Airbnb (along with another company in the same space, Homeaway in a separate suit) sued the city of Santa Monica last week in U.S. District Court in Los Angeles.
The company argued that regulations aimed at its service of matching buyers and sellers of short term rentals via website and app violated its 1st, 4th, and 14th Amendment rights. (I reported on the first conviction under those laws against an AirBnb host in Santa Monica in August.)
This is the third such suit filed by Airbnb against California cities since June; they've also sued San Francisco and Anaheim. Anaheim faces a similar suit in state court from aggreived short-term rental housing owners.
Alison Schumer, a spokeswoman for Airbnb, told the Los Angeles Times that "Santa Monica's clumsily written law punishes hosts who depend on home sharing to make ends meet and travelers looking for low-cost accommodations near the beach. The city is unwilling to make necessary improvements to its draconian law, so while this isn't a step we wanted to take, it's the best way to protect our community of hosts and guests."
The challenged laws completely bar rentals of whole apartments for fewer than 30 days, strongly hobbling the business model. It also imposes rules forcing Airbnb hosts to post business licenses to operate on their online listings and pay a 14 percent hotel tax to the city, and holds the website liable for hosts violations.
Part of the suit argues that "The ordinance seeks to hold Airbnb liable for content created by third-party users, by punishing Airbnb for listings posted to its platform where those listings do not comply with city law. As such, the ordinance unquestionably treats online platforms such as Airbnb as the publisher or speaker of third-party content and is completely preempted by the [Communications Decency Act] CDA."
The suit also insists that the Stored Communication Act and the 4th Amendment are violated by Santa Monica, since the law forces "disclosure to the City of certain customer information without any legal process or pre-compliance review."
Courthouse News Service reports that:
Airbnb already has paid $20,000 in fines [to Santa Monica], KPCC radio reported in late July…In its 22-page lawsuit, Airbnb says it "has paid all of the citations it has received under protest," and says the city should enforce its laws against the hosts who violate them, not Airbnb.
The San Francisco-based company says the regulations force it to pay criminal fines without any evidence of intentional wrongdoing.
"The city has impermissibly created a strict-liability crime for publishing third-party advertisements for rentals that prove to be unlawful for one reason or another, even if the hosting platform has no knowledge of the violation," the complaint states.
It claims the city law and enforcement of it violate constitutional guarantees of due process, and that the city's demand for information about its customers constitutes unconstitutional search and seizure.
Both companies seek declaratory judgment that the ordinance is unconstitutional, and an injunction against its enforcement.
must not only collect and remit taxes to the city, they must regularly provide the city with a list of all their properties in Santa Monica, along with the name of the homeowner, the length of each stay, and the price paid for each rental.
Violation of the ordinance could result in penalties of up to $500 and six months in prison.
Since the city enacted the ordinance, Airbnb says it has received multiple notices from the city demanding the removal of "hundreds" of allegedly unlawful vacation rentals.
The Times reports that the Anaheim suit is going to be abandoned by Airbnb since "Anaheim officials reviewed the law and agreed not to enforce the provision that would punish hosting sites" for illegal behavior by hosts pending a complete ban on short-term rentals that will go into effect in April 2018.