Federal Judge Dismisses Suit Against Santa Monica Short-Term Rental Ban

By Lookout Staff

May 30, 2017 -- A California Federal Court last week dismissed a claim against the City of Santa Monica that argued that the California Coastal Act overrode the City's ban on short-term vacation rentals listed on such sites as Airbnb.

In his ruling Wednesday, U.S. District Judge Otis D. Wright II found that Federal court was the wrong venue to argue that claim and noted that he already had dismissed all other federal claims in the class action suit filed by a retired school teacher last June.

“While the court agrees that it has the discretion to keep plaintiff’s state law claims in federal court, it is simply not prudent to do so,” Judge Wright wrote. “Defendants have not yet filed an answer and discovery has not commenced.

"As such, other than the case having been originally filed here, there do not appear to be any factors supporting its retention in federal court given that only state law claims remain.”

The suit filed by Arlene Rosenblatt claimed Santa Monica's 2015 ordinance banning leasing residential property short-term unless the owner is present was unconstitutional.

The law, the suit argued, “substantially burdens" interstate commerce, discriminates in favor of Santa Monica businesses such as hotels and unreasonably restricts the use of private property ("Lawsuit Claims Santa Monica’s Short-Term Rental Ban Unconstitutional," July 12, 2016).

On Sept. 18, Wright granted the city’s first motion to dismiss the case, but the plaintiffs filed a first amended complaint alleging four causes of action that included the alleged violation of the California Coastal Act.

On March 30, Judge Wright found that Santa Monica's law "does not facially discriminate against or directly regulate interstate commerce and that its burdens do not overwhelm its local benefits."

But the judge found that the plaintiff had adequately pled two separate bases for violations of the California Coastal Act.

On April 17, the City filed a motion to dismiss the Coastal Act claims.

“The Coastal Act does not authorize the Coastal Commission or any other person to override the exercise of the city’s police power to adopt local land use legislation to protect the public health and general welfare of its residents," the City argued.

"The ordinance is entirely consistent with the Coastal Act.”

The motion also argued that the claims should not remain in federal court. On Wednesday, the judge agreed.