Judge strikes down “first in time” tenant protection law

Today King County Superior Court Judge Suzanne Parisien issued a ruling striking down the city’s “first in time” tenant protection ordinance.

Here’s my previous summary of the ordinance, and my analysis of the lawsuit when it was filed.

The judge’s ruling doesn’t explore much new territory; largely it applies the ruling from a Washington Supreme Court case, Manufactured Housing vs. State,  cited by the plaintiffs (and Judge Parisien) as binding precedent.

The judge agreed with the plaintiffs on all three major issues they raised:

1. The ability of a landlord to choose a tenant is a fundamental property right,  protected by Article I Section 16 of the Washington State Constitution, as is the ability to negotiate with a prospective tenant. The city’s prohibitions on those activities are thus an illegal government “taking” for which the landlords are not compensated.  Further, they are a taking for “private use” (the tenant’s use), which is also prohibited by Article I Section 16.  The judge drew a clear distinction between a “public use” and a “private use” that offers a public benefit such as reducing implicit bias in the housing rental market; the former is sometimes allowed; the latter is clearly unconstitutional.
2. The ordinance violates due process guarantees, which laws may do only under certain cases. Courts apply a three-part test for whether a due process violation is justified:
   – Is a regulation aimed at achieving a legitimate public purpose?
   – Does the regulation use means reasonably necessary to achieving that purpose?
   – Is the regulation unduly oppressive?
   The judge found that the regulation is aimed at a legitimate public purpose, but does not use “means reasonably necessary.” She wrote, “The principle that government can eliminate ordinary discretion because of the possibility that some people may have unconscious biases has no limiting principle — it would expand the police power beyond reasonable bounds. While the City can regulate the use of property so as not to injure others, a law that undertakes to abolish or limit the exercise of rights beyond what is necessary to provide for the public welfare cannot be included in the lawful police power of the government… Moreover, a law is not reasonably necessary if its rationale and methodology have no meaningful limiting principle.” She also found it to be overbroad, and unduly oppressive because “it severely restricts innocent business practices and bypasses less oppressive alternatives for addressing unconscious bias.”
3. The ordinance violates protections on commercial speech, since it dictates how a landlord must advertise a unit (a landlord could not post an add that says “call to learn how to apply” or “email me for further details.” Government restrictions on protected speech are subject to “intermediate scrutiny,” a four-part test:
   – whether the speech is about lawful activity and is not deceptive;
   – whether the government interest at stake is substantial;
   – whether the speech restriction “directly and materially” serves the government’s interest;
   – whether the restriction is “no more extensive than necessary.”
   The judge sided with the city on the second rule: the government’s interest is substantial. But she agreed with the plaintiffs on the other three: the speech is neither unlawful nor deceptive; it does not directly and materially advance the city’s interest in preventing discrimination; and it is not narrowly tailored and restricts more speech than is necessary for the stated goal. The judge’s rationale in finding that the ordinance does not materially and directly advance the city’s goal is particularly devastating to the notion of fighting implicit bias through legislation: citing the U.S. Supreme Court,  she argues, “To satisfy this component of the commercial speech test, the City must offer more than ‘mere speculation and conjecture; rather a government body seeking to sustain a restriction on commercial speech must demonstrate that the harms it recites are real and that its restriction will in fact alleviate them to a material degree’… the City cannot sustain this burden.“  Courts have found that there are two ways to prove discrimination: either prove directly through evidence or testimony that the accused decided to discriminate, or show a “disparate impact” on a group of people that can be connected back to an activity. Implicit biases, by their very nature, will never be connected to specific decisions to discriminate; but in this case the judge is saying that the City didn’t meet the bar of showing a disparate impact on a protected class of people and connecting it back to allowing landlords to choose their own tenants.

The part of the judge’s ruling related to property interests is ripe for appeal, since it relies on the Manufactured Housing case as binding precedent. In that case, the state Supreme Court had majority agreement on the decision but not on the rationale; Judge Parisien spends a fair amount of time justifying her reliance on a “plurality” ruling, but higher courts may not agree. Even if they throw that part out, they would still need to overrule her on the two other issues (due process and commercial free speech) in order for the First in Time ordinance to survive on appeal. Those are pretty long odds. Nevertheless the city is still likely to appeal in order to get further clarity on the law, in case the City Council wants to try again with a rewrite of the ordinance.

This afternoon, a spokesperson for the Seattle City Attorney’s Office said, “We disagree with the court’s ruling, and we’re studying it to determine our next steps.”

Council member Lisa Herbold, who sponsored the First in Time legislation, said this afternoon, “The City Attorney’s office and I disagree with today’s ruling. First in time is good policy that helps landlords screen tenants and avoid claims of fair housing violations. If landlords won’t screen tenants in a way that intentionally addresses bias, we have no recourse but to increase fair housing law enforcement because the reality is that, intentionally or not, far too many landlords are discriminating in the practices they use to select renters.  (I have to look it up, but I think it’s upwards of 40% across several protected classes).  I’d like the City to challenge this ruling in the appellate court.”

As an aside: under the principles in this ruling, the ordinance passed by the City Council last week that places a prohibition on rent-bidding platforms such as Rentberry and Biddwell would likely also be thrown out. It also restricts property rights of landlords to select and negotiate with tenants, and restricts the commercial free speech rights of landlords to advertise. We’ll see if anyone chooses to try their luck in court on that issue, or wait for any appeals of the First in Time ordinance to resolve themselves first.

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