Rentberry is a small San Francisco-based start-up that connects landlords and renters through a website that uses innovative technology to allow users to bid for rental housing. The company hoped to expand its service to Seattle, but, in 2018, the city council adopted a one-year moratorium on rent-bidding websites over unfounded fears that such sites might violate existing rental law and inflate housing costs. Pacific Legal Foundation filed a federal lawsuit on behalf of Rentberry and Delaney Wysingle—a landlord who wants to use the site—arguing the moratorium violates the speech rights of Rentberry, as well as the landlords and tenants who wish to communicate using this innovative technology.
Rentberry’s software speeds up the renting process, boosts transparency, and helps both parties reach an optimal market price. The website also facilitates communication over the course of a rental regarding payments, maintenance requests, etc. They have been successful in other cities and hoped to expand to Seattle, but the city’s moratorium put those plans on hold.
The explicit purpose of the moratorium was to suspend all rent-bidding services while the city investigated their compliance with city housing regulations and how the services affected the Seattle housing market. The obvious problem with the law was that the Seattle could not study what a service it had just outlawed.
Representing Rentberry and Seattle landlord Delaney Wysingle free of charge, Pacific Legal Foundation filed a federal lawsuit challenging Seattle’s moratorium as violating the speech rights of Rentberry, as well as the landlords and renters who would like to use this innovation technology.
The trial court dismissed the lawsuit on the theory that Rentberry and Wysingle had not been injured, and then went on to say that the websites involved only conduct, not speech, so the First Amendment did not apply anyway. Rentberry and Wysingle appealed this decision and, meanwhile, the city extended the moratorium for another year.
Then, on the eve of oral argument in the Ninth Circuit Court of Appeals, Seattle repealed the ban and ordered city departments to study the effect of rental-bidding platforms on the rental housing market, with the intent of using the study results to enact further regulation to limit or prohibit use of the websites.
At Seattle’s request, the Ninth Court dismissed the case as moot, holding that it applied a presumption of “good faith” to the city’s assertion that it would not resume its challenged practices and that Rentberry and Wysingle could not rely on nominal damages—a mandatory form of relief after a constitutional injury in this Circuit–to avoid mootness because they were only implicitly requested via a prayer for “any such further relief that the court deems proper.”
PLF is now asking the U.S. Supreme Court to review the Ninth Circuit decision. PLF is urging the Court to resolve a split among the federal courts as to whether the government is uniquely entitled to a presumption of good faith that it will not resume an unconstitutional course of conduct and whether the federal rules require courts to award nominal damages when plaintiffs prove a constitutional violation.
The case is similar to Uzuegbunam v. Preczewski, a case the Supreme Court will hear later this year. In that case, a student was unconstitutionally prevented from speaking on his public college campus. The college changed its policy before the court ruled and the court dismissed the student’s case as moot. PLF submitted an Amicus Brief arguing that civil rights plaintiffs should be able to receive nominal damages for completed past unconstitutional actions, even if the government later ceases the unconstitutional conduct. Under the Civil Rights Act, an award of nominal damages can justify an award of attorneys’ fees. Defending your civil rights in court shouldn’t rely on your ability to afford expensive lawyers, or your luck in finding lawyers willing to take on your case for free.