Airbnb Drops Lawsuit Against City of Anaheim

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By David McAfee

Aug. 23 — Airbnb Inc. has dropped its lawsuit over Anaheim, California’s ban on short-term rental (STR) listings, pointing to the city’s decision not to pursue fines against online platforms such as Airbnb and HomeAway ( Airbnb Inc. v. City of Anaheim, C.D. Cal., No. 8:16-cv-1398-AG-FFM, dismissal filed 8/22/16 ).

Airbnb voluntarily dismissed its complaint for declaratory and injunctive relief on Aug. 22. The company said the city of Anaheim now believes that certain rules under ordinance number 6374 “conflict with federal law.”

“We appreciate that Anaheim shares our view that the existing ordinance conflicted with federal law,” Airbnb spokeswoman Alison Schumer told Bloomberg BNA Aug. 23. “We need new rules for home sharing, and we want to work in a collaborative fashion with city leaders to craft rules that work.”

The Aug. 22 dismissal filing comes less than two weeks after Anaheim disclosed its decision not to pursue Airbnb or other STR platforms for listings that would otherwise be illegal under ordinance 6374. Airbnb had challenged the regulation about a month earlier.

Airbnb Sues Anaheim

Airbnb, in a complaint filed July 28, alleged that the Anaheim City Council's ordinance conflicts with the federal Communications Decency Act. The CDA protects online publishers against liability for content produced by others.

“The Ordinance seeks to hold ‘hosting platforms’ criminally and civilly liable for publishing, and for failing to screen and remove, their users’ advertisements of rentals that lack City-issued permits or are otherwise not compliant with ‘any’ City law or regulation,” attorneys for Airbnb wrote in the 20-page complaint. “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 CDA.”

Airbnb further argued that the law violates the First Amendment “as an impermissible content-based regulation.”

Letter From Anaheim

On Aug. 10, less than two weeks after Airbnb filed its complaint, Anaheim changed course on certain components of its new ordinance. Acting City Attorney Kristin A. Pelletier notified Airbnb’s attorneys of an “administrative determination” finding that the ordinance will not be applied to Airbnb, HomeAway or other hosting platforms.

“As such, the City will not seek to enforce Ordinance No. 6374 against hosting platforms and no criminal or civil penalties will be issued against hosting platforms under the ordinance,” Pelletier wrote in the Aug. 10 letter. “As we also discussed, while the City has no plans to do so, this should not be construed to estop or otherwise prohibit the city from subsequently adopting a different ordinance that is determined to be consistent with the Communications Decency Act and any other laws deemed to be applicable to hosting platforms.”

Representatives for the city of Anaheim didn’t immediately respond to Bloomberg BNA’s requests for comment.

Munger, Tolles & Olson LLP represented Airbnb. Counsel information for Anaheim wasn’t immediately available.

To contact the reporter on this story: David McAfee in Los Angeles at dmcafee@bna.com

To contact the editor responsible for this story: Keith Perine at kperine@bna.com

For More Information

Anaheim’s letter to Airbnb is available at http://src.bna.com/hX0.

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