Airbnb & HomeAway Challenge Santa Monica

LOS ANGELES (CN) - Airbnb and HomeAway have sued Santa Monica, claiming a city ordinance on vacation rentals violates their free speech rights by punishing them for publishing third-party listings.

The separate federal lawsuits, both filed on Sept. 2 by major L.A. law firms, claim the city's short-term rental regulations violate the First, Fourth and 14th Amendments, and are preempted by the Communications Decency Act (CDA) which protects online operators from liability for content created by the hosts who use their services.

HomeAway is represented by Davis Wright Tremaine; Airbnb by Munger, Tolles & Olson.

"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 CDA," Airbnb's lawsuit says.

Airbnb claims the city ordinance violates the First Amendment because it "imposes strict liability on hosting platforms that host noncompliant short-term rental listings, and does so in an impermissibly vague manner."

The regulations took effect in June 2015 and bar vacation rentals for 30 days or less in properties that are for permanent residential use and where "transient occupancy" is not allowed.

Violations could bring a civil and criminal response, including imprisonment and fines.

Airbnb already has paid $20,000 in fines, KPCC radio reported in late July.

Also in July, an Airbnb host pleaded no-contest to eight misdemeanor charges of operating a business without a license and failing to comply with citations. He was fined $3,500, placed on two years probation, and ordered to stop renting his properties, according to the Los Angeles Times.

Airbnb spokeswoman Alison Schumer said the "clumsily-written law" fails to distinguish between "individual hosts who share the home in which they live and unwelcome commercial activity."

"We responded to the city's notices while continuing to evaluate our options and tried to have a dialogue with city officials. 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," Schumer wrote in an email.

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.

Santa Monica officials did not immediately respond to a request for comment.

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