Hon. Richard A. Jones 1 2 3 4 5 6 7 IN THE UNITED STATES DISTRICT COURT 8 FOR THE WESTERN DISTRICT OF WASHINGTON 9 AT SEATTLE 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 RENTBERRY, INC., a Delaware corporation, and Delaney Wysingle, an individual, ) ) Civil Action No. 2:18-cv-00743-RAJ ) ) PLAINTIFFS’ MOTION FOR Plaintiffs, ) SUMMARY JUDGMENT ) ) NOTE ON MOTION CALENDAR: v. ) The City of SEATTLE, a Washington ) October 19, 2018 municipal corporation, ) ) ORAL ARGUMENT REQUESTED Defendant. ) ) TABLE OF CONTENTS Page TABLE OF AUTHORITIES .......................................................................................................... ii INTRODUCTION .......................................................................................................................... 1 STATEMENT OF THE CASE....................................................................................................... 1 ARGUMENT .................................................................................................................................. 4 I. The website ban is subject to the First Amendment because it restricts speech ................. 5 II. Strict scrutiny should apply to the moratorium................................................................... 9 a. The website ban must satisfy strict scrutiny because it imposes a prior restraint...... 9 b. The website ban must face strict scrutiny because it regulates a mixture of commercial and noncommercial speech based on content ...................................... 11 P.’s Mtn. for Prelim. Injunct. - i Case No. 2:18-cv-00743-RAJ Pacific Legal Foundation 10940 NE 33rd Pl., Suite 210 Bellevue, Washington 98004 (425) 576-0484 1 2 III. The moratorium fails even intermediate scrutiny because it does not directly advance the City’s interests and is more extensive than necessary ...................................................... 12 a. The website ban does not target misleading speech or speech related to unlawful activity...................................................................................................................... 13 b. Suspending speech as a preemptive strike while the City engages in further factfinding does not directly advance the government’s interests ................................. 14 3 4 5 6 7 8 9 10 11 12 13 14 1. The City banned speech without any evidence of harm .......................................... 15 2. The website ban does not facilitate the government studies that are the purpose of the Ordinance ........................................................................................................... 16 3. The website ban is underinclusive because it does not ban bidding in the residential rental market in general ........................................................................................... 17 c. The website ban is more extensive than necessary .................................................. 18 1. The City has less restrictive alternatives .................................................................. 19 2. The website ban is overinclusive ............................................................................. 19 CONCLUSION ............................................................................................................................. 20 TABLE OF AUTHORITIES Page 15 Cases 16 44 Liquormart v. Rhode Island, 517 U.S. 484 (1996) .......................................................... 6, 7, 22 17 ASF, Inc. v. City of Seattle, 408 F. Supp. 2d 1102 (W.D. Wash. 2005) ....................................... 11 18 Baba v. Bd. of Supervisors of the City and County of San Francisco, 19 124 Cal. App. 4th 504 (2004) .................................................................................................... 13 20 Bolger v. Young Drug Prods. Corp., 463 U.S. 60 (1983)............................................................. 13 21 Capital Cities Media, Inc. v. Toole, 463 U.S. 1303 (1983) .......................................................... 11 22 Central Hudson Gas & Electric Corporation v. Public Service Commission of New York, 23 447 U.S. 557 (1980) ................................................................................................................... 14 24 City of Cincinnati v. Discovery Network, 507 U.S. 410 (1993).................................................... 20 25 Coalition for Icann Transparency Inc. v. Verisign, Inc., 26 464 F. Supp. 2d 948 (N.D. Cal. 2006) ....................................................................................... 18 27 P.’s Mtn. for Prelim. Injunct. - ii Case No. 2:18-cv-00743-RAJ Pacific Legal Foundation 10940 NE 33rd Pl., Suite 210 Bellevue, Washington 98004 (425) 576-0484 1 Department of Professional Regulation, Board of Accountancy v. Rampell, 2 621 So. 2d 426 (Fla. 1993)........................................................................................................... 7 3 Edenfield v. Fane, 507 U.S. 761 (1993) ........................................................................ 6, 17-18, 20 4 Expressions Hair Design v. Schneiderman, 137 S. Ct. 1144 (2017) ........................................... 6-8 5 F.E.R.C. v. Electric Power Supply Ass’n, 136 S. Ct. 760 (2016) ................................................... 8 6 Florida Bar v. Went For It, Inc., 515 U.S. 618 (1995) ................................................................. 22 7 Greater New Orleans Broadcasting Ass’n, Inc. v. United States, 527 U.S. 173 (1999) .............. 17 8 Howard v. City of Jacksonville, 109 F. Supp. 2d 1360 (M.D. Fla. 2000) .................................... 11 9 Jim Gall Auctioneers, Inc. v. City of Coral Gables, 210 F.3d 1331 (11th Cir. 2000) .................... 7 10 Langdon v. Google, Inc., 474 F. Supp. 2d 622 (D. Del. 2007) ............................................... 10, 14 11 Lorillard Tobacco Co. v. Reilly, 533 U.S. 525 (2001)...................................................... 17, 21, 23 12 Metro Lights, LLC v. City of Los Angeles, 551 F.3d 898 (9th Cir. 2009)................................ 19-20 13 NAACP v. Button, 371 U.S. 415 (1963)........................................................................................ 18 14 Nebraska Press Ass’n v. Stuart, 427 U.S. 539 (1976) ............................................................. 10-12 15 New York Times Co. v. United States, 403 U.S. 713 (1971).................................................... 11-12 16 Real v. City of Long Beach, 852 F.3d 929 (9th Cir. 2017) ........................................................... 12 17 Reed v. Town of Gilbert, Ariz., 135 S. Ct. 2218 (2015) ................................................................ 13 18 Retail Digital Network v. Prieto, 861 F.3d 839 (2017) ................................................................ 12 19 Riley v. Nat’l Fed’n of the Blind, 487 U.S. 781 (1988) ................................................................ 13 20 Rubin v. Coors Brewing Co., 514 U.S. 476 (1995) ..................................................... 17, 19, 21-22 21 Sorrell v. IMS Health Inc., 564 U.S. 552 (2011) ................................................................... passim 22 Southeastern Promotions Ltd. v. Conrad, 420 U.S. 546 (1975) .............................................. 11-12 23 Turner Broadcasting System, Inc. v. FCC, 512 U.S. 622 (1994) ................................................. 17 24 United States v. Butler, 297 U.S. 1 (1936).................................................................................... 10 25 United States v. Playboy Entertainment Group, Inc., 529 U.S. 803 (2000) ............................. 4, 17 26 United States v. United Foods, Inc., 533 U.S. 405 (2001) ............................................................. 5 27 Universal Studios v. Corley, 273 F.3d 429 (2d Cir. 2001) ........................................................... 14 P.’s Mtn. for Prelim. Injunct. - iii Case No. 2:18-cv-00743-RAJ Pacific Legal Foundation 10940 NE 33rd Pl., Suite 210 Bellevue, Washington 98004 (425) 576-0484 1 Valle Del Sol Inc. v. Whiting, 709 F.3d 808 (9th Cir. 2013)......................................... 1, 15, 20, 23 2 Virginia State Bd. of Pharmacy v. Virginia Citizens Consumer Council, Inc., 3 424 U.S. 748 (1976) ............................................................................................................... 5, 13 4 World Wide Rush, LLC v. City of Los Angeles, 606 F.3d 676 (9th Cir. 2010) ............................. 15 5 Other Authorities 6 Seattle Municipal Code 7 SMC § 5.73 ................................................................................................................................ 22 8 SMC § 7.24.020 ....................................................................................................................... 1, 9 9 SMC § 7.24.090 ............................................................................................................... 1, 2, 8, 9 10 SMC § 14.08.050 ....................................................................................................................... 16 11 Tribe, Laurence, American Constitutional Law (2d ed. 1988) ....................................................... 8 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 P.’s Mtn. for Prelim. Injunct. - iv Case No. 2:18-cv-00743-RAJ Pacific Legal Foundation 10940 NE 33rd Pl., Suite 210 Bellevue, Washington 98004 (425) 576-0484 1 INTRODUCTION 2 The First Amendment embodies a “longstanding rule” that “restricting speech should be 3 the government’s tool of last resort.” Valle Del Sol Inc. v. Whiting, 709 F.3d 808, 826 (9th Cir. 4 2013). Yet the City here has restricted speech as a first resort, relying only on the ghost of a 5 suspicion. The City imposed a moratorium on the use of housing websites that allow users to bid 6 on rent because the City Council speculated that such websites might conflict with local 7 regulations or might inflate housing prices. This knee-jerk assault on speech does not withstand 8 First Amendment scrutiny. 9 STATEMENT OF THE CASE 10 The website ban 11 On March 19, 2018, the Seattle City Council voted to enact a “one-year prohibition on use 12 of rental housing bidding platforms.” Seattle City Council Ordinance 125551 at 1:5-6 (Exhibit 1); 13 see also SMC § 7.24.090(B). During that year, “[l]andlords and potential tenants are prohibited 14 from using rental housing bidding platforms for real property located in Seattle city limits.” Id. 15 § 7.24.090(A). This website ban defines “rental housing bidding platform” as “a person that 16 connects potential tenants and landlords via an application based or online platform to facilitate 17 rental housing auctions wherein potential tenants submit competing bids on certain lease 18 provisions including but not limited to housing costs and lease term, to landlords for approval or 19 denial.” Id. § 7.24.020. The ban was signed by the Mayor on March 30, 2018, and went into effect 20 on April 29, 2018. 21 During the moratorium, the Ordinance assigns several city departments to coordinate a 22 study regarding the banned platforms. Id. § 7.24.090(C)(3). Specifically, the Ordinance calls upon 23 the Office of Housing, the Office for Civil Rights, and the Department of Construction and 24 Inspection to investigate whether bidding platforms comply with fair housing laws and what 25 impact such platforms might have on “equitable access to Seattle’s rental housing market.” Id. 26 § 7.24.090(C)(3). The results of the study are to be submitted to the City Council before the ban 27 expires. Id. If, however, the city departments request more time to complete the study or the City P.s’ Mtn. for Summary Judgment - 1 Case No. 2:18-cv-00743-RAJ Pacific Legal Foundation 10940 NE 33rd Pl., Suite 210 Bellevue, Washington 98004 (425) 576-0484 1 Council needs more time to review it, the Council can extend the one-year ban for another year. 2 Id. § 7.24.090(C). 3 The Ordinance expressly concedes that the City “has not . . . studied” whether rental 4 bidding platforms harm the rental housing market or defy local regulations. Exhibit 1 at 1:18-25. 5 The Ordinance notes only that “it is unclear whether . . . these new services comply with the City’s 6 code, including new regulations such as first-in-time.” Exhibit 1 at 1:18-20. The City’s only 7 specific reference to a potentially relevant regulation is the first-in-time rule recently struck down 8 as unconstitutional in King County Superior Court. Id.; see also Yim v. City of Seattle, Case No. 9 17-2-05595-6 (King Cty. Sup. Ct. 2018), Order on Cross Motions for Summary Judgment, 10 attached as Exhibit 2. The City also confessed that “it is uncertain whether and how these services 11 impact Seattle’s rental housing market, as these services may have different effects on markets 12 depending on the scarcity of housing supply.” Exhibit 1 at 1:23-25. 13 This absence of evidence did not dissuade the Council from taking drastic action. The City 14 banned the use of the websites until it decides whether it would allow landlords and tenants to 15 communicate on rental bidding platforms. The Ordinance says, “[T]he Council wishes to 16 understand new technologies and innovation that may have impacts on communities throughout 17 Seattle prior to these new technologies and innovations becoming entrenched without regard to 18 whether their impacts are in line with Seattle’s values of equity and Seattle’s work toward 19 expanding access to rental housing.” Id. at 2:5-8. Thus, “the Council wishes to know more about 20 how these services function and the impact they may have on Seattle’s rental housing market 21 before allowing landlords and tenants to use them within the City.” Id. at 2:10-12. A city staff 22 memo to a committee of the Council says the website ban serves three purposes: “(1) to study 23 whether these types of services are compliant with the City’s current laws; (2) to give the City time 24 to create a regulatory framework if necessary before use of such services proliferates; and (3) to 25 determine current and potential impacts on Seattle’s Housing Market.” Seattle City Central Staff, 26 Asha Venkataram, CB 119198: Prohibiting Use of Rental Housing Bidding Platforms 1 (Mar. 7, 27 P.s’ Mtn. for Summary Judgment - 2 Case No. 2:18-cv-00743-RAJ Pacific Legal Foundation 10940 NE 33rd Pl., Suite 210 Bellevue, Washington 98004 (425) 576-0484 1 2018), attached as Exhibit 3. The memo identified two websites as targets of the ban: Rentberry 2 and Biddwell. See Exhibit 3 at 1. 3 Plaintiffs 4 1. Rentberry 5 Rentberry is a startup founded in late 2015 as a platform to facilitate communication about 6 housing and related services. Declaration of Oleksiy Lyubynskyy ¶ 2, attached as Exhibit 5. 7 Rentberry’s technology is designed to make the rental process less costly and more convenient and 8 secure. Id. Rentberry employs various innovations designed to bring fresh technology to a rental 9 industry that has seen little technological advancement. Id. ¶¶ 4-8. 10 One such innovation is Rentberry’s proprietary bidding technology. Id. ¶¶ 4-5. It benefits 11 both tenants and landlords by facilitating communication among all interested parties. Id. The 12 bidding technology helps landlords respond to changes in the rental market, while potential tenants 13 can easily communicate the price they are willing to pay and see competing offers. Id. The bidding 14 feature reduces delay, inefficiency, and uncertainty in the rental process. Id. ¶¶ 4-5. Figure one in 15 Exhibit 5 displays a screenshot of the website’s bidding feature. See id. ¶ 12, Figure 1. 16 The platform allows landlords to post asking prices for rent and the security deposit. Id. 17 ¶ 4. Applicants can communicate their bid above or below the landlords’ asking prices. Id. 18 Rentberry utilizes an algorithm to provide potential tenants with a recommended bid based on 19 market conditions. Id. ¶ 5. A potential tenant on Rentberry can see details about the highest bid, as 20 well as various characteristics about the high bidder, such as their credit score, their monthly salary, 21 whether they have pets, and the number of roommates. Id. They can also see the average credit 22 score of individuals interested in that property, as well as an estimation of the overall demand for 23 that unit. Id. Landlords can view all bids submitted and application details, including background 24 check information provided by Rentberry. Id. The bidding feature is an integral component of 25 Rentberry and landlords using Rentberry cannot post a fixed price or refuse to allow bids. Id. 26 Landlords retain the right to select any bidder or no bidder. Id. 27 P.s’ Mtn. for Summary Judgment - 3 Case No. 2:18-cv-00743-RAJ Pacific Legal Foundation 10940 NE 33rd Pl., Suite 210 Bellevue, Washington 98004 (425) 576-0484 1 Rentberry’s website provides a search engine that allows registered users to filter searches 2 for housing by price range, housing type, number of bedrooms, amenities, and so on. See id., Figure 3 3. Search results display customized advertisements posted by landlords, which can include 4 photographs, descriptions, and rental criteria. See id., Figure 2. After finding a desirable listing, 5 potential tenants submit their bids and complete the application process on the Rentberry site. Id. 6 Once a bid is posted, Rentberry provides a forum for landlord-tenant communication, maintenance 7 requests, and rent payment. Id. Currently, Rentberry does not allow landlords to list properties in 8 Seattle, although it did have landlord users in Seattle prior to the moratorium. Id. ¶ 11. If not for 9 the website ban, Rentberry would make its site available to Seattle tenants and landlords. Id. 10 2. Delaney Wysingle 11 Delaney Wysingle owns and rents out a single-family home in Seattle. Declaration of 12 Delaney Wysingle ¶ 2, attached as Exhibit 4. After inheriting the home in 2015, he rented it out to 13 a single tenant from June 2015 to February 2018. Id. Wysingle’s property is currently vacant 14 following a remodel, and he is searching for a new tenant. Id. ¶¶ 3, 5. If not for the website ban, 15 Wysingle would advertise his property and select his next tenant through a rental bidding platform. 16 Id. ¶ 4. He wants to experiment with rental bidding platforms because he believes they provide 17 innovative features that can help landlords and tenants to settle on rent based on fair market value. 18 Wysingle would be willing to accept a bid below his asking price if the applicant seemed qualified. 19 Id. ¶ 4. 20 ARGUMENT 21 Government officials cannot ban use of websites just because they worry that the speech 22 on those sites might violate local laws or might raise housing prices. When it comes to the internet, 23 the First Amendment favors an unhindered environment for speech: “Technology expands the 24 capacity to choose; and it denies the potential of this revolution if we assume the Government is 25 best positioned to make these choices for us.” United States v. Playboy Entertainment Group, Inc., 26 529 U.S. 803, 818 (2000). Whether this Court proceeds under the rubric of strict or intermediate 27 scrutiny, a law banning use of a website without any evidence of harm cannot stand. P.s’ Mtn. for Summary Judgment - 4 Case No. 2:18-cv-00743-RAJ Pacific Legal Foundation 10940 NE 33rd Pl., Suite 210 Bellevue, Washington 98004 (425) 576-0484 1 I. The website ban is subject to the First Amendment because it restricts speech 2 By prohibiting use of rental bidding platforms, the Seattle moratorium restricts speech in 3 the form of communication about prices and other speech activities on the platforms, such as 4 housing advertisements. The moratorium must therefore satisfy First Amendment scrutiny. 5 Information about price and market demand is valuable to landlords and tenants alike, and 6 the First Amendment protects “the consumer’s interest in the free flow of truthful commercial 7 information.” United States v. United Foods, Inc., 533 U.S. 405, 426 (2001). Information “as to 8 who is producing and selling what product, for what reason, and at what price” is “indispensable” 9 to wise economic decisions. Virginia State Bd. of Pharmacy v. Virginia Citizens Consumer 10 Council, Inc., 424 U.S. 748, 765 (1976); see also Sorrell v. IMS Health Inc., 564 U.S. 552, 566 11 (2011) (A “consumer’s concern for the free flow of commercial speech often may be far keener 12 than his concern for urgent political dialogue.”) (citation omitted). The First Amendment’s role in 13 safeguarding such information preserves the “public interest that those decisions . . . be intelligent 14 and well-informed.” Virginia State Bd., 424 U.S. at 765. 15 Indeed, communication about prices enjoys specific First Amendment protection. In 16 Virginia State Board of Pharmacy, the Supreme Court invalidated a state rule that forbade 17 pharmacists from advertising prices. 425 U.S. at 773. The Court held that a state cannot suppress 18 price advertising because of fears about the “information’s effect upon its disseminators and its 19 recipients.” Id. Likewise, in 44 Liquormart v. Rhode Island, the Supreme Court held that a state 20 law preventing liquor stores from posting prices was a speech restriction. 517 U.S. 484, 495 (1996). 21 Such restrictions on pricing information could not withstand First Amendment scrutiny because 22 speech about pricing offers “vital information about the market.” Id. And recently, in Expressions 23 Hair Design v. Schneiderman, the Supreme Court held that regulations impose a burden on 24 protected speech when they restrict the method that businesses use to communicate about their 25 prices. 137 S. Ct. 1144, 1150-51 (2017). 26 Speech restrictions that stifle reciprocal communication between buyer and seller pose an 27 even greater threat to protected speech than a one-way advertisement. See Va. State Bd. of P.s’ Mtn. for Summary Judgment - 5 Case No. 2:18-cv-00743-RAJ Pacific Legal Foundation 10940 NE 33rd Pl., Suite 210 Bellevue, Washington 98004 (425) 576-0484 1 Pharmacy, 425 U.S. at 756 (“[W]here a speaker exists, . . . the protection afforded is to the 2 communication, to its source and to its recipients both.”). For example, in Edenfield v. Fane, the 3 Supreme Court addressed a state ban on direct solicitation by certified public accountants. 507 4 U.S. 761, 763-64 (1993). The Court noted that the restricted speech was “of considerable value” 5 because solicitation allowed “direct and spontaneous communication between buyer and seller.” 6 Id. at 766. Reciprocal communication of this sort offers greater value than a one-way advertisement 7 because buyer and seller can better negotiate, assess market demand, and reach a fully informed 8 arrangement based on mutual communication. See id. 9 In light of these precedents, a mutual bidding process is protected commercial speech. As 10 the Supreme Court has repeatedly held, communicating about price is protected by the First 11 Amendment. Indeed, a restriction on bidding presents a greater First Amendment concern than the 12 price-advertising restrictions in Virginia State Board of Pharmacy and 44 Liquormart because 13 bidding involves the kind of reciprocal buyer-seller communication that the Supreme Court 14 deemed to be of “considerable value” in Edenfield. Id. Several courts have subjected bidding 15 restrictions to First Amendment analysis. For example, in Department of Professional Regulation, 16 Board of Accountancy v. Rampell, the Florida Supreme Court held that a law prohibiting 17 accountants from bidding for work “restricts economic expression constituting commercial 18 speech.” 621 So. 2d 426, 428 (Fla. 1993). Such bidding constituted communication about prices 19 subject to First Amendment protection, and the law failed to pass intermediate scrutiny. Id. at 428, 20 430-31. A federal district court in Florida drew a similar conclusion. Jim Gall Auctioneers, Inc. v. 21 City of Coral Gables, 210 F.3d 1331, 1332 (11th Cir. 2000) (noting but not addressing the district 22 court’s holding that running an auction constituted protected commercial speech). 23 Bidding is not simply a business activity. When a law regulates “the communication of 24 prices rather than prices themselves,” that law regulates speech. Expressions Hair Design, 137 S. 25 Ct. at 1151. Broad authority to regulate commercial transactions does not include within it the 26 power to directly regulate speech related to those transactions. See 44 Liquormart, 517 U.S. at 512 27 (“Thus, it is no answer that commercial speech concerns products and services that the government P.s’ Mtn. for Summary Judgment - 6 Case No. 2:18-cv-00743-RAJ Pacific Legal Foundation 10940 NE 33rd Pl., Suite 210 Bellevue, Washington 98004 (425) 576-0484 1 may freely regulate. Our decisions . . . have made plain that a State’s regulation of the sale of goods 2 differs in kind from a State’s regulation of accurate information about those goods.”). 3 Instead of recasting commercial speech as commercial activity, the Supreme Court applies 4 intermediate, heightened scrutiny as the proper means to balance the state’s interest in regulating 5 commerce with market participants’ speech interests. See 44 Liquormart, 517 U.S. at 499; see also 6 Sorrell, 564 U.S. at 570 (rejecting the state’s argument that sharing prescriber-identifying 7 information is conduct). The Court in 44 Liquormart noted that a government’s traditional 8 authority to regulate commerce was adequately protected by imposing a less severe level of 9 scrutiny, not by redefining commercial speech as a business activity: “The entire commercial 10 speech doctrine, after all, represents an accommodation between the right to speak and hear 11 expression about goods and services and the right of government to regulate the sales of such 12 goods and services.” Id. at 499 (quoting Laurence Tribe, American Constitutional Law §§ 12-15, 13 903 (2d ed. 1988)). 14 The Supreme Court specifically addressed the difference between price regulation and 15 regulation of communication about price in Expressions Hair Design. The court of appeals below 16 had held that state law regulating credit-card surcharges was a price regulation and therefore did 17 not regulate speech. Expressions Hair, 137 S. Ct. at 1148. The Supreme Court disagreed, noting 18 that the law “tells merchants nothing about the amount they are allowed to collect . . . . What the 19 law does regulate is how sellers may communicate their prices.” Id. at 1151 (emphasis added). In 20 the context of bidding, a law that imposed some kind of cap on the highest bid might be an example 21 of a price regulation with an incidental effect on speech. A restriction on communicating a bid, 22 however, is a speech regulation, not a price regulation. 23 The bidding that occurs on platforms like Rentberry is protected commercial speech about 24 pricing. Under the City’s moratorium, “[l]andlords and potential tenants are prohibited from using 25 rental housing bidding platforms for real property located in Seattle city limits.” SMC 26 § 7.24.090(A). A landlord posts a threshold price and renters post competing bids. These bids are 27 designed to communicate valuable information among landlords and potential tenants alike by P.s’ Mtn. for Summary Judgment - 7 Case No. 2:18-cv-00743-RAJ Pacific Legal Foundation 10940 NE 33rd Pl., Suite 210 Bellevue, Washington 98004 (425) 576-0484 1 helping them assess demand for a unit and settle on a reasonable price. Market information is vital 2 in our free enterprise system, and bidding is a valuable way to share market information. See 3 F.E.R.C. v. Electric Power Supply Ass’n, 136 S. Ct. 760, 774, 776 (2016) (describing market 4 mechanism in auction context). Bidding online, just as in an auction, involves many people 5 expressing their preferences. Thus, the bidding component of these banned websites involves 6 protected speech. 7 The moratorium extends to other protected speech as well. It imposes a blanket ban on the 8 use of an entire online platform for residential housing in Seattle. The bidding component of such 9 platforms is not singled out for proscription. Rather, use of any element of the platform or 10 application—if the platform includes a bidding component—is forbidden as to Seattle properties. 11 This is clear from the definition of “Rental housing bidding platform,” which “means a person that 12 connects potential tenants and landlords via an application based or online platform to facilitate 13 rental housing auctions wherein potential tenants submit competing bids on certain lease 14 provisions.” SMC § 7.24.020. The moratorium extends to a platform that facilitates bidding and 15 “wherein” bidding occurs, not just bidding alone. 16 This is consistent with the ordinary meaning of “platform” in the software context, which 17 is defined as a software system rather than one particular function on a website. See 18 http://www.dictionary.com/browse/software-platform. The City’s own legislative history uses 19 “platform” in this common-sense fashion. An internal staff memo to a Council committee stated: 20 “Rental housing bidding platforms such as Rentberry and Biddwell are sites for online auctions 21 that allow landlords to list available rental units and potential tenants to bid on those units.” Exhibit 22 3 at 1 (emphasis added). Thus, the City understood “rental housing bidding platforms” to be “sites” 23 where landlords advertise and tenants bid—not just the bidding function on those sites. 24 The City’s definition of a rental bidding platform as an “application” or “online platform” 25 further demonstrates that the moratorium extends to the whole software or website, not just the 26 bidding function. The Ordinance clarifies that “[m]erely publishing a rental housing advertisement 27 does not make a person a rental housing bidding platform.” SMC § 7.24.020. This exception, P.s’ Mtn. for Summary Judgment - 8 Case No. 2:18-cv-00743-RAJ Pacific Legal Foundation 10940 NE 33rd Pl., Suite 210 Bellevue, Washington 98004 (425) 576-0484 1 however, does not reach advertisements published on a website that otherwise satisfies the 2 definition of a rental housing bidding platform. 3 Another proof of the moratorium’s broad scope is the law’s application to landlords. 4 “Landlords and potential tenants” are both forbidden from using bidding platforms. SMC 5 § 7.24.090(A). If bidding alone was the only function of these sites singled out for proscription, 6 then forbidding landlords from using rental bidding platforms would be pointless; after all, the 7 landlords do not post bids, only the potential tenants do. If—as the City is likely to argue—this 8 moratorium only proscribes posting bids, then the moratorium’s express application to landlords 9 would be surplusage. See United States v. Butler, 297 U.S. 1, 65 (1936) (“These words cannot be 10 meaningless, else they would not have been used.”). 11 The breadth of the moratorium restricts an array of speech on these platforms unrelated to 12 bidding, such as advertising a Seattle unit through images and descriptions, use of search engine 13 functions for prospective tenants, communicating about maintenance requests, providing 14 references, and so forth. See Langdon v. Google, Inc., 474 F. Supp. 2d 622, 629-30 (D. Del. 2007) 15 (search engine results are protected speech). Moreover, Rentberry’s website cannot function 16 without the bidding component. Exhibit 5 ¶ 5. Thus, even if listing and bidding on a price did not 17 constitute protected expression, the website ban nonetheless forbids a wide array of protected 18 speech. The ban therefore must satisfy First Amendment scrutiny. 19 II. Strict scrutiny should apply to the moratorium 20 Strict scrutiny should apply to the moratorium because it imposes a prior restraint—the 21 most egregious form of speech restriction—and because it restricts an inextricably intertwined 22 mixture of commercial and noncommercial speech. Alternatively, intermediate scrutiny—the 23 traditional test for commercial speech restrictions—should apply. 24 a. The website ban must satisfy strict scrutiny because it imposes a prior restraint 25 Prior restraints on speech are “the most serious and the least tolerable infringement on First 26 Amendment rights.” Nebraska Press Ass’n v. Stuart, 427 U.S. 539, 559 (1976). Prior restraint 27 arises when government wields the power “to deny use of a forum in advance of actual P.s’ Mtn. for Summary Judgment - 9 Case No. 2:18-cv-00743-RAJ Pacific Legal Foundation 10940 NE 33rd Pl., Suite 210 Bellevue, Washington 98004 (425) 576-0484 1 expression.” Southeastern Promotions Ltd. v. Conrad, 420 U.S. 546, 553 (1975). Thus, prior 2 restraints “bear[] a heavy presumption against [their] constitutional validity.” Capital Cities 3 Media, Inc. v. Toole, 463 U.S. 1303, 1305 (1983) (quoting New York Times Co. v. United States, 4 403 U.S. 713, 714 (1971)). In order for a prior restraint to pass constitutional muster, the 5 government must satisfy strict scrutiny. Nebraska Press Ass’n, 427 U.S. at 571. 6 A speech moratorium is a prior restraint. For example, this Court invalidated a Seattle 7 moratorium on adult cabaret licenses as a prior restraint on speech. ASF, Inc. v. City of Seattle, 408 8 F. Supp. 2d 1102, 1107 (W.D. Wash. 2005). The cabaret moratorium not only failed to provide a 9 “prompt time frame” for lifting the speech restriction, but it also went a “step further in suppressing 10 protected speech and prohibiting any new adult cabarets from opening.” Id. at 1108. Although the 11 Seattle cabaret moratorium lasted a startling 17 years, a federal court struck down a similar cabaret 12 moratorium that lasted only 120 days. Howard v. City of Jacksonville, 109 F. Supp. 2d 1360, 1362 13 (M.D. Fla. 2000). 14 Prior restraints arise often in licensing settings like the Seattle cabaret moratorium, but 15 prior restraints are not limited to those settings. A prior restraint also arises when a government 16 imposes a temporary order or law that prevents someone from speaking in advance. See, e.g., New 17 York Times, 403 U.S. at 714 (proposed temporary injunction against publication of classified 18 information was a prior restraint); Nebraska Press Ass’n, 427 U.S. at 570 (injunction against news 19 coverage on a criminal trial while the trial was ongoing was an unconstitutional prior restraint); 20 Real v. City of Long Beach, 852 F.3d 929, 935 (9th Cir. 2017) (plaintiff properly alleged that 21 zoning ordinance targeting tattoo parlors constituted a prior restraint in violation of the First 22 Amendment). 23 A speculative approach to speech regulation is another feature of prior restraints. Prior 24 restraints seek to halt speech in advance “predicated upon surmise or conjecture that untoward 25 consequences may result.” New York Times, 403 U.S. at 725-26 (government sought to temporarily 26 enjoin publication of sensitive information on the Vietnam War based on the government’s 27 unfounded concern that it might endanger national security). P.s’ Mtn. for Summary Judgment - 10 Case No. 2:18-cv-00743-RAJ Pacific Legal Foundation 10940 NE 33rd Pl., Suite 210 Bellevue, Washington 98004 (425) 576-0484 1 Seattle’s moratorium is a prior restraint because it gives “public officials the power to deny 2 use of a forum in advance of actual expression.” Southeastern Promotions, 420 U.S. at 553. The 3 moratorium creates a blanket ban on protected speech for a full year, with the option to extend the 4 ban for another year. The moratorium serves a preventative function, offering only speculation as 5 its justification. As such, it is subject to strict scrutiny. 1 b. The website ban must face strict scrutiny because it regulates a mixture of commercial and noncommercial speech based on content 6 7 8 The website ban is also subject to strict scrutiny as a content-based restriction on 9 intermingled commercial and noncommercial speech. See Reed v. Town of Gilbert, Ariz., 135 S. 10 Ct. 2218, 2228 (2015) (“A law that is content based on its face is subject to strict scrutiny.”). 11 The website ban restricts both commercial and noncommercial speech on the basis of 12 content. The commercial speech doctrine generally applies when the speech “does no more than 13 propose a commercial transaction.” Va. State Bd. of Pharmacy, 425 U.S. at 776. Yet an economic 14 motivation for speech is “clearly [] insufficient by itself to turn [communications] into commercial 15 speech.” Bolger v. Young Drug Prods. Corp., 463 U.S. 60, 67 (1983). Speech that, at first blush, 16 appears commercial may nonetheless be entitled to the full force of First Amendment protections 17 if it is “inextricably intertwined with otherwise fully protected speech.” Riley v. Nat’l Fed’n of the 18 Blind, 487 U.S. 781, 795-96 (1988). 19 Rentberry facilitates a panoply of communications between landlords and tenants. These 20 include not just property advertisements, but also direct communication between landlords and 21 22 23 24 25 26 27 1 Heightened judicial scrutiny applies to a law regulating commercial speech that “imposes a burden based on the content of speech and the identity of the speaker.” Sorrell, 564 U.S. at 567. As a prior restraint, the website ban bears these markings because it bans speech based on its content (communication about rental housing) and based on the speakers (landlords and potential tenants). It must therefore face strict scrutiny. This conclusion has a Supreme Court pedigree, but it is nonetheless foreclosed in this Court by Ninth Circuit precedent. In Retail Digital Network v. Prieto, over Chief Judge Thomas’s dissent, the Ninth Circuit held that content-based restrictions on commercial speech need only satisfy intermediate scrutiny. Retail Digital Network, 861 F.3d 839, 846 (2017); id. at 851 (Thomas, C.J., dissenting). Wysingle and Rentberry therefore preserve this argument over the proper reading of Sorrell for later proceedings. P.s’ Mtn. for Summary Judgment - 11 Case No. 2:18-cv-00743-RAJ Pacific Legal Foundation 10940 NE 33rd Pl., Suite 210 Bellevue, Washington 98004 (425) 576-0484 1 potential tenants, maintenance service requests, housing references, and the like. See Exhibit 5 2 ¶¶ 6-8. As a state court in this Circuit noted, the “landlord-tenant relationship, though it surely has 3 a commercial component, is more complex, personal and permanent than the relationship between 4 the seller of goods and services and his or her potential buyer.” Baba v. Bd. of Supervisors of the 5 City and County of San Francisco, 124 Cal. App. 4th 504, 516 (2004). Even the algorithms that 6 Rentberry uses to communicate information to users—such as housing and pricing 7 recommendations—enjoy full First Amendment protection. See Universal Studios v. Corley, 273 8 F.3d 429, 445-48 (2d Cir. 2001) (computer code is protected speech). Additionally, Rentberry 9 compiles and disseminates information through its search engine, a form of protected, 10 noncommercial speech. Exhibit 5 ¶ 6; see also Sorrell, 564 U.S. at 570 (“The creation and 11 dissemination of information are speech within the meaning of the First Amendment.”), Langdon, 12 474 F. Supp. 2d at 629-30 (search engine results are compilations of information enjoying First 13 Amendment protection). Wysingle wishes to engage in this array of speech activities facilitated by 14 Rentberry and prohibited by the moratorium. Exhibit 4. Thus, the commercial speech doctrine does 15 not apply here, and the Court should review the content-based restrictions in the website ban under 16 strict scrutiny. 17 III. 18 The moratorium fails even intermediate scrutiny because it does not directly advance the City’s interests and is more extensive than necessary 19 While strict scrutiny is the proper standard for assessing the moratorium, the Ordinance 20 cannot survive even the more forgiving intermediate standard of review for restrictions on purely 21 commercial speech. The City proffers three rationales for the website ban: (1) to study whether 22 rent-bidding platforms comply with local law; (2) to study the impact of rent-bidding platforms on 23 the Seattle housing market; and (3) to give the City time to create a regulatory framework if 24 necessary before the use of these platforms expands. This preemptive strike against speech fails 25 even under intermediate scrutiny. 26 /// 27 P.s’ Mtn. for Summary Judgment - 12 Case No. 2:18-cv-00743-RAJ Pacific Legal Foundation 10940 NE 33rd Pl., Suite 210 Bellevue, Washington 98004 (425) 576-0484 1 Commercial speech restrictions are subject to a four-part test, set out in Central Hudson 2 Gas & Electric Corporation v. Public Service Commission of New York, 447 U.S. 557, 566 (1980), 3 which asks: 4 • Whether the speech is related to lawful activity and is not deceptive; 5 • Whether the government interest at stake is substantial; 6 • Whether the speech restriction “directly and materially” serves that interest; and 7 • Whether the restriction is “no more extensive than necessary.” 8 See also World Wide Rush, LLC v. City of Los Angeles, 606 F.3d 676, 684 (9th Cir. 2010). 9 The first step is a threshold issue that determines whether the restricted speech enjoys First 10 Amendment protection. Id. If the speech at issue passes this threshold, then the government bears 11 the burden of satisfying the other three steps. Valle Del Sol, 709 F.3d at 816. The website ban 12 targets speech that is neither unlawful nor deceitful, so the City must show that its interest is 13 substantial, that the ban furthers that interest, and that the ban is not more extensive than necessary 14 to achieve the interest. At minimum, the City fails steps three and four because the ban does not 15 directly advance a substantial government interest and goes far beyond what is necessary to 16 achieve its interest. 17 18 a. The website ban does not target misleading speech or speech related to unlawful activity 19 The speech targeted by the website ban meets the threshold inquiry of Central Hudson: it 20 is neither deceptive nor related to unlawful activity. The Ordinance raises a concern that rental 21 bidding might not comply with local laws or regulations. See Exhibit 1 at 1:17-20. But the City 22 Council makes no finding to that effect. Instead, the Ordinance only ventures that “it is unclear 23 whether the structure and operation of these new services comply with the City’s code.” Id. Indeed, 24 a primary rationale for the Ordinance is to study whether the speech at issue is lawful. The City’s 25 speculative concerns cannot strip the targeted speech of First Amendment protection. 26 The only specific law cited by the City as possibly in tension with rental bidding platforms 27 is the City’s first-in-time rule. Id. First-in-time requires landlords to rent to the first qualified P.s’ Mtn. for Summary Judgment - 13 Case No. 2:18-cv-00743-RAJ Pacific Legal Foundation 10940 NE 33rd Pl., Suite 210 Bellevue, Washington 98004 (425) 576-0484 1 applicant. See SMC § 14.08.050. That rule, however, was struck down as unconstitutional by the 2 King County Superior Court, which held the first-in-time rule was an uncompensated taking for 3 private use and that it violated landlords’ due-process and free-speech rights. See Exhibit 2. Thus, 4 even if the City made an express determination that rental bidding violates first-in-time, the rule 5 is no longer in effect and cannot support the website ban. 2 And even if first-in-time were in effect 6 and in conflict with rental bidding, the website ban is substantially broader than necessary to ensure 7 compliance with first-in-time, since the first-in-time rule does not extend to all properties, such as 8 accessory dwelling units, while the website ban does. See SMC § 14.08.050(F). 9 The speech proscribed by the website ban is neither unlawful nor deceptive, so the City 10 must satisfy the other three steps of Central Hudson. The moratorium and its legislative history 11 point to three interests purportedly served by the ban: “(1) to study whether these types of services 12 are compliant with the City’s current laws; (2) to give the City time to create a regulatory 13 framework if necessary before use of such services proliferates; and (3) to determine current and 14 potential impacts on Seattle’s Housing Market.” Exhibit 3 at 1. Even assuming that the City can 15 show that its interests here are substantial, it cannot satisfy either the advancement or narrow 16 tailoring requirements. b. 17 18 Suspending speech as a preemptive strike while the City engages in further fact-finding does not directly advance the government’s interests 19 A regulation of commercial speech must “directly advance” the government’s substantial 20 interest. Central Hudson, 447 U.S. at 564. The City cannot satisfy the direct advancement step for 21 three reasons: (1) the City cites no evidence that use of rental bidding platforms is harmful or 22 unlawful; (2) the ban does not advance the City’s interest in studying rental bidding platforms; and 23 (3) the website ban is underinclusive because it allows landlords and tenants to bid on rent by other 24 means. 25 /// 26 2 27 The City filed a notice of appeal in the Yim case in April 2018. Yim v. City of Seattle, Case No. 17-2-05595-6 (King Cty. Supr. Ct. 2018), appeal docketed, No. 95813-1 (Wash. Supreme Ct. Apr. 26, 2018). The order invalidating the ordinance, however, has not been stayed pending appeal. P.s’ Mtn. for Summary Judgment - 14 Case No. 2:18-cv-00743-RAJ Pacific Legal Foundation 10940 NE 33rd Pl., Suite 210 Bellevue, Washington 98004 (425) 576-0484 1 1. The City banned speech without any evidence of harm 2 A speech restriction does not directly advance the government’s interests if the restriction 3 only swipes at speculative harms. 3 “The First Amendment requires a more careful assessment and 4 characterization of an evil” before imposing a speech restriction. Playboy, 529 U.S. at 819. When 5 government restricts speech to “prevent anticipated harms, it must do more than simply ‘posit the 6 existence of the disease to be cured.’” Turner Broadcasting System, Inc. v. FCC, 512 U.S. 622, 7 664 (1994). Even under intermediate scrutiny, the City’s fear must find substance in evidence that 8 “the harms it recites are real” rather than “mere speculation and conjecture.” Lorillard Tobacco 9 Co. v. Reilly, 533 U.S. 525, 555 (2001) (quoting Greater New Orleans Broadcasting Ass’n, 527 10 U.S. at 188). This demand for concrete evidence is not satisfied by “anecdotal evidence and 11 educated guesses.” Rubin v. Coors Brewing Co., 514 U.S. 476, 490 (1995). For example, in 12 Edenfield v. Fane, the government banned CPA solicitation without presenting any studies 13 suggesting that personal solicitation for accounting services increased the risk of fraud. Edenfield, 14 507 U.S. at 771. With nothing more than “a series of conclusory statements,” the government 15 failed to satisfy its burden. Id. 16 Just as courts demand concrete evidence of harm, they also view prophylactic speech 17 restrictions with extreme skepticism. The Supreme Court has consistently frowned upon 18 “preventative rules in the First Amendment context.” Id. at 777. In Edenfield, Florida tried to 19 defend its solicitation ban as a prophylactic rule that helped to diminish the likelihood of fraud. Id. 20 at 768. The Court rejected this approach: “Broad prophylactic rules in the area of free expression 21 are suspect. Precision of regulation must be the touchstone in an area so closely touching our most 22 precious freedoms.” Id. at 777 (quoting NAACP v. Button, 371 U.S. 415, 438 (1963)). 23 Here, the City candidly admits in the text of the Ordinance that it does not know whether 24 there exists any basis for its fears that bidding on rents might not comply with city regulations or 25 that rental bidding platforms might cause housing costs to rise. See Exhibit 1 at 1:17-25. The City 26 3 27 The Supreme Court considers the speculative nature of an alleged harm under the directadvancement step of Central Hudson. See, e.g., Greater New Orleans Broadcasting Ass’n, Inc. v. United States, 527 U.S. 173, 188 (1999). P.s’ Mtn. for Summary Judgment - 15 Case No. 2:18-cv-00743-RAJ Pacific Legal Foundation 10940 NE 33rd Pl., Suite 210 Bellevue, Washington 98004 (425) 576-0484 1 stated that “it is unclear” whether the rental bidding websites violate local ordinances and likewise 2 “uncertain whether and how these services impact Seattle’s rental housing market.” Id. It is far 3 from obvious that bidding would inflate prices in Seattle’s housing market, given that bidders can 4 bid below a landlord’s default price. See Coalition for Icann Transparency Inc. v. Verisign, Inc., 5 464 F. Supp. 2d 948, 964 (N.D. Cal. 2006) (rejecting notion that an auction system of allocating 6 resources—as opposed to a lottery system—would have “predictable adverse price effects” on 7 consumers). Swatting at phantoms does not directly advance the government’s interest in 8 compliance with local laws or policies. The City cannot ban speech based on anxiety. 9 10 2. The website ban does not facilitate the government studies that are the purpose of the Ordinance 11 A restriction on commercial speech must have a “logical connection” between means and 12 end. Metro Lights, LLC v. City of Los Angeles, 551 F.3d 898, 905 (9th Cir. 2009). For example, in 13 Rubin v. Coors Brewing Company, the Supreme Court struck down an internally contradictory 14 regulatory scheme on First Amendment grounds. To combat strength wars in the alcohol industry, 15 federal law prohibited brewers from listing alcohol content on beer labels, but it also mandated 16 disclosure of alcohol content on wine labels. Rubin, 514 U.S. at 488. The Court invalidated this 17 self-defeating scheme: “[T]he irrationality of this unique and puzzling regulatory framework 18 ensures that the labeling ban will fail to achieve [its] end.” Id. at 489. The speech regulation simply 19 was not “drawn to achieve” the purported government interest. See Sorrell, 564 U.S. at 572. 20 The website ban has no logical connection to the City’s fact-finding purposes. The City’s 21 purposes as articulated by the Ordinance are to study the effects and legality of rental bidding 22 platforms. See Exhibit 1. Banning the use of such websites during the course of investigation 23 cannot assist the departments assigned to study these platforms. Indeed, the website ban 24 undermines any investigation because the City cannot observe the impact of rental bidding 25 platforms in Seattle while such platforms are banned. And the City itself admits that the impact of 26 these bidding platforms depends on local market conditions, which means that evidence from other 27 markets is of limited value. See id. at 1:23-25 (“[T]hese services may have different effects on P.s’ Mtn. for Summary Judgment - 16 Case No. 2:18-cv-00743-RAJ Pacific Legal Foundation 10940 NE 33rd Pl., Suite 210 Bellevue, Washington 98004 (425) 576-0484 1 markets depending on the scarcity of housing supply.”). The ban therefore lacks any logical 2 connection to the City’s interests in understanding rental bidding. Like the self-defeating labeling 3 law in Rubin, the moratorium in fact stymies those interests. 4 A city staff memo raised a third possible rationale for the ban not directly related to fact- 5 finding: “to give the City time to create a regulatory framework if necessary before use of such 6 services proliferates.” Exhibit 3 at 1 (emphasis added). The City offers no reason to believe that 7 imposing a “regulatory framework” will be substantially more difficult if these websites already 8 have a presence in the Seattle market. But more important, this interest hinges on a nonexistent 9 finding of harm, which in turn depends on the studies that the ban itself undermines. The 10 presumption of harm evident in the City’s reflexive approach to regulation clashes with the 11 fundamental notion that speech restrictions “should be the government’s tool of last resort.” Valle 12 Del Sol, 709 F.3d at 826; see also Edenfield, 507 U.S. at 777 (The Supreme Court has an 13 unforgiving approach “to the use of preventative rules in the First Amendment context.”). 14 15 3. The website ban is underinclusive because it does not ban bidding in the residential rental market in general 16 A speech regulation also runs afoul of the advancement step of Central Hudson if it is 17 underinclusive. Valle Del Sol, 709 F.3d at 824. Underinclusivity arises when a regulation reaches 18 only a subset of the speech that causes the alleged harm, such that the regulation fails to achieve 19 its purported goal or makes irrational distinctions between regulated and unregulated speech. 20 Metro Lights, 551 F.3d at 906. A classic example of an underinclusive commercial speech 21 restriction arose in City of Cincinnati v. Discovery Network, 507 U.S. 410 (1993). To reduce clutter 22 and eye sores, Cincinnati prohibited commercial handbills in news racks on public property but 23 allowed noncommercial handbills. Id. at 412. The distinction between commercial and 24 noncommercial handbills bore no relationship to the city’s interests, since both types of handbill 25 contributed equally to the proliferation of news racks. Id. at 425. The restriction thus lacked the 26 required “fit between its goals and its chosen means” because the distinction drawn between 27 commercial and noncommercial handbills “has absolutely no bearing on the interests [Cincinnati] P.s’ Mtn. for Summary Judgment - 17 Case No. 2:18-cv-00743-RAJ Pacific Legal Foundation 10940 NE 33rd Pl., Suite 210 Bellevue, Washington 98004 (425) 576-0484 1 has asserted.” Id. at 428. The Supreme Court encountered another underinclusive law in Rubin, 2 the law prohibiting alcohol content on beer labels ostensibly to curtail strength wars. Rubin, 514 3 U.S. at 487-88. The law was underinclusive in several respects: it did not prevent brewers from 4 disclosing alcohol content in advertisements, did not apply to distilled spirits, and did not preclude 5 brewers from using descriptive terms to boast about alcohol strength. Id. at 488-89. The resulting 6 gap in the regulatory scheme “makes no rational sense if the Government’s true aim is to suppress 7 strength wars.” Id. at 488. The law therefore failed the direct advancement test. Id. at 491. 8 The website ban is likewise underinclusive because it targets only specific bidding forums. 9 It does not, for example, prohibit a landlord from posting an ad on Craigslist that states: “Monthly 10 rent will be based on the highest bid offer among qualified applicants. Please submit bids by 11 email.” Nor would it prevent prospective tenants from countering the landlord’s advertised rent by 12 simply calling the landlord or meeting in person to offer a bid. These other bidding activities, 13 however, pose the same alleged concerns as rental bidding platforms and lack the transparency 14 offered by bidding sites like Rentberry. Thus, the distinction between bidding behavior in other 15 contexts and rental bidding websites has no bearing on the interests asserted by the City. Like the 16 underinclusive handbill law in Discovery Network and the labeling law in Rubin, the moratorium 17 targets only one forum in which the speech at issue occurs. This myopic focus “makes no rational 18 sense if the Government’s true aim” is to address rental bidding. See Rubin, 514 U.S. at 491. c. 19 The website ban is more extensive than necessary 20 This final prong of the Central Hudson test addresses the “fit between the legislature’s ends 21 and the means chosen to accomplish those ends.” Lorillard Tobacco, 533 U.S. at 556 (quoting 22 Florida Bar v. Went For It, Inc., 515 U.S. 618, 632 (1995)). The means must be “narrowly tailored 23 to achieve the desired objective.” Id. A preemptive ban on speech—with no evidence of harm—is 24 more extensive than necessary because less restrictive means exist and because the moratorium 25 extends to speech that does not relate to the government’s interests. 26 /// 27 P.s’ Mtn. for Summary Judgment - 18 Case No. 2:18-cv-00743-RAJ Pacific Legal Foundation 10940 NE 33rd Pl., Suite 210 Bellevue, Washington 98004 (425) 576-0484 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 1. The City has less restrictive alternatives While the commercial speech test does not require the government to adopt the least restrictive means to accomplish its interest, the availability of less restrictive alternatives indicates that a law is more extensive than necessary. See Rubin, 514 U.S. at 491 (“We agree that the availability of these options, all of which could advance the Government’s asserted interest in a manner less intrusive to respondent’s First Amendment rights, indicates that § 205(e)(2) is more extensive than necessary.”). For example, in 44 Liquormart, Inc. v. Rhode Island, the state banned advertising liquor prices in order to encourage temperance. 517 U.S. at 507. Rhode Island argued that a price advertising ban promoted this goal because the ban would mitigate competition and thereby maintain high prices. Id. at 505. The Supreme Court, however, held that the ban was more extensive than necessary because less restrictive means to inflate alcohol prices existed—namely to increase taxes on alcohol. Id. at 507. Like in 44 Liquormart, Seattle wants to influence the cost of a product (housing) within its jurisdiction. The only difference is that Seattle wishes to reduce rather than inflate those prices. As the Supreme Court noted in 44 Liquormart, there are many ways to control price for a product that do not involve speech restrictions. For example, Seattle could influence housing prices by offering subsidies or other incentives to developers to increase the supply or by subsidizing renters below a certain income level. Seattle is already engaged in non-speech-restrictive efforts to lower the cost of housing, such as the Multifamily Tax Exemption that creates incentives to provide low-income housing. See SMC § 5.73. Such alternatives do not restrict speech and offer a more direct route to addressing housing costs. Hence, the moratorium is more extensive than necessary given these alternatives. 2. The website ban is overinclusive A speech restriction will fail if it is either seriously underinclusive or overinclusive. Valle Del Sol, 709 F.3d at 823-24, 828. For instance, in Lorillard Tobacco Co. v. Reilly, the Supreme Court held that restrictions on outdoor tobacco ads were more extensive than necessary because the restrictions forbade advertising in most metropolitan areas throughout Massachusetts. 533 U.S. at 561-62. The Court held that the “broad sweep” of the ad restrictions indicated that the P.s’ Mtn. for Summary Judgment - 19 Case No. 2:18-cv-00743-RAJ Pacific Legal Foundation 10940 NE 33rd Pl., Suite 210 Bellevue, Washington 98004 (425) 576-0484 1 government “did not carefully calculate the costs and benefits associated with the burden on speech 2 imposed by the regulations.” Id. at 561 (internal quotation marks omitted). The Court also noted 3 that the “range of communications restricted seems unduly broad” because it forbade oral 4 communication about tobacco and smaller signs, neither of which posed a major threat to the 5 government’s interest in public health. Id. at 563. 6 The website ban is overinclusive because it bans speech that does not relate to bidding or 7 otherwise implicate the City’s interests. Since the ban extends to an entire online platform, rather 8 than just the narrow act of bidding, an array of speech on rental bidding websites like Rentberry is 9 forbidden. A landlord such as Wysingle, for example, cannot post advertisements for rental 10 properties on Rentberry’s online platform. Nor can a prospective tenant utilize Rentberry’s search 11 function and search recommendations for housing in Seattle. Landlords like Wysingle cannot use 12 the search function to evaluate the competition. Likewise, tenants and landlords in Seattle cannot 13 use the portal through which landlords and tenants can communicate or make rent payments. None 14 of these website features relate to the City’s interest, yet the moratorium wholly forbids the use of 15 these sites for Seattle properties. As with Lorillard, the City has not carefully balanced the costs 16 and benefits of the website ban. Id. 17 CONCLUSION The website ban strangles speech without any evidence of harm or any attempt to balance 18 19 20 21 the speech interests at stake with the City’s interests. The ban therefore fails both strict and intermediate scrutiny. Plaintiffs’ Motion for Summary Judgment should be granted. /// 22 23 24 25 26 27 P.s’ Mtn. for Summary Judgment - 20 Case No. 2:18-cv-00743-RAJ Pacific Legal Foundation 10940 NE 33rd Pl., Suite 210 Bellevue, Washington 98004 (425) 576-0484 1 DATED: August 17, 2018. 2 Respectfully submitted, 3 4 5 6 7 8 9 By: s/ ETHAN W. BLEVINS By: s/ BRIAN T. HODGES Ethan W. Blevins, WSBA # 48219 Brian T. Hodges, WSBA # 31976 Pacific Legal Foundation 10940 Northeast 33rd Place, Suite 210 Bellevue, Washington 98004 Telephone: (425) 576-0484 Fax: (425) 576-9565 Email: EBlevins@pacificlegal.org Email: BHodges@pacificlegal.org 10 11 12 13 By: s/ WENCONG FA Wencong Fa, California Bar # 301679 ** Pacific Legal Foundation 930 G Street Sacramento, California 95814 Telephone: (916) 419-7111 Fax: (916) 419-7747 Email: WFa@pacificlegal.org By: s/ JAMES M. MANLEY James M. Manley, Arizona Bar # 031820 ** Pacific Legal Foundation 3217 East Shea Blvd., #108 Phoenix, Arizona 85028 Telephone: (916) 288-1405 Email: JManley@pacificlegal.org ** Pro hac vice 14 Attorneys for Plaintiffs 15 16 17 18 19 20 21 22 23 24 25 26 27 P.s’ Mtn. for Summary Judgment - 21 Case No. 2:18-cv-00743-RAJ Pacific Legal Foundation 10940 NE 33rd Pl., Suite 210 Bellevue, Washington 98004 (425) 576-0484 CERTIFICATE OF SERVICE 1 2 I hereby certify that on August 17, 2018, I electronically filed the foregoing MOTION FOR 3 SUMMARY JUDGMENT, EXHIBITS 1-5, and PROPOSED ORDER ON MOTION FOR 4 SUMMARY JUDGMENT with the Clerk of the Court using the CM/ECF system, which will send 5 6 7 notification of such filing to all parties. Dated: August 17, 2018. s/ ETHAN W. BLEVINS Ethan W. Blevins, WSBA # 48219 8 9 Attorney for Plaintiffs 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 P.s’ Mtn. for Summary Judgment - 22 Case No. 2:18-cv-00743-RAJ Pacific Legal Foundation 10940 NE 33rd Pl., Suite 210 Bellevue, Washington 98004 (425) 576-0484