Court: District Court, W.D. Washington; March 15, 2019; Federal District Court
The Court, presided over by Judge Richard A. Jones, addresses motions for summary judgment filed by the parties. The Court grants the Defendant's motion and denies the Plaintiffs' motions. In January 2018, University of Washington students petitioned the Seattle City Council to ban "online bidding services" for setting rent prices, due to concerns about affordable housing. In response, the City Council enacted Ordinance No. 125551 in March 2018, which prohibits landlords and potential tenants from using rental housing bidding platforms in Seattle. This ordinance is set to expire after one year unless the City requests an extension to complete its study on the impact of auctioning technology on the rental market.
Plaintiff Rentberry, Inc., a startup using bidding technology for rental transactions, claims it would list Seattle properties but for the ordinance. Plaintiff Delaney Wysingle, a rental property owner in Seattle, desires to use Rentberry to find tenants. On March 23, 2018, the Plaintiffs filed a lawsuit against the City for declaratory and injunctive relief, arguing that the ordinance infringes on their First and Fourteenth Amendment rights. The Plaintiffs filed for summary judgment on August 17, 2018, followed by the City’s cross-motion on September 13, 2018.
The legal standard for summary judgment is outlined, emphasizing that it is appropriate when no genuine dispute exists regarding material facts, and the moving party is entitled to judgment as a matter of law. The moving party must initially demonstrate the absence of a genuine issue, while the nonmoving party must present sufficient evidence to support their case.
The moving party in a summary judgment must initially demonstrate a lack of genuine issues of material fact, compelling the opposing party to present specific facts to contest the motion. The court must view evidence favorably towards the nonmoving party but is not required to search the record for supporting evidence. The opposing party must provide significant evidence; mere allegations or self-serving statements are insufficient to establish a genuine issue.
The City argues the case isn't justiciable and that the ordinance regulates nonexpressive conduct, while the Plaintiffs contend the ordinance fails First Amendment scrutiny. For standing, a plaintiff must prove no genuine issue exists regarding justiciability or merits, supported by affidavits or specific evidence of injury. Wysingle claims he suffered a concrete injury affecting his speech rights due to the ordinance, stating he intended to use Rentberry for advertising his property.
The City disputes Wysingle's standing, asserting he is not a member of Rentberry, lacks a rental property to list, and that any claims are moot since he rented out his property post-filing. The City also argues that Rentberry does not experience injury since the ordinance targets landlords and tenants. To establish federal court jurisdiction, a plaintiff must demonstrate standing through injury-in-fact, causation, and redressability, with First Amendment cases allowing for a broader interpretation of injury.
In determining standing for First Amendment claims in the Ninth Circuit, plaintiffs must demonstrate several factors: a reasonable likelihood of government enforcement of the law, concrete intent to violate the law, and applicability of the law to the plaintiffs. Simply citing the existence of a statute is insufficient to establish a case or controversy, as plaintiffs must show they face a real and immediate threat of injury, not just hypothetical harm. For injunctive relief, a clear threat of irreparable injury must be established.
Wysingle asserts that an ordinance applies to landlords and infringes on his First Amendment rights regarding bidding practices. He claims intent to use Rentberry's platform and cites a clear threat of enforcement from the City's website. However, the Court finds that Wysingle lacks standing as he was not a member of Rentberry at the lawsuit's filing, and his property was undergoing renovations with no clear timeline for availability. His vague assertions about future intentions do not constitute an "actual or imminent" injury. The Court distinguishes his case from Clark v. City of Lakewood, where the plaintiff had a direct stake in the business impacted by the ordinance and a definitive plan to resume operations. In contrast, Wysingle had never utilized a bidding platform and could not specify when his property would be ready for rental.
Wysingle did not create an account on Rentberry or any similar bidding platform, indicating a lack of immediate injury necessary for injunctive relief. Rentberry claims both its own standing and third-party standing on behalf of its users, but the Court finds that Rentberry has not demonstrated an injury in fact, which is essential for standing. The ordinance in question specifically applies to landlords and tenants, not Rentberry, and thus does not regulate its conduct. The Court cites precedent indicating that claims of future harm are not credible when the challenged regulation is not applicable to the plaintiff. Rentberry's assertion that its auction technology cannot be disabled, leading to its decision not to enter the Seattle market, does not constitute injury since the ordinance does not restrict its operations. Additionally, subjective feelings of being chilled from operating do not satisfy the requirement for objective harm. Rentberry's claim about the inability to disseminate its proprietary software is also unsupported, lacking specific examples of impacted business relationships or users. The Court finds Rentberry's claimed injury to be speculative. Lastly, Rentberry's argument that it is specifically targeted by the ordinance does not suffice, as it still must prove an injury linked to the regulation. Consequently, the Court concludes that Rentberry has not met the injury in fact requirement, leading to a dismissal of its claim.
Plaintiffs' First Amendment claim fails, even if they had standing, as the ordinance in question prohibits landlords and potential tenants from using rental housing bidding platforms within Seattle city limits. Plaintiffs assert that this ordinance infringes on their rights to communicate prices or advertise on such platforms. However, the Court distinguishes between restrictions on protected speech and those on economic activity or nonexpressive conduct. Citing Sorrell v. IMS Health Inc., the Court emphasizes that the First Amendment does not prevent regulations aimed at commerce from imposing incidental burdens on speech.
The Court determines that the ordinance regulates conduct rather than speech, specifically banning the use of bidding platforms for rental transactions, which lacks a significant expressive element according to precedents like Airbnb, Inc. v. City and Cnty. of San Francisco. The ordinance clarifies that simply publishing a rental advertisement does not constitute a rental housing bidding platform. The record indicates that the ordinance was not intended to suppress speech and does not target expressive activities.
Consequently, the Court concludes that the ordinance does not fulfill the necessary conditions for further First Amendment scrutiny, granting the City's motion for summary judgment and denying the Plaintiffs' motions.
