Airbnb Goes To Court To Stop San Francisco's New Anti-Airbnb Law

Back in May, we noted that large cities around the country were rushing to put in place anti-Airbnb laws designed to protect large hotel companies. In that post, we noted that many of the bills almost certainly violated Section 230 of the CDA by making the platform provider, Airbnb, liable for users failing to "register" with the city. Section 230, again, says that a platform cannot be held liable for the actions (or inactions) of its users. San Francisco was the first city to get this kind of legislation pushed through. And while the city's legislators insisted that Section 230 didn't apply, they're now going to have to test that theory in court. Airbnb has asked a court for a preliminary injunction blocking the law, based mainly on Section 230, but also mentioning the Stored Communications Act and tossing in a First Amendment argument just in case.

As designed and drafted by the Board of Supervisors, the Ordinance directly conflicts with,and is preempted by, Section 230 of the Communications Decency Act, 47 U.S.C. 230 (the"CDA"). According to its own sponsors, the law holds "hosting platforms accountable for thehundreds of units (rented by) unscrupulous individuals" posting listings on their websites, and holds"Airbnb Accountable for Listing Illegal Short Term Rentals." Declaration of Jonathan H. Blavin("Blavin Decl.")... As such, the Ordinance unquestionablytreats online platforms like Airbnb as the publisher or speaker of third-party content and iscompletely preempted by the CDA. In addition, the law violates the Stored Communications Act,18 U.S.C. 2701 et seq. (the "SCA"), by requiring disclosure to the City of customer informationwithout any legal process, and the First Amendment as an impermissible content-based regulation.

As Airbnb points out, the city even recognized that the bill probably runs afoul of Section 230, but signed it into law anyway:

The City was not blind to the fact that the Ordinance might run afoul of the CDA and otherlaws. Following its passage, the Mayor's office said that the "mayor remains concerned that thislaw will not withstand a near-certain legal challenge and will in practice do nothing to aid the city'sregistration and enforcement of our short-term rental laws." ... The CityAttorney's Office acknowledged that the Ordinance could raise "issues under the CommunicationsDecency Act" but claimed that it had been drafted "in a way that minimizes" those issues byregulating "business activities" instead of "content." ... Despite the City'sbest efforts to tiptoe around the CDA through such semantic devices, the problem for the City isthat the substance of what the Ordinance seeks to do violates the CDA. No amount of creativedrafting can change that reality.

The Stored Communications Act argument involves the requirements of Airbnb to turn over information on its users. The SCA is a part of ECPA, the Electronic Communications Privacy Act, that is supposed to protect the privacy of electronic communications (though, it's in deep need of an update). Here, Airbnb points out that the city ordering it to release customer information almost certainly violates the SCA.

The verification provisions of the Ordinance separately are barred by the SCA. In a futileeffort to sidestep the CDA, the Ordinance requires Hosting Platforms to verify listings by disclosingto the City host names and addresses "prior to posting" a listing-and without a subpoena.... But in this failed endeavor to avoid Section230, the Ordinance runs smack into the SCA, which bars state laws that compel online services likeAirbnb to release customer information to governmental entities without legal process.

The First Amendment argument is basically a backstop in case the CDA and SCA arguments fail, and then there's a Constitutional argument to appeal. If the court deals with the case on CDA and SCA grounds, it probably will avoid the First Amendment question altogether. But, the basis is that regulating types of advertisements on Airbnb's platform is a form of a content-based restriction on speech. And there is a strong argument that in restricting the content on the platform, rather than merely punishing the people who post their content to Airbnb, that the law violates the First Amendment. There are exceptions but, generally speaking, the First Amendment doesn't like any law that blocks out speech entirely, even if it's commercial speech.

The Ordinance also violates Hosting Platforms' First Amendment rights. The prohibition onthe publication of certain rental advertisements-i.e., those listings without verified registrationnumbers-is a content-based speech restriction subject to "heightened judicial scrutiny" under theFirst Amendment.... The City cannot meet itsburden of demonstrating that this speech restriction directly advances a substantial state interest anddoes so in a narrowly tailored way. Even assuming the Ordinance actually advances a substantialstate interest (which is questionable), it places a far greater burden on speech than is necessary toachieve that end. The "normal method of deterring unlawful conduct" is to punish the conduct,rather than prohibit speech or advertising regarding it.... The City cannot show that the obvious alternative of enforcing its existing laws against third-party residents who rent properties in violation of the law, rather than against HostingPlatforms, would be ineffective or inadequate. Just the opposite: it is clear the City could enforceits laws directly against hosts who violate them-as it already has begun to do with increasingeffectiveness and success-rather than indirectly against Hosting Platforms that publish listings.Further, the law is unconstitutionally overbroad as it punishes platforms for publishing any listingwithout complying with its "verification" procedures-including those listings that may be lawful.

Whatever you think of Airbnb (and people seem to get more emotional about it than seems reasonable...), this lawsuit could become quite important in making sure that Section 230 remains strong in protecting internet services providing useful services to individuals. In the past month or so, we've seen a number of questionable Section 230 rulings (especially in California) that have started to chip away at this law. However, I don't see how any of those rulings directly apply to this case. The most direct comparison is probably the Model Mayhem case but, in that case, the court was clear that it allowed the California law requiring the platform to "warn" users to stand in part because it did not require the platform "to remove any user content or otherwise affect how it publishes or monitors such content." That's clearly not the case with this Airbnb law.

Either way, this is a case worth following, and hopefully one where the courts don't lop off another chunk of Section 230's protections (or, for that matter, the SCA's privacy protections).

Separately, there's a very, very bizarre NY Times article about this, falsely claiming that Airbnb is suing over a law it helped pass. That's just wrong. It's really bad reporting. Airbnb is clearly suing over the new language voted in by the SF Board of Supervisors earlier this month, and not the broader law that passed a few years ago.

Permalink | Comments | Email This Story