Airbnb, Inc. v. City of Santa Monica
2:16-cv-06645
C.D. Cal.Mar 9, 2018Background
- Airbnb and HomeAway operate online hosting platforms that list short-term rentals and facilitate booking transactions and payments for hosts and guests.
- Santa Monica enacted an ordinance (Ordinance No. 2535, amending an earlier ordinance) restricting unlicensed short-term rentals and prohibiting hosting platforms from completing booking transactions for units not listed on the City registry; violations carry fines and possible misdemeanor exposure.
- Plaintiffs sued, seeking a preliminary injunction arguing the Ordinance (1) violates the California Coastal Act by effectively amending or amounting to "development" without Coastal Commission approval, (2) is preempted by the Communications Decency Act (CDA), and (3) infringes the First Amendment.
- The City contends the Ordinance regulates commercial booking conduct (not speech), falls within municipal police powers, and does not require Coastal Commission approval because it is not an LUP amendment nor "development."
- The court denied the preliminary injunction, finding Plaintiffs failed to show likelihood of success on the Coastal Act, CDA, or First Amendment claims.
Issues and Key Parties' Positions
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Ordinance effectively amends the City's Local Coastal Program (LUP) and thus required Coastal Commission approval | Ordinance bans vacation rentals and therefore amends LUP; City failed to seek Commission certification | LUP does not expressly permit vacation rentals; evidence is insufficient that Ordinance altered LUP; factual dispute | Court: Plaintiffs did not show likely success on this point; unresolved factual issue—not decided at PI stage |
| Whether the Ordinance constitutes "development" under the Coastal Act requiring a Coastal Development Permit | Ordinance changes density/intensity of land use and thus is "development" needing Commission approval | Ordinance is a city-wide land-use regulation, not "development," and plaintiffs cite no authority expanding "development" that broadly | Court: Plaintiffs failed to show Ordinance likely qualifies as "development" under the Coastal Act |
| Whether the Ordinance is preempted by the CDA (47 U.S.C. § 230) | CDA bars imposing liability or duties on platforms based on third-party content; the Ordinance effectively penalizes platforms for listings | Ordinance regulates platforms’ non-publisher conduct (completing paid booking transactions), not speech; CDA does not shield non-publishing conduct | Court: CDA does not likely preempt the Ordinance; platforms are regulated for facilitating transactions rather than as publishers |
| Whether the Ordinance violates the First Amendment | Ordinance indirectly targets and burdens advertising/speech by preventing platforms from completing bookings tied to listings | Ordinance regulates commercial conduct (booking transactions), not expressive content; incidental burdens on speech are permitted | Court: Ordinance targets conduct without significant expressive element; Plaintiffs unlikely to prevail on First Amendment claim |
Key Cases Cited
- Winter v. Natural Res. Def. Council, 555 U.S. 7 (preliminary injunction standard)
- Sorrell v. IMS Health Inc., 564 U.S. 552 (incidental burdens on speech and commercial regulation)
- Perfect 10, Inc. v. Google, Inc., 653 F.3d 976 (scope of § 230 immunity discussed)
- Doe v. Internet Brands, Inc., 824 F.3d 846 (§ 230 does not bar claims based on non-publisher conduct)
- City of Chicago v. StubHub!, Inc., 624 F.3d 363 (regulation/tax not preempted by CDA where it targets non-publishing activity)
- Int’l Franchise Ass’n, Inc. v. City of Seattle, 803 F.3d 389 (test for when economic regulation implicates expressive activity)
- Airbnb, Inc. v. City and County of San Francisco, 217 F. Supp. 3d 1066 (N.D. Cal.) (similar ordinance held not preempted by § 230 and regulating conduct of booking transactions)