Rentberry asks for preliminary injunction against city moratorium on rent-bidding platforms

Last month, Rentberry sued the City of Seattle over the Council’s moratorium on rent-bidding platforms. Today, it filed a motion for a preliminary injunction blocking the city from implementing the moratorium.

Rentberry used today’s filing to elaborate on its legal argument against the moratorium. Key points it asserts:

  • the moratorium is a constraint on commercial free speech, which violates the First Amendment;
  • according to established case law, it faces the highest level of scrutiny, i.e. “strict scrutiny,” because it is a prior restraint on speech and because it is a content-based restraint;
  • the city hasn’t provided any actual evidence of harm emanating from the use of rent-bidding platforms.  Rather, it says that it wants to spend the next year studying whether there are harms. The closest it comes to asserting a real issue, Rentberry claims, is the suggestion that it violates the city’s “first in time” tenant protect law — which itself was struck down by a judge in March. As such, Rentberry’s rent-bidding site neither misleads the public nor proposes unlawful activity;
  • the moratorium doesn’t facilitate the city’s study of rent-bidding sites;
  • the moratorium doesn’t ban all rent bidding/auctions, only those done through a web site. For example, a live auction, or one done using paper bids, would still be perfectly legal.

There is a major difference of viewpoint between the two parties over exactly what the ordinance bans. Rentberry claims it bans its entire online platform, while in its own filing today the city argues “the Ordinance does not prohibit landlords or tenants from using Rentberry, or any other website; it only prohibits the use of online auctions for properties located in the City.” Here’s what the ordinance actually says:

Landlords and potential tenants are prohibited from using rental housing bidding platforms for real property located in Seattle city limits.

“Rental housing bidding platform” or “platform” means a person that connects potential tenants and landlords via an application based or online platform to facilitate rental housing auctions wherein potential tenants submit competing bids on certain lease provisions including but not limited to housing costs and lease term, to landlords for approval or denial.  Merely publishing a rental housing advertisement does not make a person a rental housing bidding platform.

This was probably not the clearest way to write this, and both sides have a point. If Rentberry were to disable the auction function on its site for units in Seattle, it would not fit the definition of a “rental housing bidding platform.”  On the other hand, if the auction functionality is available, then the ordinance seems to ban the entire site, including all its other functionality. That, Rentberry claims, is another violation of the law since it bans commercial speech that is unrelated to rent-bidding without any justification.

The City of Seattle has until August 6th to file a response to Rentberry’s motion. The judge is expected to rule on the motion in mid-August.