homeaway.com, Inc. v. City of Santa Monica

FOR PUBLICATION

UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT

HOMEAWAY.COM, INC.; AIRBNB No. 18-55367
INC.,
Plaintiffs-Appellants, D.C. Nos.
2:16-cv-06641-
v. ODW-AFM
2:16-cv-06645-
CITY OF SANTA MONICA, ODW-AFM
Defendant-Appellee.

HOMEAWAY.COM, INC., No. 18-55805
Plaintiff-Appellant,
D.C. Nos.
and 2:16-cv-06641-
ODW-AFM
AIRBNB INC., 2:16-cv-06645-
Plaintiff, ODW-AFM

v.

CITY OF SANTA MONICA,
Defendant-Appellee.
2 HOMEAWAY.COM V. CITY OF SANTA MONICA

AIRBNB INC., No. 18-55806
Plaintiff-Appellant,
D.C. No.
v. 2:16-cv-06645-
ODW-AFM
CITY OF SANTA MONICA,
Defendant-Appellee. OPINION

Appeal from the United States District Court
for the Central District of California
Otis D. Wright II, District Judge, Presiding

Argued and Submitted October 12, 2018
Pasadena, California

Filed March 13, 2019

Before: Mary M. Schroeder and Jacqueline H. Nguyen,
Circuit Judges, and Michael H. Simon, * District Judge.

Opinion by Judge Nguyen

*
The Honorable Michael H. Simon, United States District Judge for
the District of Oregon, sitting by designation.
 HOMEAWAY.COM V. CITY OF SANTA MONICA 3

SUMMARY **

Civil Rights

The panel affirmed the district court’s dismissal, for
failure to state a claim, of a complaint brought by
HomeAway.com and Airbnb Inc. challenging the City of
Santa Monica’s Ordinance 2535, which imposes various
obligations on companies that host online platforms for
short-term vacation rentals.

The Ordinance, as amended in 2017, imposes four
obligations on hosting platforms: (1) collecting and
remitting Transient Occupancy Taxes; (2) regularly
disclosing listings and booking information to the City; (3)
refraining from booking properties not licensed and listed on
the City’s registry; (4) and refraining from collecting a fee
for ancillary services.

The panel rejected plaintiffs’ assertion that the
Ordinance violated the Communications Decency Act of
1996, 47 U.S.C. § 230 because it required them to monitor
and remove third-party content, and therefore interfered with
federal policy protecting internet companies from liability
for posting third-party content. The panel stated that the
Ordinance prohibits processing transactions for unregistered
properties. It does not require the Platforms to review the
content provided by the hosts of listings on their websites.
Rather, the panel noted that the only monitoring that
appeared necessary in order to comply with the Ordinance

**
This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
4 HOMEAWAY.COM V. CITY OF SANTA MONICA

related to incoming requests to complete a booking
transaction—content that, while resulting from the third-
party listings, was distinct, internal, and nonpublic. The
panel concluded that the Ordinance was not inconsistent
with the Communications Decency Act, and therefore was
not expressly preempted by its terms. The panel further
concluded that the Ordinance would not pose an obstacle to
Congress’s aim to encourage self-monitoring of third-party
content, and therefore obstacle preemption did not preclude
Santa Monica from enforcing the Ordinance.

The panel held that the Ordinance did not implicate
speech protected by the First Amendment, concluding that
the Ordinance’s prohibitions regulate nonexpressive
conduct, specifically booking transactions, and do not single
out those engaged in expressive activity.

COUNSEL

Donald B. Verrilli, Jr. (argued) and Chad Golder, Munger,
Tolles & Olson LLP, Washington, D.C.; Joseph W. Cotchett
and Alexandra P. Summer, Cotchett, Pitre & McCarthy,
LLP, Santa Monica, California; Jonathan H. Blavin and
Joshua Patashnik, Munger, Tolles & Olson LLP, San
Francisco, California; John B. Major, Munger, Tolles &
Olson, Los Angeles, California; for Plaintiff-Appellant
Airbnb, Inc.

Stephen M. Rummage and Ambika K. Doran, Davis Wright
Tremaine LLP, Seattle, Washington, for Plaintiff-Appellant
HomeAway.com, Inc.

George S. Cardona (argued), Deputy City Attorney; Lane
Dilg, City Attorney; Yibin Shen, Chief Deputy City
 HOMEAWAY.COM V. CITY OF SANTA MONICA 5

Attorney; Heidi Von Tongeln and Michael R. Cobden,
Deputy City Attorneys; Santa Monica City Attorney’s
Office, Santa Monica, California, for Defendant-Appellee.

David Salmons, Bryan Killian, and James Nelson, Morgan,
Lewis & Bockius LLP, Washington, D.C., for Amici Curiae
Chris Cox and NetChoice.

Catherine R. Gellis, Esq., Sausalito, California, for Amicus
Curiae Floor64, Inc. d/b/a The Copia Institute.

Ian C. Ballon and Lori Chang, Greenberg Traurig, LLP, Los
Angeles, California, for Amici Curiae Ebay Inc., Glassdoor,
Inc., Lyft, Inc., Offerup, Inc., Taskrabbit, Inc., Thumbtack,
Inc., Uber Technologies, Inc., and Upwork, Inc.

Christi Hogin, Best Best & Krieger LLP, Manhattan Beach,
California, for Amici Curiae League of California Cities,
International Municipal Lawyers Association, and
California State Association of Counties.

Jeremy B. Rosen, Eric S. Boorstin, and Ryan C. Chapman,
Horvitz & Levy LLP, Burbank, California; Michael T.
Williams and Allison R. Mclaughlin, Wheeler Trigg
O’Donnell LLP, Denver, Colorado; David C. Frederick,
Brendan J. Crimmins, and Rachel P. May, Kellogg, Hansen,
Todd, Figel & Frederick, P.L.L.C., Washington, D.C., for
Amicus Curiae Apartment Investment and Management
Company.

Heidi Palutke, Sacramento, California, for Amicus Curiae
California Apartment Association.

Edward M. Schulman, Ballston Tower, Arlington, Virginia,
for Amicus Curiae AvalonBay Communities, Inc.
6 HOMEAWAY.COM V. CITY OF SANTA MONICA

Gary S. Kessler, Kulik Gottesman Siegel & Ware LLP,
Sherman Oaks, California, for Amicus Curiae Community
Associations Institute.

Abbey R. Stemler and Matthew C. Turk, Indiana University
Kelley School of Business, Bloomington, Indiana; Jahan C.
Sagafi and Relic Sun, Outten & Golden LLP, San Francisco,
California; Peter Romer-Friedman, Outten & Golden LLP,
Washington, D.C., for Amici Curiae Internet, Business, and
Local Government Law Professors.

Richard G. McCracken and Paul L. More, McCracken,
Stemerman & Holsberry, LLP, San Francisco, California,
for Amicus Curiae UNITE HERE International Union.

Dennis J. Herrera, San Francisco City Attorney; Christine
Van Aken, Chief of Appellate Litigation; Yvonne R. Meré,
Chief of Complex and Affirmative Litigation; Sara J.
Eisenberg, Deputy City Attorney; San Francisco, California
for Amicus Curiae City and County of San Francisco.

Karl A. Racine, Attorney General for the District of
Columbia, Washington, D.C., for Amicus Curiae District of
Columbia.

Andre M. Davis, City Solicitor, City of Baltimore,
Baltimore, Maryland, for Amicus Curiae Mayor and City
Council of Baltimore.

Zach Klein, Columbus City Attorney, Columbus, Ohio, for
Amicus Curiae City of Columbus.

Barbara J. Parker, Oakland City Attorney; Maria Bee,
Special Counsel; Erin Bernstein, Supervising Deputy City
 HOMEAWAY.COM V. CITY OF SANTA MONICA 7

Attorney; Oakland, California; for Amicus Curiae City of
Oakland.

Peter S. Holmes, Seattle City Attorney, Seattle, Washington,
for Amicus Curiae City of Seattle.

Jill E. Habig, Founder & President; Joanna Pearl, Legal
Director; Oakland, California; for Amicus Curiae Public
Rights Project, A Project of Tides Center.

OPINION

NGUYEN, Circuit Judge:

Located on the coast of Southern California, the city of
Santa Monica consists of only about eight square miles but
serves 90,000 residents and as many as 500,000 visitors on
weekends and holidays. Similar to other popular tourist
destinations, Santa Monica is struggling to manage the
disruptions brought about by the rise of short-term rentals
facilitated by innovative startups such as Appellants
HomeAway.com, Inc. and Airbnb Inc. (the “Platforms”).
Websites like those operated by the Platforms are essentially
online marketplaces that allow “guests” seeking
accommodations and “hosts” offering accommodations to
connect and enter into rental agreements with one another. 1
As of February 2018, Airbnb had approximately 1,400
listings in Santa Monica, of which about 30 percent are in

1
The Platforms do not own, lease, or manage any of the properties
listed on their websites, nor are they parties to the rental agreements.
Instead, the content provided alongside the listings—such as description,
price, and availability—are provided by the hosts. For their services, the
Platforms collect a fee from each successful booking.
8 HOMEAWAY.COM V. CITY OF SANTA MONICA

the “coastal zone” covered by the California Coastal Act,
while HomeAway.com had approximately 300 live listings
in Santa Monica, of which approximately 40 percent are in
the coastal zone.

Santa Monica’s council reported that the proliferation of
short-term rentals had negatively impacted the quality and
character of its neighborhoods by “bringing commercial
activity and removing residential housing stock from the
market” at a time when California is already suffering from
severe housing shortages. In response, the city passed an
ordinance regulating the short-term vacation rental market
by authorizing licensed “home-sharing” (rentals where
residents remain on-site with guests) but prohibiting all other
short-term home rentals of 30 consecutive days or less.

]The Platforms filed suit, alleging that the city ordinance
is preempted by the Communications Decency Act and
impermissibly infringes upon their First Amendment rights.
The district court denied preliminary injunctive relief, and
dismissed the Platforms’ complaints for failure to state a
claim under the Communications Decency Act and the First
Amendment. We affirm.

BACKGROUND

In May 2015, Santa Monica passed its initial ordinance
regulating the short-term vacation rental market by
authorizing licensed “home-sharing” (rentals where
residents remain on-site with guests) but prohibiting all other
forms of short-term rentals for 30 consecutive days or less.
Santa Monica Ordinance 2484 (May 12, 2015), codified as
amended, Santa Monica Mun. Code §§ 6.20.010–6.20.100.
The ordinance reflected the city’s housing goals of
“preserving its housing stock and preserving the quality and
character of its existing single and multi-family residential
 HOMEAWAY.COM V. CITY OF SANTA MONICA 9

neighborhoods.” Id. As originally enacted, the ordinance
prohibited hosting platforms from acting to “undertake,
maintain, authorize, aid, facilitate or advertise any Home-
Sharing activity” that was not authorized by the city.
Hosting platforms also were required to collect and remit
taxes, and to regularly disclose listings and booking
information to the city.

The Platforms each filed a complaint in the Central
District of California challenging the initial ordinance, and
the district court consolidated the cases for discovery and
pretrial matters. On September 21, 2016, the parties
stipulated to stay the case while the city considered
amendments to the local ordinance. During the stay period,
the district court for the Northern District of California
denied a preliminary injunction requested by the plaintiffs in
a separate case challenging a similar ordinance in San
Francisco. See Airbnb Inc. v. City & County of San
Francisco, 217 F. Supp. 3d 1066 (N.D. Cal. 2016). That
case ended in a settlement in which the Platforms agreed to
comply with an amended version of San Francisco’s
ordinance that prohibited booking unlawful transactions but
provided a safe harbor wherein any platform that complies
with the responsibilities set out in the Ordinance will be
presumed to be in compliance with the law.

In January 2017, Santa Monica likewise amended its
own ordinance. The version challenged here, Ordinance
2535 (the “Ordinance”), retains its prohibitions on most
types of short-term rentals, with the exception of licensed
home-shares. In addition, the Ordinance imposes four
obligations on hosting platforms directly: (1) collecting and
remitting “Transient Occupancy Taxes,” (2) disclosing
certain listing and booking information regularly,
(3) refraining from completing any booking transaction for
10 HOMEAWAY.COM V. CITY OF SANTA MONICA

properties not licensed and listed on the City’s registry, and
(4) refraining from collecting or receiving a fee for
“facilitating or providing services ancillary to a vacation
rental or unregistered home-share.” If a housing platform
operates in compliance with these obligations, the Ordinance
provides a safe harbor by presuming the platform to be in
compliance with the law. Otherwise, violations are
punishable by a fine of up to $500 and/or imprisonment for
up to six months.

After the district court lifted the stay, the Platforms
amended their complaint to challenge the revised ordinance
and moved for a preliminary injunction. Santa Monica
moved to dismiss the amended complaint. The court denied
the Platforms’ motion for preliminary injunctive relief and
subsequently granted Santa Monica’s motion to dismiss on
the ground that the Platforms failed to state a claim under
federal law, including the Communications Decency Act of
1996 and the First Amendment. The district court also
declined to exercise supplemental jurisdiction over their
remaining state-law claims. 2 The Platforms timely appealed
these decisions, and we consolidated the appeals.

2
The Platforms do not appeal the district court’s dismissal of other
federal claims brought under the Fourth Amendment and the Stored
Communications Act. Similarly, they do not challenge the court’s
decision not to exercise supplemental jurisdiction over the state-law
claims under the California Coastal Act if we affirm the dismissal of their
federal claims. Because we affirm the district court’s dismissal, we need
not consider the state-law claims. We deny Santa Monica’s motion for
judicial notice of its prior enforcement actions because the dispute as to
its prior actions relates only to the state-law claims.
 HOMEAWAY.COM V. CITY OF SANTA MONICA 11

JURISDICTION AND STANDARD OF REVIEW

We have jurisdiction under 28 U.S.C. § 1291. We
review the district court’s order of dismissal de novo,
“accepting all factual allegations in the complaint as true and
construing them in the light most favorable to the
nonmoving party.” Yagman v. Garcetti, 852 F.3d 859, 863
(2017) (quoting Ebner v. Fresh, Inc., 838 F.3d 958, 962 (9th
Cir. 2016)).

DISCUSSION

I. Communications Decency Act

The Communications Decency Act of 1996 (“CDA” or
the “Act”), 47 U.S.C. § 230, provides internet companies
with immunity from certain claims in furtherance of its
stated policy “to promote the continued development of the
Internet and other interactive computer services.” Id.
§ 230(b)(1). Construing this immunity broadly, the
Platforms argue that the Ordinance requires them to monitor
and remove third-party content, and therefore violates the
CDA by interfering with federal policy protecting internet
companies from liability for posting third-party content.
Santa Monica, on the other hand, argues that the Ordinance
does not implicate the CDA because it imposes no obligation
on the Platforms to monitor or edit any listings provided by
hosts. Santa Monica contends that the Ordinance is simply
an exercise of its right to enact regulations to preserve
housing by curtailing “incentives for landlords to evade rent
control laws, evict tenants, and convert residential units into
de facto hotels.”

We begin our analysis with the text of the CDA. See BP
America Prod. Co. v. Burton, 549 U.S. 84, 91 (2006).
Section 230(c)(1) states that “[n]o provider or user of an
12 HOMEAWAY.COM V. CITY OF SANTA MONICA

interactive computer service shall be treated as the publisher
or speaker of any information provided by another
information content provider.” Id. § 230(c)(1). The CDA
explicitly preempts inconsistent state laws: “Nothing in this
section shall be construed to prevent any State from
enforcing any State law that is consistent with this section.
No cause of action may be brought and no liability may be
imposed under any State or local law that is inconsistent with
this section.” Id. § 230(e)(3).

We have construed these provisions to extend immunity
to “(1) a provider or user of an interactive computer service
(2) whom a plaintiff seeks to treat, under a state law cause of
action, as a publisher or speaker (3) of information provided
by another information content provider.” Barnes v. Yahoo!,
Inc., 570 F.3d 1096, 1100–01 (9th Cir. 2009). Only the
second element is at issue here: whether the Ordinance treats
the Platforms as a “publisher or speaker” in a manner that is
barred by the CDA. Although the CDA does not define
“publisher,” we have defined “publication” in this context to
“involve[] reviewing, editing, and deciding whether to
publish or to withdraw from publication third-party
content.” Id. at 1102 (citing Fair Hous. Council v.
Roommates.com, LLC, 521 F.3d 1157, 1170–71 (9th Cir.
2008) (en banc)).

The Platforms offer two different theories as to how the
Ordinance in fact reaches “publication” activities. First, the
Platforms claim that the Ordinance is expressly preempted
by the CDA because, as they argue, it implicitly requires
them “to monitor the content of a third-party listing and
compare it against the City’s short-term rental registry
before allowing any booking to proceed.” Relying on Doe
v. Internet Brands, 824 F.3d 846, 851 (9th Cir. 2016), the
Platforms take the view that CDA immunity follows
 HOMEAWAY.COM V. CITY OF SANTA MONICA 13

whenever a legal duty “affects” how an internet company
“monitors” a website.

However, the Platforms read Internet Brands too
broadly. In that case, two individuals used the defendant’s
website to message and lure the plaintiff to sham auditions
where she was drugged and raped. Id. at 848. We held that,
where the website provider was alleged to have known
independently of the ongoing scheme beforehand, the CDA
did not bar an action under state law for failure to warn. Id.
at 854. We observed that a duty to warn would not
“otherwise affect how [the defendant] publishes or
monitors” user content. Id. at 851. Though the defendant
did, in its business, act as a publisher of third-party content,
the underlying legal duty at issue did not seek to hold the
defendant liable as a “publisher or speaker” of third-party
content. Id. at 853; see 47 U.S.C. § 230(c)(1). We therefore
declined to extend CDA immunity to the defendant for the
plaintiff’s failure-to-warn claim. Internet Brands, 824 F.3d
at 854.

We do not read Internet Brands to suggest that CDA
immunity attaches any time a legal duty might lead a
company to respond with monitoring or other publication
activities. It is not enough that third-party content is
involved; Internet Brands rejected use of a “but-for” test that
would provide immunity under the CDA solely because a
cause of action would not otherwise have accrued but for the
third-party content. Id. at 853. We look instead to what the
duty at issue actually requires: specifically, whether the duty
would necessarily require an internet company to monitor
third-party content. See id. at 851, 853.

Here, the Ordinance does not require the Platforms to
monitor third-party content and thus falls outside of the
CDA’s immunity. The Ordinance prohibits processing
14 HOMEAWAY.COM V. CITY OF SANTA MONICA

transactions for unregistered properties. It does not require
the Platforms to review the content provided by the hosts of
listings on their websites. Rather, the only monitoring that
appears necessary in order to comply with the Ordinance
relates to incoming requests to complete a booking
transaction—content that, while resulting from the third-
party listings, is distinct, internal, and nonpublic. As in
Internet Brands, it is not enough that the third-party listings
are a “but-for” cause of such internal monitoring. See
824 F.3d at 853. The text of the CDA is “clear that neither
this subsection nor any other declares a general immunity
from liability deriving from third-party content.” Barnes,
570 F.3d at 1100. To provide broad immunity “every time a
website uses data initially obtained from third parties would
eviscerate [the CDA].” Barnes, 570 F.3d at 1100 (quoting
Roommates.com, 521 F.3d at 1171 (9th Cir. 2008) (en
banc)). That is not the result that Congress intended.

Nor could a duty to cross-reference bookings against
Santa Monica’s property registry give rise to CDA
immunity. While keeping track of the city’s registry is
“monitoring” third-party content in the most basic sense,
such conduct cannot be fairly classified as “publication” of
third-party content. The Platforms have no editorial control
over the registry whatsoever. As with tax regulations or
criminal statutes, the Ordinance can fairly charge parties
with keeping abreast of the law without running afoul of the
CDA.

Second, the Platforms argue that the Ordinance “in
operation and effect . . . forces [them] to remove third-party
content.” Although it is clear that the Ordinance does not
expressly mandate that they do so, the Platforms claim that
“common sense explains” that they cannot “leave in place a
website chock-full of un-bookable listings.” For purposes of
 HOMEAWAY.COM V. CITY OF SANTA MONICA 15

our review, we accept at face value the Platforms’ assertion
that they will choose to remove noncompliant third-party
listings on their website as a consequence of the Ordinance. 3
Nonetheless, their choice to remove listings is insufficient to
implicate the CDA.

On its face, the Ordinance does not proscribe, mandate,
or even discuss the content of the listings that the Platforms
display on their websites. See Santa Monica Mun. Code
§§ 6.20.010–6.20.100. It requires only that transactions
involve licensed properties. We acknowledge that, as the
Platforms explain in Airbnb’s complaint and in the briefing
on appeal, removal of these listings would be the best option
“from a business standpoint.” But, as in Internet Brands, the
underlying duty “could have been satisfied without changes
to content posted by the website’s users.” See 824 F.3d
at 851. Even assuming that removing certain listings may be
the Platforms’ most practical compliance option, allowing
internet companies to claim CDA immunity under these
circumstances would risk exempting them from most local
regulations and would, as this court feared in
Roommates.com, 521 F.3d at 1164, “create a lawless no-
man’s-land on the Internet.” We hold that the Ordinance is
not “inconsistent” with the CDA, and is therefore not
expressly preempted by its terms. See 47 U.S.C. § 230(e)(3).

Finally, the Platforms argue that, even if the Ordinance
is not expressly preempted by the CDA, the Ordinance
imposes “an obstacle to the accomplishment and execution
3
The Platforms argued below that the district court must accept as
true their allegation that they would “have to” monitor and screen
listings. As a matter of law, the Ordinance does not require them to do
so. Courts are “not bound to accept as true a legal conclusion couched
as a factual allegation.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544,
555 (2007) (quoting Papasan v. Allain, 478 U.S. 265, 286 (1986)).
16 HOMEAWAY.COM V. CITY OF SANTA MONICA

of the full purposes and objectives of Congress.” See Crosby
v. Nat’l Foreign Trade Council, 530 U.S. 363, 372–73
(2000). Reading the CDA expansively, they argue that the
Ordinance conflicts with the CDA’s goal “to preserve the
vibrant and competitive free market that presently exists for
the Internet . . . unfettered by Federal or State regulation.”
See § 230(b)(2). We have consistently eschewed an
expansive reading of the statute that would render unlawful
conduct “magically . . . lawful when [conducted] online,”
and therefore “giv[ing] online businesses an unfair
advantage over their real-world counterparts.” See
Roommates.com, 521 F.3d at 1164, 1164–65 n.15. For the
same reasons, while we acknowledge the Platforms’
concerns about the difficulties of complying with numerous
state and local regulations, the CDA does not provide
internet companies with a one-size-fits-all body of law. Like
their brick-and-mortar counterparts, internet companies
must also comply with any number of local regulations
concerning, for example, employment, tax, or zoning.
Because the Ordinance would not pose an obstacle to
Congress’s aim to encourage self-monitoring of third-party
content, we hold that obstacle preemption does not preclude
Santa Monica from enforcing the Ordinance.

Fundamentally, the parties dispute how broadly to
construe the CDA so as to continue serving the purposes
Congress envisioned while allowing state and local
governments breathing room to address the pressing issues
faced by their communities. We have previously
acknowledged that the CDA’s immunity reaches beyond the
initial state court decision that sparked its enactment. See
Fair Hous. Council v. Roommates.com, LLC, 521 F.3d 1157,
1163 (9th Cir. 2008) (en banc) (discussing Stratton
Oakmont, Inc. v. Prodigy Servs. Co., which held an internet
company liable for defamation when it removed some, but
 HOMEAWAY.COM V. CITY OF SANTA MONICA 17

not all, harmful content from its public message boards,
1995 WL 323710 (N.Y. Sup. Ct. May 24, 1995)
(unpublished)). As the Platforms correctly note, the Act’s
policy statements broadly promote “the vibrant and
competitive free market that presently exists for the Internet
. . . unfettered by Federal or State regulation.” See 47 U.S.C.
§ 230(b)(2). “[A] law’s scope often differs from its genesis,”
and we have repeatedly held the scope of immunity to reach
beyond defamation cases. Barnes, 570 F.3d at 1101 (quoting
Chicago Lawyers’ Comm. for Civil Rights Under Law, Inc.
v. Craigslist, Inc., 519 F.3d 666, 671 (7th Cir. 2008), as
amended (May 2, 2008)) (citing cases applying immunity for
causes of action including discrimination, fraud, and
negligence).

At the same time, our cases have hewn closely to the
statutory language of the CDA and have limited the
expansion of its immunity beyond the protection Congress
envisioned. As we have observed, “the [relevant] section is
titled ‘Protection for “good Samaritan” blocking and
screening of offensive material.’” Roommates.com,
521 F.3d at 1163–64 (quoting 47 U.S.C. § 230(c)); see also
Internet Brands, 824 F.3d at 852. Congress intended to
“spare interactive computer services [the] grim choice”
between voluntarily filtering content and being subject to
liability on the one hand, and “ignoring all problematic posts
altogether [to] escape liability.” Roommates.com, 521 F.3d
at 1163–64. In contrast, the Platforms face no liability for
the content of the bookings; rather, any liability arises only
from unlicensed bookings. We do not discount the
Platforms’ concerns about the administrative burdens of
state and local regulations, but we nonetheless disagree that
§ 230(c)(1) of the CDA may be read as broadly as they
advocate, or that we may ourselves expand its provisions
beyond what Congress initially intended.
18 HOMEAWAY.COM V. CITY OF SANTA MONICA

In sum, neither express preemption nor obstacle
preemption apply to the Ordinance. We therefore affirm the
district court’s dismissal for failure to state a claim under the
CDA.

II. First Amendment

The Platforms also contend that the district court erred in
dismissing their First Amendment claims. They argue that,
even if the plain language of the Ordinance only reaches
“conduct,” i.e., booking unlicensed properties, the law
effectively imposes a “content-based financial burden” on
commercial speech and is thus subject to First Amendment
scrutiny. The district court concluded that the Ordinance
“regulates conduct, not speech, and that the conduct banned
. . . does not have such a ‘significant expressive element’ as
to draw First Amendment protection.” We agree.

That the Ordinance regulates “conduct” is not alone
dispositive. The Supreme Court has previously applied First
Amendment scrutiny when “‘speech’ and ‘nonspeech’
elements are combined in the same course of conduct.” See
United States v. O’Brien, 391 U.S. 367, 376 (1968). But
“restrictions on protected expression are distinct from
restrictions on economic activity or, more generally, on
nonexpressive conduct.” Sorrell v. IMS Health Inc.,
564 U.S. 552, 567 (2011). While the former is entitled to
protection, “the First Amendment does not prevent
restrictions directed at commerce or conduct from imposing
incidental burdens on speech.” Id.

To determine whether the First Amendment applies, we
must first ask the “threshold question [of] whether conduct
with a ‘significant expressive element’ drew the legal
remedy or the ordinance has the inevitable effect of ‘singling
out those engaged in expressive activity.’” Int’l Franchise
 HOMEAWAY.COM V. CITY OF SANTA MONICA 19

Ass’n v. City of Seattle, 803 F.3d 389, 408 (9th Cir. 2015)
(quoting Arcara v. Cloud Books, Inc., 478 U.S. 697, 706–07
(1986)). A court may consider the “inevitable effect of a
statute on its face,” as well as a statute’s “stated purpose.”
Sorrell, 564 U.S. at 565. However, absent narrow
circumstances, a court may not conduct an inquiry into
legislative purpose or motive beyond what is stated within
the statute itself. See O’Brien, 391 U.S. at 383 n.30.
Because the conduct at issue—completing booking
transactions for unlawful rentals—consists only of
nonspeech, nonexpressive conduct, we hold that the
Ordinance does not implicate the First Amendment.

First, the prohibitions here did not target conduct with “a
significant expressive element.” See Arcara, 478 U.S.
at 706. Our decision in International Franchise Ass’n is
analogous. There, the plaintiff challenged a minimum wage
ordinance that would have accelerated the raising of the
minimum wage to $15 per hour for franchise owners and
other large employers. 803 F.3d at 389. In denying a
preliminary injunction, the district court held that the
plaintiffs were not likely to succeed on their First
Amendment argument that the ordinance treated them
differently based on their “speech and association” decisions
to operate within a franchise relationship framework. Id. at
408–09. We agreed, concluding that the “business
agreement or business dealings” were not conduct with a
“significant expressive element.” Id. at 408. Instead,
“Seattle’s minimum wage ordinance [was] plainly an
economic regulation that [did] not target speech or
expressive conduct.” Id.

Similarly, here, the Ordinance is plainly a housing and
rental regulation. The “inevitable effect of the [Ordinance]
on its face” is to regulate nonexpressive conduct—namely,
20 HOMEAWAY.COM V. CITY OF SANTA MONICA

booking transactions—not speech. See Sorrell, 564 U.S.
at 565. As in International Franchise Ass’n, the “business
agreement or business dealings” associated with processing
a booking is not conduct with a “significant expressive
element.” See 803 F.3d at 408 (citation and quotation marks
omitted). Contrary to the Platforms’ claim, the Ordinance
does not “require” that they monitor or screen
advertisements. It instead leaves them to decide how best to
comply with the prohibition on booking unlawful
transactions.

Nor can the Platforms rely on the Ordinance’s “stated
purpose” to argue that it intends to regulate speech. The
Ordinance itself makes clear that the City’s “central and
significant goal . . . is preservation of its housing stock and
preserving the quality and nature of residential
neighborhoods.” As such, with respect to the Platforms, the
only inevitable effect, and the stated purpose, of the
Ordinance is to prohibit them from completing booking
transactions for unlawful rentals.

As for the second prong of our inquiry, whether the
Ordinance has the effect of “singling out those engaged in
expressive activity,” Arcara, 478 U.S. at 706–07, we
conclude that it does not. As the Platforms point out,
websites like Craigslist “advertise the very same properties,”
but do not process transactions. Unlike the Platforms, those
websites would not be subject to the Ordinance,
underscoring that the Ordinance does not target websites that
post listings, but rather companies that engage in unlawful
booking transactions.

Moreover, the incidental impacts on speech cited by the
Platforms raise minimal concerns. The Platforms argue that
the Ordinance chills commercial speech, namely,
advertisements for third-party rentals. But even accepting
 HOMEAWAY.COM V. CITY OF SANTA MONICA 21

that the Platforms will need to engage in efforts to validate
transactions before completing them, incidental burdens like
these are not always sufficient to trigger First Amendment
scrutiny. See Int’l Franchise Ass’n, 803 F.3d at 408
(“[S]ubjecting every incidental impact on speech to First
Amendment scrutiny ‘would lead to the absurd result that
any government action that had some conceivable speech
inhibiting consequences . . . would require analysis under
the First Amendment.’” (quoting Arcara, 478 U.S. at 708
(O’Connor, J., concurring))). Furthermore, to the extent that
the speech chilled advertises unlawful rentals, “[a]ny First
Amendment interest . . . is altogether absent when the
commercial activity itself is illegal and the restriction on
advertising is incidental to a valid limitation on economic
activity.” See Pittsburgh Press Co. v. Pittsburgh Comm’n
on Human Relations, 413 U.S. 376, 389 (1973).

Finally, because the Ordinance does not implicate speech
protected by the First Amendment, we similarly reject the
Platforms’ argument that the Ordinance is unconstitutional
without a scienter requirement. In most cases, there is no
“closed definition” on when a criminal statute must contain
a scienter requirement. See Morissette v. United States,
342 U.S. 246, 260 (1952). However, the Supreme Court has
drawn a bright line in certain contexts, such as holding that
the First Amendment requires statutes imposing criminal
liability for obscenity or child pornography to contain a
scienter requirement. See New York v. Ferber, 458 U.S. 747,
765 (1982). Such a requirement prevents “a severe
limitation on the public’s access to constitutionally protected
matter” as would result from inflexible laws criminalizing
“bookshops and periodical stands.” Smith v. California,
361 U.S. 147, 153 (1959).
22 HOMEAWAY.COM V. CITY OF SANTA MONICA

Here, even assuming that the Ordinance would lead the
Platforms to voluntarily remove some advertisements for
lawful rentals, there would not be a “severe limitation on the
public’s access” to lawful advertisements, especially
considering the existence of alternative channels like
Craigslist. Id. Such an incidental burden is far from “a
substantial restriction on the freedom of speech” that would
necessitate a scienter requirement. Id. at 150. Otherwise,
“[t]here is no specific constitutional inhibition against
making the distributors of good[s] the strictest censors of
their merchandise.” Id. at 152.

III. Remaining Claims

On appeal, the Platforms do not challenge dismissal of
their other federal law claims “in light of the district court’s
interpretation of the Ordinance as only requiring disclosure
of information pursuant to requests that comply with the
Fourth Amendment and Stored Communications Act.”
Similarly, the parties specified that they would “not
challenge the district court’s decision to decline
supplemental jurisdiction if all the Platforms’ federal claims
were properly dismissed.” Accordingly, we need not
consider the remaining claims.

* * *

Because the district court properly dismissed the
Platforms’ complaints for failure to state a claim, we dismiss
as moot the appeals from the denial of preliminary injunctive
relief.

AFFIRMED in part, DISMISSED in part.