homeaway.com, Inc. v. City of Santa Monica
918 F.3d 676
| 9th Cir. | 2019Background
- Santa Monica enacted Ordinance 2535 (2017) to curb short-term rentals: it permits licensed home-sharing but generally bans rentals under 30 days and imposes four platform obligations (tax collection/remittance; periodic disclosure of listing/booking info; refusal to complete bookings for unregistered properties; no fee for ancillary services).
- Airbnb and HomeAway (the Platforms) do not own listed properties; hosts supply listing content; Platforms process bookings and collect fees.
- Platforms sued claiming Ordinance is preempted by the Communications Decency Act (CDA), 47 U.S.C. § 230, and violates the First Amendment; district court dismissed for failure to state a federal claim and denied preliminary injunction; this appeal follows.
- Santa Monica defends the Ordinance as a housing/regulatory measure addressing loss of housing stock and neighborhood impacts, not as a content-regulation law.
- The Ordinance contains a safe-harbor for compliant platforms; violations carry civil/criminal penalties. Court reviews dismissal de novo.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Ordinance is preempted by CDA § 230 (express preemption) | Ordinance effectively requires Platforms to monitor/compare third-party listings to the City registry before permitting bookings, turning them into publishers/speakers and nullifying CDA immunity | Ordinance regulates transactions (booking unlicensed properties) and does not require Platforms to edit or publish host content | Not preempted: Ordinance regulates transactional conduct and internal booking checks, not publication; CDA immunity doesn’t cover these obligations |
| Whether Ordinance is preempted by CDA as an obstacle to Congress’s objectives (obstacle preemption) | Broad reading of CDA would preclude local regulation that forces platforms to police content and burden internet marketplace | CDA’s goal to protect self-monitoring does not immunize internet businesses from neutral local regulations addressing housing, taxes, zoning | Not preempted: Ordinance doesn’t frustrate CDA’s goals; platforms can be regulated like brick-and-mortar counterparts |
| Whether Ordinance implicates First Amendment protected speech | Platforms: Ordinance imposes a content-based financial burden on commercial speech (advertisements/listings) and chills speech; scienter required for criminal liability | Santa Monica: Ordinance regulates nonexpressive economic conduct (booking transactions), not listings or expressive activity; incidental speech effects do not trigger heightened scrutiny | No First Amendment violation: law targets nonexpressive conduct (processing unlawful bookings); incidental burdens on commercial speech are permissible; no special scienter rule applies |
| Other federal claims / preliminary injunction | Platforms sought preliminary injunction and raised other federal claims (Fourth Amendment, SCA) | City argued dismissal appropriate and court should decline injunctive relief | District court dismissal and denial of preliminary relief affirmed; remaining federal claims not pursued on appeal and state-law claims dismissed without prejudice |
Key Cases Cited
- Barnes v. Yahoo!, Inc., 570 F.3d 1096 (9th Cir. 2009) (defines publication as reviewing, editing, and deciding whether to publish third-party content)
- Fair Hous. Council v. Roommates.com, LLC, 521 F.3d 1157 (9th Cir. 2008) (limits CDA scope where website materially contributes to unlawful content)
- Doe v. Internet Brands, Inc., 824 F.3d 846 (9th Cir. 2016) (CDA does not bar state-law duties that do not treat defendant as publisher or speaker)
- Sorrell v. IMS Health Inc., 564 U.S. 552 (2011) (distinguishes regulations targeting speech from those regulating economic conduct)
- United States v. O’Brien, 391 U.S. 367 (1968) (test for when conduct intertwines with expressive elements)
- Arcara v. Cloud Books, Inc., 478 U.S. 697 (1986) (statute regulating conduct that incidentally affects speech may be upheld)
- Crosby v. Nat'l Foreign Trade Council, 530 U.S. 363 (2000) (obstacle preemption framework)
- Pittsburgh Press Co. v. Pittsburgh Comm’n on Human Relations, 413 U.S. 376 (1973) (no First Amendment protection for advertising of illegal activity)