaintiffs cannot use the First Amendment as a shield to allow them to communicate offers to rent illegal units.”

Given the tenor of the court’s rejection of the PI request, the dismissal isn’t surprising. Still, I think it’s a reminder of the problems created by the Airbnb v. SF ruling, which continues to cast an unfortunate shadow over all online marketplaces.

Meanwhile, Airbnb and HomeAway already appealed the PI denial to the Ninth Circuit. Filings in the appeal:

* Santa Monica answering brief. Amicus briefs in support of Santa Monica from professors, Aimco, cities and counties, cities, and Unite Here International Union

* Opening Brief from Airbnb/HomeAway. Amicus briefs in support of Airbnb/HomeAway from NetChoice, Copia, and Internet companies.

Needless to say, the Ninth Circuit’s opinion in this case could be a very important contribution to the Section 230 jurisprudence. Then again, I felt the Airbnb v. SF appeal was going to reach that resolution until the parties settled, leaving the problematic district court opinion in place.

Case citation: HomeAway.com, Inc. v. City of Santa Monica, 2018 WL 3013245 (C.D. Cal. June 14, 2018)