Panel Rules Against Airbnb Hosts Fighting Chicago Ordinance

CHICAGO (CN) – Opponents of what they call Chicago’s “draconian” ordinance regulating Airbnb rentals must start from scratch because none of the individual hosts bringing the case have standing to challenge the law, the Seventh Circuit ruled Monday.

“We have before us an organization and individuals with strongly-held views about the constitutionality of the city’s ordinance, but Article III of the Constitution requires more: our authority is limited to deciding cases or controversies between adverse litigants, and without a clear indication that at least one named plaintiff has an actual or imminent injury, we have no authority to go further,” U.S. Circuit Judge Michael Scudder wrote in a 12-page opinion.

In 2016, the Chicago City Council passed a 58-page ordinance governing home sharing that placed new requirements on would-be hosts.

The law, which went into effect in 2017, requires hosts who list a room on Airbnb, HomeAway, or other sharing platforms to register with the city, and requires the websites they use to report personal and transaction information about each of them.

The ordinance also requires that hosts comply with commercial kitchen requirements, prohibits them from serving food to guests, and mandates that they have no pets or children at the residence. Violators may be subject to a $1,000 to $5,000 fine per day.

Keep Chicago Livable, a home-sharing host advocacy group, and Chicago resident and Airbnb host Benjamin Wolf filed a class-action lawsuit on behalf of a proposed subclass of Chicago hosts who rent their properties on sites like Airbnb, claiming the new rules violate the First Amendment and place “impossible burdens on hosts.”

A federal judge denied the plaintiffs a preliminary injunction to block the ordinance, and they appealed that ruling to the Seventh Circuit.

But the Chicago-based federal appeals court was highly unsympathetic to the organization’s argument at oral arguments in October, and remanded the case on procedural grounds on Monday.

“No longer owning property in Chicago, Benjamin Wolf’s claims have become moot,” Judge Scudder said.

Other named plaintiffs “[Susan] Maller, [Danielle] McCarron, and [Antoinette] Wonsey allege with no particularity how the ordinance (and not some other factor) is preventing or hampering any of their own home-sharing activities in Chicago; and the out-of-town renters, Monica Wolf and Doe, do not convey with sufficient clarity or particularity whether they still wish to visit Chicago and, if so, how the ordinance is chilling or inhibiting them from doing so,” the ruling states. (Parentheses in original.)

Keep Chicago Liveable also lacks standing as an organization to bring the lawsuit because it “is unable to identify an individual plaintiff with standing to bring any claim,” Scudder said.

The Seventh Circuit vacated the lower court’s decision to allow Keep Chicago Liveable to substitute parties and file a second amended complaint if it wishes to pursue its claims.

U.S. Circuit Judges Joel Flaum and Frank Easterbrook joined Scudder on the three-judge panel.

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