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Airbnb, Inc. v. City of N.Y. - 373 F. Supp. 3d 467 (S.D.N.Y. 2019)

Rule:

To justify a preliminary injunction, a movant must ordinarily demonstrate: (1) irreparable harm absent injunctive relief; (2) either a likelihood of success on the merits, or a serious question going to the merits to make them a fair ground for trial, with a balance of hardships tipping decidedly in the plaintiff's favor; and (3) that the public's interest weighs in favor of granting an injunction. However, where a preliminary injunction is sought against government action taken in the public interest pursuant to a statutory or regulatory scheme, the alternative showing as to the second, likelihood-of-success, element is unavailable. Instead, to secure a preliminary injunction, the movant must show a likelihood of success on the merits.

Facts:

Plaintiffs Airbnb, Inc. (“Airbnb”) and HomeAway, Inc. (“HomeAway”) were home-sharing services that provided an online marketplace for short-and long-term lodging, in which hosts lease or sublease their living space to guests. In an effort to crack down on short-term rentals that violated multiple dwelling laws and related regulations, the New York City Council approved an ordinance that would require Airbnb and HomeAway to turn over voluminous data regarding customers who used their platforms. The Ordinance required the booking services to turn over the body of information with respect to each listing regardless of whether there was any reason to suspect that the listing, or the associated host, was violating the law. Non-compliant booking services were liable for a civil penalty. Citing irreparable harm, Airbnb and HomeAway filed a motion against defendant City of New York, seeking to enjoin the enforcement of the Ordinance. Plaintiffs contented that the Ordinance violated the First and Fourth Amendments of the United States Constitution and conflicted with the Stored Communications Act, 18 U.S.C. §§ 2701 et seq.

Issue:

Under the circumstances, were plaintiffs Airbnb and HomeAway entitled to the grant of preliminary injunction against the enforcement of a New York City ordinance requiring the to provide data on customers who used plaintiffs' platforms to advertise short-term rentals?

Answer:

Yes.

Conclusion:

Looking first to the typical three-prong test, the District Court noted that in order to secure a preliminary injunction sought against government action taken in the public interest pursuant to a statutory or regulatory scheme, the movant must show a likelihood of success on the merits. To establish a likelihood of success, plaintiffs “need not show that success was an absolute certainty.” The Court held that Airbnb and HomeAway showed a likelihood of success on the merits, and thereby granted them preliminary injunction to enjoin the enforcement of the city Ordinance. The Court averred that the Ordinance implicated the Fourth Amendment, as it has put in place a search and seizure regime that implicated protected privacy interests of the booking services whose user records must be produced monthly. According to the Court, Airbnb and HomeAway would likely succeed in invalidating the Ordinance as unreasonable under the Fourth Amendment because the same lacked a mechanism for pre-compliance review by a neutral of its monthly command that booking services produce their New York City user records. Even if this facial injunctive action were treated as pre-compliance review, the City had not justified its sweeping capture of constitutionally protected records. As such, denial of a preliminary injunction likely would result in the continuous violation of plaintiffs' Fourth Amendment rights. The Court also considered other injunctive factors, and held that plaintiffs would likely suffer irreparable harm in the absence of preliminary relief, and that the issuance of a preliminary injunction would serve the public interest. Having concluded that Airbnb and HomeAway were likely to prevail on their Fourth Amendment challenge to the Ordinance, the Court elected not to address the First Amendment question at length. The Court also said that it was not prepared to conclude that plaintiffs were likely to prevail on the merits of their facial challenge under the Stored Communications Act.

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