The opinion
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
MELISSA HIGNELL, ET AL. CIVIL ACTION
VERSUS NO. 19-13773
CITY OF NEW ORLEANS SECTION “B”(1)
ORDER AND REASONS
I. NATURE OF THE MOTION AND RELIEF SOUGHT
Before the Court are plaintiffs’ motion for partial summary
judgment (Rec. Doc. 35), defendant City of New Orleans response in
opposition (Rec. Doc. 41), defendant’s motion for summary judgment
(Rec. Doc. 48), defendant’s post-hearing brief (Rec. Doc. 49),
plaintiffs’ post-hearing brief (Rec. Doc. 50), defendant’s
response to plaintiffs’ post-hearing brief (Rec. Doc. 51),
plaintiffs’ response memorandum in support of their motion for
partial summary judgment (Rec. Doc. 52), plaintiffs’ response in
opposition to defendant’s motion for summary judgment (Rec. Doc.
53), plaintiffs’ supplemental memorandum in opposition to
defendant’s motion for summary judgment (Rec. Doc. 62), and
defendant’s supplemental memorandum in support of its motion for
summary judgment (Rec. Doc. 66). Accordingly,
IT IS ORDERED that plaintiffs’ motion for partial summary
judgment (Rec. Doc. 35) is DENIED;
IT IS FURTHER ORDERED that defendant’s motion for summary
judgment (Rec. Doc. 48) is GRANTED.
II. FACTUAL BACKGROUND AND PROCEDURAL HISTORY
Plaintiffs brought the current action on November 22, 2019,
asserting violations of the Commerce Clause, First, Fourth, Fifth,
and Eight Amendments of the United States Constitution, against
defendant City of New Orleans, pursuant to 42 U.S.C. §§ 1983,
1988.1 Rec. Doc. 1 at ¶ 1. On December 16, 2019, the New Orleans
City Council adopted ordinances that amended the City’s
Comprehensive Zoning Ordinance (“CZO”) and City Code to authorize
short term rentals (“STR”). Id. at ¶ 9. The CZO defines an STR as
rental of all or a portion of a residential dwelling unit for a
period of less than thirty consecutive days. Id. at ¶ 9. CZO Art.
26.2; City Code Art. XI, § 26-613, et seq. These ordinances were
effective beginning April 1, 2017. Id. The ordinances have since
been repealed and replaced by ordinances M.C.S. 28,156 and M.C.S.
28,157, which impose rules and regulations regarding STRs in the
New Orleans Area. See Rec. Docs. 6-4 & 6-5. Notably, the new
1 Plaintiff Melissa Hignell is a citizen of Portland, Oregon, and a resident of
New Orleans, Louisiana, who owns a home located at 814 Alvar Street, New Orleans,
Louisiana. Rec. Doc. 1 at ¶ 3. Plaintiff White Spider, LLC, is a limited
liability company doing business in New Orleans, Louisiana that provides
services to STR owners. Id. at ¶ 4. Plaintiff Garett Majou is a citizen of New
Orleans, Louisiana, who owns a home on Soniat Street in New Orleans. Id. at ¶
5. Plaintiffs Bob and Samantha McRaney are citizens of New Orleans, Louisiana,
and own a home on Royal Street in New Orleans. Id. at ¶ 6. Plaintiff Jimmie
Taylor is citizen of New Orleans, Louisiana, who owns homes on St. Anthony
Street and Barracks Street in New Orleans.
ordinances: (1) require all STRs have a permit to operate2; (2)
prohibit all STRs within the French Quarter and Garden District3;
(3) prohibit social or commercial events taking place in STRs4;
(4) require proof of a homestead exemption submitted to the
Department of Safety and Permits, with a homeowner’s ownership
interest being at least 50%5 to qualify for an STR permit; (5)
require homeowners to “keep guest registration records”6 and allow
for a “reasonable inspection[]” of the premises7; and (6) an
assessment of penalties and fines for noncompliance with the
ordinances. Plaintiffs filed a motion for temporary restraining
order and/or preliminary injunction (Rec. Doc. 6) to enjoin
defendant from enforcing M.C.S. 28,156 & M.C.S. 28,157. This Court
denied plaintiffs’ motion for temporary restraining order and/or
preliminary injunction on December 30, 2019. Rec. Doc. 24 (Minute
Order).
Parties subsequently filed above noted motions, etc. A
hearing with oral argument was held on both motions on May 27,
2020, via telephone. Rec. Doc. 68 (minute entry).
2 M.C.S. 28,156 20.3.LLL.1 at p. 15.
3 M.C.S. 28,156 20.3.LLL.1 at p. 16; M.C.S. 28,156 20.3.LLL.4 at p. 19.
4 M.C.S. 28,156 20.3.LLL.3 at p. 18.
5 M.C.S. 28,156 20.3.LLL.3(h) at p. 19.
6 M.C.S. 28,157 § 26-618 (“The owner shall maintain Guest registration records,
which shall contain the actual dates of occupancy, total number of Guests per
party, per stay, and the rate(s) charged. . . records shall be maintained for
three years and shall be provided to the city upon request. . . personally
identifiable Guest information may be redacted.”).
7 M.C.S. 28,157 § 26-618 A(9). M.C.S. 28,157 § 26-624.
III. LAW AND ANALYSIS
a. Fed. R. Civ. P. 56 Summary Judgment
Under Federal Rule of Civil Procedure 56, summary judgment is
appropriate when “the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the
affidavits, if any, show that there is no genuine issue as to any
material fact and that the moving party is entitled to judgment as
a matter of law.” Celotex Corp. v. Catrett, 477 U.S. 317, 322
(1986) (quoting Fed. R. Civ. P. 56(c)). See also TIG Ins. Co. v.
Sedgwick James of Wash., 276 F.3d 754, 759 (5th Cir. 2002). “As to
materiality, the substantive law will identify which facts are
material. Only disputes over facts that might affect the outcome
of the suit under the governing law will properly preclude the
entry of summary judgment.” Anderson v. Liberty Lobby, Inc., 477
U.S. 242, 248 (1986). A genuine issue of material fact exists if
the evidence would allow a reasonable jury to return a verdict for
the non-moving party. Anderson, 477 U.S. at 248. The court should
view all facts and evidence in the light most favorable to the
non-moving party. United Fire & Cas. Co. v. Hixson Bros. Inc., 453
F.3d 283, 285 (5th Cir. 2006). Mere conclusory allegations are
insufficient to defeat summary judgment. Eason v. Thaler, 73 F.3d
1322, 1325 (5th Cir. 1996).
The movant must point to “portions of ‘the pleadings,
depositions, answers to interrogatories, and admissions on file,
together with the affidavits, if any,’ which it believes
demonstrate the absence of a genuine issue of material fact.”
Celotex, 477 U.S. at 323. If and when the movant carries this
burden, the non-movant must then go beyond the pleadings and
present other evidence to establish a genuine issue. Matsushita
Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586
(1986). However, “where the non-movant bears the burden of proof
at trial, the movant may merely point to an absence of evidence,
thus shifting to the non-movant the burden of demonstrating by
competent summary judgment proof that there is an issue of material
fact warranting trial.” Lindsey v. Sears Roebuck & Co., 16 F.3d
616, 618 (5th Cir. 1994). “This court will not assume in the
absence of any proof that the nonmoving party could or would prove
the necessary facts, and will grant summary judgment in any case
where critical evidence is so weak or tenuous on an essential fact
that it could not support a judgment in favor of the [non-movant].”
McCarty v. Hillstone Rest. Grp., 864 F.3d 354, 357 (5th Cir. 2017).
Additionally, “[a] partial summary judgment order is not a
final judgment but is merely a pre-trial adjudication that certain
issues are established for trial of the case.” Streber v. Hunter,
221 F.3d 701, 737 (5th Cir. 2000). Partial summary judgment serves
the purpose of rooting out, narrowing, and focusing the issues for
trial. See Calpetco 1981 v. Marshall Exploration, Inc., 989 F.2d
1408, 1415 (5th Cir. 1993).
b. Fifth Amendment Claim
The takings clause of the Fifth Amendment, made applicable to
the States through the Fourteenth Amendment to the United States
Constitution, states: “nor shall private property be taken for
public use, without just compensation.” U.S. Const. V.; see also
Lingle v. Chevron U.S.A. Inc., 544 U.S. 528, 536 (2005). The Fifth
Circuit has held that to prevail on a takings claim, the plaintiff
“must demonstrate that he has a protectable property interest.”
Dennis Melancon, Inc. v. City of New Orleans, 703 F.3d 262, 269
(5th Cir. 2012). The Fifth Circuit further noted that the
constitution does not create property interest, but rather
protects them. Id. Thus, in order to determine whether a property
interest has been taken, “courts must ‘resort to existing rules or
understandings that stem from an independent source such as state
law’ to define the range of interests that qualify for protection
as ‘property’ under the Fifth and Fourteenth Amendments.’” Id.
(quoting Lucas v. S.C. Coastal Council, 505 U.S. 1003, 1030 (1992).
Further, to have a property interest “‘a person clearly must have
more than an abstract need or desire for it. He must have more
than a unilateral expectation of it. He must, instead, have a
legitimate claim of entitlement to it.’” Id. (quoting Bd. of
Regents of State Colleges v. Roth, 408 U.S. 564, 577 (1972)).
Defendant contends plaintiffs’ assertion that they had a vested
property right in their STR licenses and permits is not supported
by relevant caselaw nor the City’s prior STR ordinances. This Court
agrees.
Defendant cites Dennis Melancon, Inc. v. City of New Orleans
in support of their contention that plaintiffs did not have a
vested property right in their STR permits. Rec. Doc. 48 at 9-10.
In Dennis, the Fifth Circuit vacated the district court’s grant of
a preliminary injunction enjoining the City from enforcing permit
regulations with respect to taxicabs because the taxicab permit
holders “[had] not demonstrated a substantial likelihood of
establishing that [the ordinances] effected a regulatory taking.”
Id. at 272.8 The Court explained that the heavily regulated nature
of the permits and the City’s power to exercise control over those
permits resulted in the permit holders having, if anything, a
“limited bundle of rights” in connection therewith. Id. Further,
the court noted that the permit extended to taxi drivers was “‘in
the nature of a personal privilege or license,’ because it ‘may be
amended or revoked by the power authorized to issue it.’” Id. at
8 Plaintiffs cite to Bowlby v. City of Aberdeen, 681 F.3d 215 (5th Cir. 2012)
for the contention that the STR permit granted by the City constituted a property
interest for a claim under the Fifth Amendment’s takings clause. However, the
Fifth Circuit held that “privileges, licenses, certificates, and franchises .
. . qualify as property interests for the purposes of procedural due process.”
(citing Wells Fargo Armored Serv. Corp. v. Ga. Pub. Serv. Comm’n, 547 F.2d 938,
941 (5th Cir. 1977)(emphasis added). In that case the plaintiff’s Fifth
Amendment claim was dismissed and not appealed to the Fifth Circuit. Thus, the
case is inapposite in determining whether the license is considered a property
interest with respect to a Fifth Amendment takings claim, and rather applies to
an analysis to determine property interests for due process claims.
273 (quoting State ex rel. Hutton v. City of Baton Rouge, 47 So.
2d 665, 668 (1950)).
Similar to the permits in Melancon and the taxicab industry
in New Orleans, land use and zoning have historically been
extensively regulated. See Schad v. Borough of Mount Ephraim, 452
U.S. 61, 68 (1981)(“The power of local governments to zone and
control land use is undoubtedly broad and its proper exercise is
an essential aspect of achieving a satisfactory quality of life in
both urban and rural communities. But the zoning power is not
infinite and unchallengeable; it ‘must be exercised within
constitutional limits.’”). Further, any reliance on the permits
by plaintiffs’ is unreasonable. The previously enacted ordinances
pertaining to STRs, Sec. 26-616 of M.C.S. 27,204 reads:
The [STR] license permit shall be valid one year from
the date of issuance. Renewal permits shall be issued in
the same manner as initial permits, and requires: (1)
Providing the department an updated copy of any of the
documents required by section 26-614, if applicable. (2)
A revised attestation, indicating continued compliance
with the requirements in section 26-614. (3) A revised
list of [STR] platform(s) that will be utilized to
advertise or solicit the property for use as a [STR].(4)
Proof of payment of all applicable taxes and fees as
required by law.
Rec. Doc. 48-9 at 4-5 (emphasis added). The indication that the
permits are valid for one year and subject to requirements for re-
issuance should not have induced STR owners to suspect that their
permits would automatically renew, but that they would be subject
to the enumerated requirements set forth in the section. Further,
STR permits were defined in the original city ordinances as “a
privilege, not a right” which “may be revoked or not renewed based
on non-compliance with the requirements of the Comprehensive
Zoning Ordinance . . .” Id. at 1, Sec. 26-6139 (emphasis added).
Similarly, defendant has not effectuated a regulatory taking
by revoking the STR permits. The United States Supreme Court has
held that for a regulatory taking to be effectuated, a party must
have “sacrifice[ed] all economically beneficial uses in the name
of the common good” and to “leave his property economically idle.”
Lucas v. S.C. Coastal Council, 505 U.S. 1003, 1019 (1992). Here,
plaintiffs do not have an economically idle investment without the
ability to engage in the STR market. Plaintiffs may reside in these
homes or use the properties as long-term rentals. Alliance for
Neighborhood Prosperity, et al. v. City of New Orleans, No. 19-
11125 (CDC Par. of Orleans, 11/19/19). Further, the argument that
a municipal lien or shutting off electricity to a home renders an
entire home “economically idle”, is speculative at best.
As plaintiffs have not shown they will prevail on the merits
of a Fifth Amendment takings claim, either regulatory or actual,
their motion for summary judgment fails. Instead, defendant City
9 See also Wheelahan v. City of New Orleans, No. CV 19-11720, 2020 WL 1503560,
at *9 (E.D. La. Mar. 30, 2020) (“[T]he holder of a privilege or license may be
entitled to certain procedural due process protections, but to prevail on a
takings claim a plaintiff must establish the taking of a constitutionally
protected property interest. The STR license is a privilege, not a
right.”)(internal citations omitted)(emphasis added).
has shown that it is entitled to a judgment as a matter of law
that the ordinances do not effectuate a taking. Accordingly,
defendant is entitled to summary judgment.
c. Fourth Amendment & Due Process Rights
The Fourth Amendment assures: “The right of the people to be
secure in their persons, houses, papers, and effects, against
unreasonable searches and seizures . . .and [that] no warrants
shall issue, but upon probable cause, supported by Oath or
affirmation, and particularly describing the place to be searched,
and the persons or things to be seized.” U.S. Const. IV.
Plaintiffs contend that the STR ordinances violate the Fourth
Amendment by requiring that homeowners keep record of and deliver
to the Department of Safety and Permits “for three years, . . .
the names of their guests, the number of guests in their party,
the length of their stay, the dates of their stay, and the rate
they pay; and to turn over these non-public records to the City on
demand . . .” Rec. Doc. 35 at 9. Defendant contends that the
ordinances are constitutional because: (1) they provide
opportunity for a hearing prior to the assessment of penalties;
(2) they do not authorize nonconsensual warrantless searches of
property; and (3) the City’s Department of Safety and Permits and
hearing officers do not have conflicts of interest that violate
due process. Rec. Doc. 48 at 14, 17.
“[A]bsent consent, exigent circumstances, or the like, in
order for an administrative search to be constitutional, the
subject of the search must be afforded an opportunity to obtain
precompliance review before a neutral decisionmaker.” City of Los
Angeles, Calif. v. Patel, 135 S. Ct. 2443, 2452 (U.S. 2015). In
Camara v. Municipal Court of the City and County of San Francisco,
the Supreme Court held that municipal inspections of private homes
must comply with the Fourth Amendment. 387 U.S. 523, 534, (1967).
In Camara's companion case, See v. Seattle, the Supreme Court held
that the Fourth Amendment also applies to municipal inspections of
commercial premises. 387 U.S. 541, 542 (1967). Here, the ordinance
pertaining to guest records provides:
Guest Records. The Owner shall maintain Guest
registration records, which shall contain the actual
dates of occupancy, total number of Guests per party,
per stay, and the rate(s) charged. Such records shall be
maintained for three years and shall be provided to the
City upon request, in accordance with applicable law.
Personally identifiable Guest information may be
redacted.
Rec. Doc. 48-4 at 10 (City Code Sec. 26-618 A. 2)).
Plaintiffs rely on two decisions in support of their
contention that the ordinances are unconstitutional and violative
of the Fourth Amendment. First, plaintiffs rely on Patel, where a
municipal ordinance required hotel operators to produce guest
records to police or face a criminal misdemeanor punishable by six
(6) months in jail or a $1,000 fine. Patel, 135 S. Ct. at 2448.
The ordinance required the hotel to keep track of the guest's name,
address, number of people in each guest's party, the make, model,
and license plate number of any guest's vehicle parked on hotel
property, the guest's dates of arrival and departure, room number,
rate charged, the amount collected for the room, and the method of
payment. Id. The Supreme Court held that the ordinance was
unconstitutional because it failed to provide an opportunity for
precompliance review, and that a hotel operator must “be afforded
an opportunity to have a neutral decisionmaker review an officer's
demand to search the registry before he or she faces penalties for
failing to comply . . . [and] that [a]ctual review need only occur
in those rare instances where a hotel operator objects to turning
over the registry.” Id.
Next, plaintiffs rely on Weisenberg v. Town Bd. Of Shelter
Island, 404 F. Supp. 3d 720 (E.D.N.Y. 2019), which struck a portion
of a vacation rental ordinance that required owners to produce
similar types of registries for examination by local officials
upon request. Id. at 735. The court noted that failure to comply
with these requests would result in automatic fines and potential
revocation of their licenses to rent vacation homes. Id. The court
ultimately held that “[b]y failing to provide an opportunity for
pre-compliance review before the imposition of fines, the Law may
violate the Fourth Amendment.” Id. at 736.
Here, the ordinances require the City to provide notice and
an opportunity for hearing prior to the imposition of fines or
penalties. Specifically, the relevant provision of the City Code
states that “Any violation of this Article is prohibited, and shall
subject the Owner, Operator, or Platform to penalties as provided
in Sec. 26-629 . . . [and] [n]otice and hearing requirements for
determining violation(s) shall be in accordance with the
administrative procedures provided in Chapter 6, Article III of
the Code of the City of New Orleans.” Rec. Doc. 48-4 at 24, Sec.
26-626 (emphasis added). Further, the ordinances provide
opportunity for review before a hearing officer prior to assessment
or imposition of any penalties. See Sec. 6-36.10 Accordingly, the
ordinances do not fall outside the confines of the Fourth Amendment
and are constitutional.
However, there is one exception to the City’s requirement
that a pre-deprivation hearing take place prior to the revocation
of a permit. Sec. 26-627 of the ordinance reads:
If the Department has good cause to believe that the use
of a Dwelling Unit as a[n] [STR] presents an imminent
threat to public health, safety, or welfare, the
Director of the Department, by issuance of a written
order stating the reasons for such belief, may
immediately suspend the [STR] Owner permit with respect
to the Unit without a hearing.
10 “Whenever the city agency having enforcement responsibility determines that
a Code violation exists, a notice of violation(s) shall be provided to the
owner(s).”Municode,https://library.municode.com/la/new_orleans/codes/code_of_
ordinances?nodeId=PTIICO_CH6ADPR.
Delahoussaye v. Seale supports a prehearing deprivation can meet
the standards for procedural due process when “the necessity of
quick action by the state in order to safeguard important
governmental or public interests can justify prehearing
deprivations.” 788 F.2d 1091, 1095 (5th Cir. 1986). In
Delahoussaye, the Fifth Circuit upheld the suspension of a grain
warehouse license that took place without a hearing prior to
deprivation, because the provision provided for a “prompt
postdeprivation hearing” within ten days, and a need to act quickly
in emergency situations existed. Id. at 1095–96.
Here, the provision allowing for deprivation of an STR permit
further provides that “within 14 days of the written order of
suspension, a [STR] Owner may request a hearing in writing,
directed to the Director of the Department. The hearing shall take
place within 7 business days of the written request . . . [and]
[i]f the owner fails to timely request such a hearing, the [STR]
Owner’s Permit shall be deemed revoked.” Rec. Doc. 48-4 at 25,
Sec. 26-627(c). As in Delahoussaye, the ordinance here provides
sufficient post-deprivation procedures that guard against due
process violations stemming from revocation of a permit without a
hearing.
Further, the ordinances do not authorize nonconsensual
warrantless searches of property. Sec. 26-624(3) requires city
officials to present credentials to the owner, operator, or guest
and request entry with consent. Rec. Doc. 48-4 at 22. Further,
Sec. 26-624(4) states that if consent is not obtained, and the
owner or operator of the STR refuses within 72 hours of the
Department’s request, the Director or a representative may present
an affidavit to a municipal court stating his cause to believe
that an inspection of the designated premises needed and obtain a
judicial warrant. Id. at 23. Clearly, the ordinances do not
authorize non-consensual warrantless searches of the property.
Finally, plaintiffs fail to persuasively show that the City’s
Department of Safety and Permits, as well as its hearing officers,
have any potential conflicts of interest that would violate due
process. The Supreme Court in Withrow v. Larkin has noted that
“the contention that the combination of investigative and
adjudicative functions necessarily creates an unconstitutional
risk of bias in administrative adjudication” has a very difficult
and high burden of persuasion to carry. Withrow v. Larkin, 421
U.S. 35, 47 (1975). The Court further held that a claimant must
“overcome a presumption of honesty and integrity in those serving
as adjudicators; and . . . must convince that, under a realistic
appraisal of psychological tendencies and human weakness,
conferring investigative and adjudicative powers on the same
individuals poses such a risk of actual bias or prejudgment that
the practice must be forbidden if the guarantee of due process is
to be adequately implemented.” Id. Further, arrangements where an
adjudicator has a financial interest and incentive to find
violations are prohibited. See Cain v. White, 937 F.3d 446, 453-
54 (5th Cir. 2019).
Here, defendant has shown the fines assessed by a hearing
officer of the Department are redirected into the City’s general
fund. Further, defendant shows that the Department does not keep
the funds and its annual budget is not tied to the number of fines
it collects. Plaintiffs’ assertion that there will be collusion
amongst the Department and its hearing officers is a serious
contention that is unsupported by any evidence.
Accordingly, the ordinances do not establish any violation of
the Fourth Amendment to the United States Constitution, and
further, do not represent any issues pertaining to Due Process
violations.
d. Eighth Amendment
The Excessive Fines Clause of the Eighth Amendment prohibits
the imposition of excessive fines by the government. U.S. Const.
VIII. Recently, the United States Supreme Court incorporated the
Excessive Fines Clause against the states through the Due Process
Clause of the Fourteenth Amendment. Timbs v. Indiana, ––– U.S. –
–––, 139 S. Ct. 682, 686–87, 203 L.Ed.2d 11 (2019). “[W]hen a Bill
of Rights protection is incorporated, the protection applies
‘identically to both the Federal Government and the States.’” Id.
at 689–90 (quoting McDonald v. Chicago, 561 U.S. 742, 766 n.14
(2010)).
The Excessive Fines Clause “limits the government’s power to
extract payments, whether in cash or in kind, ‘as punishment for
some offense.’” Austin v. United States, 509 U.S. 602, 609–10
(1993) (quoting Browning–Ferris Industries of Vt., Inc. v. Kelco
Disposal, Inc., 492 U.S. 257, 265 (1989)). The applicability of
the Excessive Fines Clause does not depend on whether the fine is
civil or criminal in nature, but “whether it is punishment.” Id.
at 610. If a civil sanction “cannot fairly be said solely to serve
a remedial purpose, but rather can only be explained as also
serving either retributive or deterrent purposes,” it is a
punishment. Id. (quoting United States v. Halper, 490 U.S. 435,
448, (1989)). In the excessive-fines context, a fine may constitute
punishment when, for example, it does not serve a remedial purpose
such as replacing revenue lost by the government. United States v.
Bajakajian, 524 U.S. 321, 342 (1998).
As the Supreme Court has explained, “[t]he touchstone of the
constitutional inquiry under the Excessive Fines Clause is the
principle of proportionality: The amount of the [fine] must bear
some relationship to the gravity of the offense that it is designed
to punish.” Id. at 334. “If the amount of [fine] is grossly
disproportional to the gravity of the [] offense, it is
unconstitutional.” Id. at 337. The Fifth Circuit has found that
“[a]n administrative agency’s fine does not violate the Eighth
Amendment—no matter how excessive the fine may appear—if it does
not exceed the limits prescribed by the statute authorizing it.”
Cripps v. Louisiana Dep't of Agric. & Forestry, 819 F.3d 221, 234
(5th Cir. 2016) (citing Newell Recycling Co. v. E.P.A., 231 F.3d
204, 210 (5th Cir. 2000)).
Plaintiffs contend that the fines imposed by violation of the
ordinances are excessive, unlimited, and violative of the Eight
Amendment. Plaintiff poses hypothetical situations describing the
possible ramifications of the penalties. For example, plaintiffs
describe a situation where: “a resident who simply doesn’t like
that their neighbor shares their home via home sharing platforms
could lodge multiple complaints of violations . . .” against STR
owners. Rec. Doc. 35 at 11. In another example, plaintiffs muse
that the provision authorizes the City to “discontinue electric
service to a home without regard to whether there are infants,
elderly, or residents with special needs living there . . .” Id.
Defendant contends that the ordinances are proper under the Eight
Amendment.
Sec. 26-629(a) of the ordinances outlines the penalties and
fines that may be assessed for violations of the ordinances. City
Code Sec. 26-629 provides:
Any person who violates this Article or the
Comprehensive Zoning Ordinance shall be subject to a
fine of not less than $500.00 for each offense. Each day
that such violation exists shall constitute a separate
and distinct offense. Multiple violations can occur
during a single guest stay, and may be noticed and heard
in a single administrative Hearing
In addition to any fine or penalty imposed by this
Article, the City may seek all available relief in a
court of competent jurisdiction to enjoin any violations
The City may seek any remedy to compel compliance with
the requirements of this Article or any correlating
provision in the Comprehensive Zoning Ordinance,
including the discontinuance of electrical service and
the filing of property liens.
The City may revoke or suspend any and all permits
required by this Article, as provided herein. If a permit
issued pursuant to this Article is revoked, such
revocation shall remain in effect for a period of one
year from the date of revocation. The duration of
suspension shall be dictated by the hearing officer’s
order.
Sec. 26-629(a)-(d). Further, the fine of $500.00 per violation is
provided for by law. Sec. 6-37 provides, “The penalty for each
violation shall not exceed the maximum monetary amount that may be
imposed by municipal court as provided in [La.] R.S. 12:2500.”11
Further, imposing property liens to enforce municipal fines is
also explicitly provided for under state law. See La. Stat. Ann.
§ 13:2575. Also, defendant’s contention that disconnecting the
electrical service allows the City an opportunity to impose
11 La. Stat. Ann. § 13:2500 C.(1)(“The penalty which may be imposed for each
violation of a municipal ordinance shall not exceed five hundred dollars or six
months in jail, or both at the discretion of the court, and in default of the
payment of the fine said violator may be sentenced to serve a period in jail
for a term not to exceed an additional thirty days.”)(emphasis added).
meaningful penalties on STR owner who take the fines assessed as
a mere cost of doing business is persuasive.
The STR ordinances allowing the imposition of fines were made
in conjunction with state law, are proportional, and are facially
constitutional. Plaintiff’s speculative arguments that the
disabled and elderly will be burdened by this are unavailing and
unpersuasive. Accordingly, the penalty provisions of the ordinance
do not run afoul of the Eight Amendment prohibiting excessive
fines.
Plaintiff also argues that the penalty provisions are
unconstitutionally vague. This argument is likewise unpersuasive.
The Fifth Circuit has held that the appropriate standard for
whether a law is unconstitutionally vague hinges on whether the
law is civil or criminal in nature. Ford Motor Co. v. Texas Dept.
of Transp., 264 F.3d 493, 507 (5th Cir. 2001). In Ford Motor Co.,
the Fifth Circuit stated that “a less stringent standard is applied
to civil statutes that regulate economic activity.” Id. In
determining whether the civil statute is vague, courts in the Fifth
Circuit will invalidate a statute if “‘it commands compliance in
terms ‘so vague and indefinite as to really be no rule or standard
at all’ . . . ‘or if it is substantially incomprehensible.’’” Id.
(citing United States v. Clinical Leasing Service, Inc., 925 F.2d
120, 122 n. 2 (5th Cir. 1991)). Further, the Supreme Court has
noted that, “[i]t is a basic principle of due process that an
enactment is void for vagueness if its prohibitions are not clearly
defined.” City of Mesquite v. Aladdin's Castle, Inc., 455 U.S.
283, 289, (1982)(emphasis in original)(internal quotations
omitted). In that same case, the Court held that “[t]he Federal
Constitution does not preclude a city from giving vague or
ambiguous directions to officials who are authorized to make
investigations and recommendations. There would be no
constitutional objection to an ordinance that merely required an
administrative official to review ‘all relevant information’ or
‘to make such investigation as he deems appropriate’ before
formulating a recommendation.” Id. at 291.
Here, the challenged ordinances are in no means substantially
incomprehensible. Plaintiffs allege that the ordinances leave
discretion to grant an STR permit, or to revoke said permit and
impose a fine on an STR permit holder, to “unspecified officials
according to no standards whatsoever . . .” Rec. Doc. 35 at 12.
Plaintiffs cite Sec. 26-624(a) to support their contention, which
provides: “[t]he department shall receive and process all [STR]
permit applications and determine applicant eligibility; (b) the
department shall issue permits only to eligible applicants, as
determined by the department.” Id. at 12. However, Sec. 26-617
lists with specificity the requirements for obtaining an STR
permit, and Sec. 26-624(a)-(b) gives City officials the authority
to make such determinations, and all permit denials are subject to
appeal to the BZA or a hearing officer and further judicial review
before a state district court. Rec. Doc. 48 at 21. Because the
ordinances delineate what is required for permit issuance and
eligibility, Sec. 26-617 is not unconstitutionally vague for
vesting City Officials with the authority to determine eligibility
of permit applicants under City Code Sec. 26-624.
Sec. 26-617 provides the requirements for eligibility to
receive an STR Permit. This section outlines the requirements for
the application to receive a permit, and includes the requirement
that an application have an attestation by the Owner that:
i. the Dwelling Unit has not outstanding property taxes
or City Liens associated with the lot of record, nor
does the owner owe any other outstanding taxes to the
City, including taxes and fees owed in connection with
the [STR]s;
ii. The Dwelling Unit complies, and will comply during
any [STR] of the Dwelling Unit, with all standards
contained in the City’s Minimum Property Maintenance
Code and all health safety requirements contained in the
Building Code;
iii. The Dwelling Unit has working smoke detectors
inside and outside every bedroom, carbon monoxide alarms
outside every bedroom, and a properly maintained and
charged fire extinguisher on all habitable floors;
iv. The Dwelling Unit is not subject to any contractual
restrictions precluding the Dwelling Unit from being
used for [STR]s, including but not limited to: homeowner
association agreements, condominium bylaws, restrictive
covenants, or building restrictions; and
v. the Owner has read, understands, and agrees to comply
with all legal duties imposed by this Article and the
Comprehensive Zoning Ordinance.
- The Owner possesses insurance that meets
the requirements of Sec. 26-618(A)(1).
- For all Residential permits, the Dwelling
Unit used as a [STR] is located on the same
lot of record as the owner’s primary
residence, as the homeowner possesses a
valid Homestead Exemption at that property.
vi. The Owner will not discriminate in guest use or
rental of a [STR], and will comply with all applicable
anti-discrimination laws, including but not limited to:
Title VII of the Civil Rights Act of 1968, the Fair
Housing Act (FHA), and the Americans with Disabilities
Act (ADA).
Rec. Doc. 48-4 at 9. Because the ordinances clearly outline what
is required in an application for permit eligibility, and
delineates the requirements for obtaining approval, the ordinance
is not unconstitutionally vague. As in Alladin’s Castle, defendant
city may provide its officials with the discretion to apply the
clearly set out requirements in the Sec. 26-617 City Code. See
also 26-624; Alladin’s Castle, 455 U.S. at 291. Further still, if
a potential applicant’s request for an STR permit is denied, said
denial is subject to appeal to the BZA and further judicial review
before the state court, satisfying any due process concerns. See
City Code Sec. 26-624. Accordingly, defendant City is entitled to
a judgment as a matter of law that the challenged city ordinances
are not unconstitutionally vague.
e. First Amendment
Plaintiffs contend that the revised ordinances violate their
First Amendment rights to free association and assembly, by
prohibiting more than two persons from sharing a bedroom, thereby
“criminalizing . . . a couple who allow their infant or child to
sleep in the bedroom with them.” Rec. Doc. 35-2 at 12. Plaintiffs
further contend that the ordinances criminalize this behavior
without regard for the size of the room, its furnishings, or the
specifications for sleeping rooms in the International Building
Code adopted by the City of New Orleans. Id. Defendant contends
the ordinances do not violate the First Amendment’s guarantees to
free assembly and association, and that plaintiffs’ claims are
merely speculative. This Court agrees.
Freedom of association has a foundation in freedom of speech.
See Thorne v. Jones, 765 F.2d 1270, 1273 (5th Cir. 1985). The
freedom of association “has always meant the right to associate
ideologically: for advancement of beliefs and ideas.” Id. (quoting
White v. Keller, 438 F. Supp. 110, 115 n. 7 (D. Md. 1977), aff'd,
588 F.2d 913 (4th Cir. 1978)). “The right is protected because it
promotes and may well be essential to the effective advocacy of
both public and private points of view, particularly controversial
ones that the First Amendment is designed to foster.” Id. (internal
quotation and citation omitted). In the context of prison
visitations, the Fifth Circuit in Thorne further noted:
[T]he first amendment expressly protects the freedom of
assembly, which is patently a right to associate
physically. But this freedom must be read in context; it
is not simply a right to associate physically; it is a
right to associate physically for the purpose of
expressing ideas. And it is not a right merely to be
together, [sic] it is a right to assemble; it connotes
a gathering, not a visitation. While the argument could
be made that it includes all physical associations,
since no doubt meaningful, protected ideas might be
exchanged on any such occasion, the court is doubtful
that the rights of association and assembly are so broad.
The history, nature and purpose of the first amendment
do not warrant this conclusion. Although the amendment
protects all ideas, its essence is political.
Id. at 1274 (quoting White v. Keller, 438 F. Supp. 110, 115 n. 7
(D. Md. 1977), aff'd, 588 F.2d 913 (4th Cir. 1978)).
Here, the challenged ordinance merely prevents STR owners
from skirting those ordinances by claiming that a bedroom in fact
sleeps more than the recommended amount of people, among other
things. The First Amendment, while certainly protective of the
right to congregate and exchange political ideologies and ideas,
in all likelihood does not extend to something as speculative, and
in this context trivial, as ordinances noting specific
requirements for the number of persons legally allowed to sleep in
the bedroom of an STR. Accordingly, this case presents no
unreasonable or irrational regulations preventing association of
assembly based on conceivable rational basis for same.
Further, the STR ordinances do not prohibit non-commercial
social events of the type plaintiffs describe. Section 26-
620(B)(8), states that STRs are only prohibited from being operated
as commercial reception facilities. Specifically, Section 26-620
provides in pertinent part:
Prohibited Acts. The following acts shall be prohibited
and may be grounds for suspension or revocation of a[n]
[STR] Permit . . . 6) Exceeding the Guest Bedroom
limitation set forth in the Comprehensive Zoning
Ordinance. 7) Exceeding the Guest occupancy limitations
set for in the Comprehensive Zoning Ordinance. 8) No
Dwelling Unit associated with a [STR] Owner Permit may
be used as a reception facility, or any other commercial
use defined by the Comprehensive Zoning Ordinance. No
Special even permit shall be obtained for an event
occurring at a Dwelling Unit during any period of Guest
occupancy.
Rec. Doc. 48-4 at 18, Sec. 26-620(B)(6-8). Thus, plaintiffs’
contentions remain unpersuasive.
Finally, the citation to the Texas Appellate Court case,
Zaatari v. City of Austin, No. 03-17-00812-CV, 2019 WL 6336186,
(Tex. App. Nov. 27), which analyzed STR ordinances in light of the
Texas Constitution, is inapplicable in the present context.12
f. Dormant Commerce Clause
The Constitution gives Congress the authority to regulate
commerce. U.S. CONST., art. I, § 8, cl. 3. The Dormant Commerce
12 “Possibly accounting for the lack of assembly-clause cases in Texas, the
Texas Supreme Court has adopted the judicially created right of association as
a right that is instrumental to the First Amendment's free speech, assembly,
and petition guarantees. But, in contrast to the U.S. Supreme Court, the Texas
Supreme Court has never limited the application of Texas's assembly clause to
situations where the purpose of the assembly was to petition the government for
a redress of grievances. Nor has the Texas Supreme Court expressly held, or
even considered whether, the judicially created right of association has
subsumed the text of Texas's assembly clause, as some commentators have
indicated has occurred with the federal assembly clause. We therefore rely on
the plain text of the Texas Constitution to conclude that its assembly clause
is not limited to protecting only petition-related assemblies and the judicially
created right of association does not subsume the Texas Constitution's assembly
clause in its entirety. Zaatari v. City of Austin, No. 03-17-00812-CV, 2019 WL
6336186, at *13 (Tex. App. Nov. 27, 2019)(emphasis added)(internal citations
and quotations omitted).
Clause doctrine arises from the inversion of this principle, in
other words, “th[e] negative aspect of Commerce Clause prohibits
economic protectionism—that is, regulatory measures designed to
benefit in-state economic interests by burdening out-of-state
competitors.” Wyoming v. Oklahoma, 502 U.S. 437, 454 (1992)
(internal quotations and citations omitted). The Supreme Court
further explained, “when a state statute clearly discriminates
against interstate commerce, it will be struck down . . . unless
the discrimination is demonstrably justified by a valid factor
unrelated to economic protectionism.” Wyoming, 502 U.S. at 454. In
this context discrimination is defined as “differential treatment
of in-state and out-of-state economic interests that benefits the
former and burdens the latter.” Or. Waste Sys. v. Dep't of Envtl.
Quality, 511 U.S. 93, 99 (1994). Further, “[w]here the statute
regulates even-handedly to effectuate a legitimate local public
interest, and its effects on interstate commerce are only
incidental, it will be upheld unless the burden imposed on such
commerce is clearly excessive in relation to the putative local
benefits.” Pike v. Bruce Church, 397 U.S. 137, 142 (1970).
Here, it appears that the ordinances do discriminate against
out-of-state owners of STR properties, albeit incidentally. Sec.
26-617(6)(v) provides: “For all residential permits, the dwelling
unit used as a [STR] is located on the same lot of record as the
owner's primary residence, and the owner possesses a valid
Homestead Exemption at that property.”(emphasis added). Further,
Sec. 26-614 defines Primary Residence throughout the article as
“the Owner's bona fide principal home, as indicated by the
possession of a valid homestead exemption authorized by the Orleans
Parish Assessor's Office.” (emphasis added). Defendant contends
that the STR Ordinances do not impermissibly discriminate against
nonresidents because “the distinction drawn by the STR Ordinances
is not between whether the property owner is local or out-of-
state; the relevant distinction is whether the property itself is
an owner-occupied home or a non-owner-occupied rental property,
regardless of whether its owner lives in Orleans Parish. Rec. Doc.
48 at 24 (emphasis in original). This contention is not correct,
and the statute effectively discriminates against out-of-state
owners of STR and in state owners of STR, as a person living within
the state is more likely to have a homestead exemption within the
state than a person residing in another state entirely. However,
as stated previously, where “the statute regulates even-handedly
to effectuate a legitimate local public interest, and its effects
on interstate commerce are only incidental, it will be upheld
unless the burden imposed on such commerce is clearly excessive in
relation to the putative local benefits.” Pike, 397 U.S. at 142.
Here, the incidental effect on interstate commerce is one
that was unintended, and “not clearly excessive in relation to the
putative local benefits.” Pike, 397 U.S. at 142. Defendant cites
the 2018 Short Term Rental Study, which noted that whole home
rentals “led to quality of life issues, such as noise [and] loss
of neighborhood character . . . These negative impacts are
exacerbated in residential areas, where most of the temporary
licenses are located.” Short Term Rental Study, Exhibit 4 at 7.
Further, the City Council spoke at length about protecting
neighborhoods and ensuring accountability by requiring homestead
exemptions for temporary STR permits, thus demonstrating that the
ordinance was subject to a legitimate local public interest and
not protectionism for Louisiana residents. Rec. Doc. 48 at 24-25.13
Plaintiffs provide no opposition to defendant’s contentions in
their response to the defendant’s motion for summary judgment, and
do not address the Dormant Commerce Clause in their motion for
partial summary judgment. As noted earlier, the ordinance affects
interstate commerce, but only incidentally, and is subject to a
legitimate public interest. Accordingly, defendant is entitled to
a judgment as a matter of law with respect to whether the
ordinances run afoul of the dormant Commerce Clause.
13 Defendant also cites Rosenblatt v. City of Santa Monica, 940 F.3d 439 (9th
Cir. 2019) in support of their argument that the ordinance at issue does not
run afoul of the dormant Commerce Clause. However, that case is misplaced and
distinguishable form the present facts. In Rosenblatt, the court noted that
the owner of the STR unit need not be the primary resident, and cited the
quoted the ordinance in question in support. Rosenblatt, 940 F.3d at 450
(“‘[A]t least one of the dwelling unit's primary residents lives on-site, in
the dwelling unit, throughout the visitors' stay.’ Santa Monica Mun. Code §
6.20.010(a)”). Here, the ordinance at issue clearly contemplates that the
owner of the unit must be the primary resident of the STR, thus differing
from the Rosenblatt case. See Sec. 26-614, 26-617(6)(v).
New Orleans, Louisiana this 6th day of August, 2020.
___________________________________
SENIOR UNITED STATES DISTRICT JUDGE