Keep Chicago Livable et al v. City of Chicago, The
OPINION AND ORDER. Signed by the Honorable Sara L. Ellis on 3/13/2017. Mailed notice(rj, )
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
KEEP CHICAGO LIVABLE, an Illinois
not-for-profit corporation, BENJAMIN
THOMAS WOLF, SUSAN MALLER,
DANIELLE MCCARRON, ANTOINETTE
WONSEY, MONICA WOLF, and JOHN DOE, )
THE CITY OF CHICAGO, a Municipal
No. 16 C 10371
Judge Sara L. Ellis
OPINION AND ORDER
Proponents of home sharing—both hosts and guests—Plaintiffs Keep Chicago Livable,
Benjamin Thomas Wolf, Susan Maller, Danielle McCarron, Antoinette Wonsey, Monica Wolf,
and John Doe bring suit against the City of Chicago (the “City”), seeking to prevent the
implementation of the Shared Housing Ordinance (“SHO”), which the City passed in June 2016
to regulate the home sharing industry in the City. Only Keep Chicago Livable and Wolf were
plaintiffs when they first filed suit in November 2016, alleging that the SHO violates the First
Amendment right to freedom of speech, the Fourth Amendment right to be free from
unreasonable searches and seizures, the Stored Communications Act (“SCA”), 18 U.S.C. § 2701
et seq., the Fifth Amendment takings clause, the Eighth Amendment excessive fines clause, the
Fourteenth Amendment due process clause, the Illinois Constitution, and the Illinois Trade
Secrets Act, 765 Ill. Comp. Stat. 1065/1 et seq. On December 1, 2016, they sought a preliminary
injunction with respect to their First Amendment, due process, and SCA claims . The Court
held oral argument on the motion on February 1, 2017. Thereafter, the City amended portions of
the SHO on February 22, 2017, prompting an amended complaint  and amended preliminary
injunction motion . The amended complaint adds additional parties and changes the claims
alleged. The First Amendment and due process challenges remain, but Plaintiffs dropped the
remaining original claims in exchange for asserting violations of the Fourteenth Amendment’s
rights to intimate and expressive association and equal protection. Plaintiffs maintain that their
filing of the amended complaint and amended motion for preliminary injunction did not moot
their initial preliminary injunction motion but instead expanded upon the reasons for why an
injunction should issue. Because the issues raised in the first injunction motion are ripe for
decision, the Court addresses those here.1 The Court finds that Plaintiffs have failed to meet the
threshold requirements for issuance of a preliminary injunction with respect to the First
Amendment and due process claims and so denies Plaintiffs’ motion for a preliminary injunction
 and the amended motion for a preliminary injunction  with respect to those claims.
In recent years, home sharing has become a popular alternative to the typical short-term
rental options—hotels, inns, and bed-and-breakfast establishments. Home sharing usually
involves individuals renting out their homes or apartments to guests in exchange for
compensation. Although the concept of home sharing is not new, its popularity has increased
Because Plaintiffs dropped their SCA claim in the amended complaint, the Court finds Plaintiffs’
request for a preliminary injunction based on the SCA claim moot and does not address it further in this
Opinion. To the extent that the amended motion for preliminary injunction  incorporates or expands
on arguments related to the claims raised in the initial preliminary injunction motion, the Court addresses
them here, with this Opinion operating as an adjudication of that motion as it relates to those claims.
The Court takes the following facts from the complaint, briefs, and exhibits filed with the Court. To the
extent the amended complaint adds allegations relevant to the Court’s disposition of the motion for a
preliminary injunction, the Court takes them into consideration. Similarly, the Court takes into account
the February 22, 2017 amendments to the SHO.
due to the proliferation of internet platforms like Airbnb, VRBO, and HomeAway, which allow
hosts to post listings of their units and connect easily with guests who would like to rent those
As home sharing has increased in popularity with little oversight, cities across the country
have sought to regulate the industry. The City’s approach is the SHO, enacted on June 22, 2016
and further amended on February 22, 2017.3 At a high level, the SHO requires hosts to register
with the City in order to list and rent their units on sites like Airbnb or VRBO and subjects hosts
to various restrictions and regulations. Additionally, the SHO requires listing platforms, like
Airbnb, to obtain licenses and to provide the City with information on the units listed on their
More specifically, the SHO applies to two types of short-term rentals: “vacation rentals”
and “shared housing units.” The SHO defines a “vacation rental” as:
a dwelling unit that contains 6 or fewer sleeping rooms that are
available for rent or for hire for transient occupancy by guests.
The term “vacation rental” shall not include: (i) single-room
occupancy buildings or bed-and-breakfast establishments, as those
terms are defined in Section 13-4-010; (ii) hotels, as that term is
defined in Section 4-6-180; (iii) a dwelling unit for which a tenant
has a month-to-month rental agreement and the rental payments
are paid on a monthly basis; (iv) corporate housing; (v) guest
suites; or (vi) shared housing units registered pursuant to Chapter
4-14 of this Code.
SHO § 4-6-300(a).4 The SHO defines a “shared housing unit” similarly as:
a dwelling unit containing 6 or fewer sleeping rooms that is rented,
or any portion therein is rented, for transient occupancy by guests.
The term “shared housing unit” shall not include: (1) single-room
occupancy buildings; (2) hotels; (3) corporate housing; (4) bed3
The implementation of the SHO’s provisions, except those delineated in the agreed order for the stay,
Doc. 19, is stayed until March 14, 2017 pending the Court’s ruling on this motion.
The SHO can be found at Doc. 1-1, Doc. 20-2, or Doc. 29-1. The amendments to the ordinance are
found at Doc. 29-2.
and-breakfast establishments, (5) guest suites; or (6) vacation
Id. § 4-14-010.5 “Transient occupancy” means “occupancy on a daily or nightly basis, or any
part thereof, for a period of 31 or fewer consecutive days.” Id. § 4-6-290.
In order to list units for rental, individuals must obtain a license or registration number
from the City and include that number in their listing. Id. §§ 4-6-300(h)(1), 4-14-040(a)(4). To
obtain the registration number, shared housing hosts must attest that they have reviewed a
summary of the SHO’s requirements and “acknowledge that the listing, rental and operation of
shared housing units in the City are subject to those requirements.” Doc. 29-2 § 4-13-215.
Additionally, as part of the licensing and registration process, the City ensures that the rentals
meet various requirements, such as location restrictions, set forth in the SHO. For example, in
buildings with over five units, no more than six dwelling units, or 1/4 of the total dwelling units
in the building, whichever is less, may be used as vacation rentals or shared housing units, unless
the commissioner allows an adjustment. SHO §§ 4-6-300(d)(1), (l), 4-14-060(f). Single family
homes may only be rented if the home is the licensee or host’s primary residence, unless certain
exceptions apply. Id. §§ 4-6-300(h)(8), 4-14-060(d). The SHO allows buildings to prohibit
shared housing units in those buildings, creating a “prohibited buildings list” that, at the time of
Although the definitions for both “vacation rental” and “shared housing unit” appear almost identical,
the difference between the two appears to lie in the status of the occupant of the dwelling unit seeking to
rent out the property. A close reading of the SHO suggests that only owners of dwelling units (defined to
include those who lease units in a cooperative building) may obtain licenses for vacation rentals, SHO
§ 4-6-300(a), (b), while a “shared housing host” may be either an owner or tenant of the dwelling unit, id.
§ 4-14-010. But the City’s counsel did not make this distinction clear during the hearing on the
preliminary injunction hearing, instead suggesting that to the extent that someone wished to rent out their
second bedroom (regardless of whether that person rented or owned the dwelling unit) not on Airbnb or
another online platform but instead using the classified advertisements in a newspaper, that form of rental
would be considered a vacation rental. For purposes of this Opinion, the Court generally treats vacation
rentals and shared housing units interchangeably because the requirements and regulations of the two
generally align but highlights the differences where appropriate.
the filing of the amended complaint included over 1,000 buildings.6 Id. § 4-14-020(d). The
SHO also provides for restricted residential zones, in which new or additional shared housing
units or vacation rentals would be ineligible for licensing. Id. Ch. 4-17.
Once a vacation rental or shared housing unit is licensed or registered, the SHO imposes
additional requirements on the licensee or host in listing and operating the rentals. For example,
the SHO requires licensees and hosts to maintain guest registration records, including the name,
address, signature, and date of accommodation of each guest, and to keep such records for three
years.7 Id. §§ 4-6-300(f)(2), (3), 4-14-040(b)(8), (9). Licensees and hosts must post their license
number, as well as the name and telephone number of a local contact person, in a conspicuous
place near the entrance of the unit. Id. § 4-6-300(f)(7), 4-14-040(b)(6). Other requirements
include: providing guests with soap and clean linens; sanitizing cooking utensils and disposing of
food, beverages, and alcohol left by previous guests; complying with all food handling and
licensing requirements if food is provided to guests; and notifying police of illegal activity. Id.
§§ 4-6-300(f), 4-14-040(b). Licensees and hosts are subject to fines and penalties for allowing
criminal activity, egregious conditions, or public nuisances in their rentals. Id. §§ 4-6-300(g)(4),
4-14-050(a). The SHO gives the City suspension and revocation powers if egregious or
objectionable conditions occur. Id. §§ 4-6-300(j), 4-14-080.
The SHO also targets the platforms on which short-term rentals are listed. Again, the
SHO creates two categories: “short term residential rental intermediaries” and “short term
The entire list can be found at https://data.cityofchicago.org/Buildings/House-Share-ProhibitedBuildings-List/7bzs-jsyj/data.
The City amended the SHO so that, instead of requiring that a licensee or host make the records
available for inspection by an authorized city official upon request, the records are now only subject to
disclosure to an authorized city official pursuant to a search warrant, subpoena, or other lawful procedure
to compel the production of records, unless the licensee or host consents to disclosure. See Doc. 29-2
§§ 4-6-300(f)(3), 4-14-040(b)(9).
residential rental advertising platforms.” A “short term residential rental intermediary,” such as
Airbnb, is “any person who, for compensation or a fee: (1) uses a platform to connect guests with
a short term residential rental provider for the purpose of renting a short term residential rental,
and (2) primarily lists shared housing units on its platform.” Id. § 4-13-100. Intermediaries
must bulk register all shared housing units listed on their platform with the City and remove
listings without valid registration numbers. Id. § 4-13-230(a). The SHO also requires
intermediaries to provide reports to the City regarding rental activity on their platforms, typically
in anonymized formats. Id. § 4-13-240(f).
A “short term residential rental advertising platform,” such as HomeAway or VRBO, is
“any person who, for compensation or a fee: (1) uses a platform to connect guests with a short
term residential rental provider for the purpose of renting a short term residential rental, and (2)
primarily lists licensed bed-and-breakfast establishments, vacation rentals or hotels on its
platform or dwelling units that require a license under this Code to engage in the business of
short term residential rental.”8 Id. § 4-13-100. The SHO requires these platforms to provide unit
registration data to the City, but the reporting requirements are not as extensive as for
intermediaries because the vacation rental licensees register themselves. Id. § 4-13-040.
After the City passed the SHO, Keep Chicago Livable and Wolf filed this suit, seeking to
enjoin its implementation. Keep Chicago Livable is a non-profit formed by Chicago residents
who participate in home sharing as hosts to “educate other Chicago owners and renters as to their
rights and duties to participate in home sharing and to assist them with compliance with both
state and local law as well as internally developed ‘best practices’ for responsible home sharing
At the preliminary injunction hearing, the parties disputed whether the term “short term residential rental
advertising platform” encompasses only online platforms or also offline platforms, such as newspapers.
The Court need not resolve the issue at this time, although it notes that the confusion may stem from the
definition of “platform” and how that term is subsequently used in the definitions for “short term
residential rental intermediary” and “short term residential rental advertising platform” in § 4-13-100.
and assist homeowners with compliance with applicable regulations.” Doc. 29 ¶ 13. The
individual Plaintiffs, and others like them, use Airbnb for social interactions and for the sense of
community it provides. As hosts, they claim to charge a fee because “[i]t is impossible for a host
to create a listing on Airbnb – and thus, impossible for a person wishing to host a guest from this
deep, vetted and insured guest pool – without including and maintaining a price term.” Doc. 29
¶ 35; see also id. ¶ 38 (“The primary purpose for many hosts on platforms such as Airbnb is not
necessarily to obtain a profit. Hosts enjoy sharing their homes with guests for many reasons that
have nothing to do with making a profit, such as making new friends, learning about different
cultures, showing off one’s home and city to a newcomer or simply out of empathy for a traveler
who could not otherwise afford to stay in a downtown hotel.”).
In reply to the original preliminary injunction motion, Keep Chicago Livable and Wolf
included several affidavits from Airbnb hosts, some of whom have since become named
Plaintiffs in the litigation. Wolf, a Chicago resident who has served as an Airbnb host and guest
since 2012 but recently took down his listing because of this litigation, states that Airbnb has
allowed him to meet a diverse group of people while in Chicago, “underscor[ing] the importance
of cultural exchange.” Doc. 23-1 at 2. Aside from the social benefits, without Airbnb, he would
not have been “able to afford the cost of living in [his] building and as a graduate student.” Id.
His building is subject to the SHO’s maximum cap provision, and he believes there may be over
six Airbnb listings in his building. Adam Fried owns a single family home in Bucktown, which
he lists “sporadically” on Airbnb. Id. at 4. He says he does not use Airbnb “solely or even
primarily for profit-motivated reasons” but instead for security reasons when he is out of town
because he would “prefer to be paid rather than to pay for ‘house sitting’ services.” Id. Valerie
Landis indicates that she used Airbnb “[d]uring a period of temporary unemployment” when she
“enjoyed the company of [her] hand-picked guests.” Id. at 7. She has vocally opposed the SHO,
which she claims resulted in harassment from her Alderman’s office and caused her
condominium association to fine her for violating its rules by having Airbnb listings for her
second bedroom. Ron Sattar, who owns a single family home in Chicago, had a complaint filed
against him by the City for operating an unlicensed bed-and-breakfast in July 2016. The City
allegedly brought the complaint based on reports from his neighbor that he was booking guests
through Airbnb but dropped the complaint provided he fix some minor electrical issues with his
home. Sattar claims his neighbor has repeatedly harassed him and his guests without cause or
justification. Antoinette Wonsey owns a single family home in Englewood and lists rooms for
rent on Airbnb, using the money she earns to renovate her home and support herself. She uses a
pseudonym on Airbnb, allegedly “to avoid harassment from City of Chicago police officers,”
harassment which has led her to file a federal lawsuit.9 Id. at 29. Both David Boyd and Susan
Maller live in an apartment building at 355 E. Ohio Street, where their landlord changed the
locks on their units, allegedly based on rumors that they had listings on Airbnb in violation of
their leases. Finally, after the condominium association learned of his activities on Airbnb,
Waseem Gorgi was fined for renting out his condominium on Airbnb in violation of the
condominium association rules.
The party seeking a preliminary injunction must first show: (1) it is reasonably likely to
succeed on the merits, (2) it will suffer irreparable harm absent an injunction before final
resolution of its claims, and (3) it has no adequate remedy at law. Girl Scouts of Manitou
Council, Inc. v. Girl Scouts of the U.S.A., Inc., 549 F.3d 1079, 1086 (7th Cir. 2008). If the
That lawsuit, Wonsey v. City of Chicago, No. 16 C 9936, makes no mention of the fact that the alleged
harassment occurred because of Wonsey’s Airbnb activities.
moving party fails to demonstrate any of these three requirements, the Court will deny the
motion. Id. But if the moving party meets this threshold showing, the Court attempts to
“minimize the cost of potential error” by “balanc[ing] the nature and degree of the plaintiff’s
injury, the likelihood of prevailing at trial, the possible injury to the defendant if the injunction is
granted, and the wild card that is the ‘public interest.’” Id. “Specifically, the court weighs the
irreparable harm that the moving party would endure without the protection of the preliminary
injunction against any irreparable harm the nonmoving party would suffer if the court were to
grant the requested relief.” Id. (citing Abbott Labs. v Mead Johnson & Co., 971 F.2d 6, 11–12
(7th Cir. 1992)). The Seventh Circuit has described this balancing test as a “sliding scale” in
which “[t]he more likely the plaintiff is to win, the less heavily need the balance of harms weigh
in his favor; the less likely he is to win, the more need it weigh in his favor.” Id. (quoting Roland
Mach. Co. v. Dresser Indus., Inc., 749 F.2d 380, 389 (7th Cir. 1984)).
Likelihood of Success
“[T]he threshold for demonstrating a likelihood of success on the merits is low,” with
Plaintiffs needing only to demonstrate that their chances of prevailing are “better than
negligible.” D.U. v. Rhoades, 825 F.3d 331, 338 (7th Cir. 2016). The Court addresses whether
Plaintiffs have met this low threshold on their First Amendment and due process claims. With
respect to the First Amendment claims, “the likelihood of success on the merits will often be the
determinative factor” in determining whether a preliminary injunction should issue. Joelner v.
Vill. of Washington Park, Ill., 378 F.3d 613, 620 (7th Cir. 2004).
First Amendment Claims
Plaintiffs bring three claims under the First Amendment, arguing that the SHO
(1) constitutes an unconstitutional prior restraint on speech; (2) constitutes unconstitutional
compelled speech, even if viewed as commercial speech; and (3) amounts to impermissible
content-based regulation of speech because it specifically targets internet-based home sharing.
The City argues, however, that the Court need not consider the substance of Plaintiffs’ arguments
on these claims because Plaintiffs will not be able to establish that the SHO regulates speech. It
contends that the SHO does not implicate the First Amendment’s protections on speech because
the SHO instead regulates the business activity of the short-term rental industry, an economic
transaction, with any restriction on speech merely incidental to the valid economic regulation.
The SHO, according to the City, is just the latest exercise of the City’s authority to license and
regulate businesses, adding a new type of commercial activity—short-term rentals—to a long list
of regulated business activities.
“[R]estrictions 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,
131 S. Ct. 2653, 180 L. Ed. 2d 544 (2011). “[T]he First Amendment does not prevent
restrictions directed at commerce or conduct from imposing incidental burdens on speech.” Id.;
see also Rumsfeld v. Forum for Acad. & Institutional Rights, Inc., 547 U.S. 47, 60, 126 S. Ct.
1297, 164 L. Ed. 2d 156 (2006) (statute did not violate First Amendment because it affected
what law schools “must do . . . not what they may or may not say”). The First Amendment
protects speech and conduct but extends “only to conduct that is inherently expressive.”
Rumsfeld, 547 U.S. at 66 (“If combining speech and conduct were enough to create expressive
conduct, a regulated party could always transform conduct into ‘speech’ simply by talking about
Here, Plaintiffs have not demonstrated that they are likely to succeed in establishing that
the SHO targets expressive conduct or speech instead of economic activity. Plaintiffs do not
suggest, for example, that the SHO falls outside the purview of a pure business regulation
because it targets specific speakers or “the idea or message expressed.” Cf. Reed v. Town of
Gilbert, --- U.S. ----, 135 S. Ct. 2218, 2224, 2227, 192 L. Ed. 2d 236 (2015) (invalidating a
municipal code that imposed different restrictions on outdoor signs based on the message of the
signs); Sorrell, 564 U.S. at 563–64 (striking down statute that “disfavor[ed] marketing, that is
speech with a particular content” and “disfavor[ed] specific speakers, namely pharmaceutical
manufacturers,” by restricting the “sale, disclosure, and use of prescriber-identifying
information”); Simon & Schuster, Inc. v. Members of N.Y. State Crime Victims Bd., 502 U.S.
105, 116, 112 S. Ct. 501, 116 L. Ed. 2d 476 (1991) (statute restricting a criminal’s right to profit
from literary or other works based on crime fell within the First Amendment’s protections
because it addressed “income derived from expressive activity” and was “directed only at works
with a specified content,” i.e., those concerning the reenactment of a crime).
Instead, Plaintiffs contend that the SHO cannot be considered a business regulation
because home sharing is not purely a commercial undertaking. They provide examples of noncommercial reasons for signing up as a host, “such as making new friends, learning about
different cultures, showing off one’s home and city to a newcomer or simply out of empathy for
a traveler who could not otherwise afford to stay in a downtown hotel.” Doc. 29 ¶ 38. In
essence, Plaintiffs argue that home sharing does not provide a fungible good or service but rather
a personalized experience, taking it outside the realm of economic conduct. Accordingly,
Plaintiffs contend that the SHO regulates expressive conduct by mandating that hosts or
licensees include a registration number in their listings, for example. But Plaintiffs must admit
that, regardless of whether they also derive some social benefit from home sharing, they receive
money in the process of renting their units to guests and guests receive a place to stay in
exchange.10 Despite Plaintiffs’ best efforts to creatively argue otherwise, home sharing does
provide something fungible, establishing, at base, a commercial relationship between a host and
guest.11 See SHO § 4-14-010 (defining a shared housing unit as “a dwelling unit . . . that is
rented . . . for transient occupancy by guests”).
The City points out that, following Plaintiffs’ logic, any business license requirement
would involve First Amendment protections because most businesses or individuals subject to
licensing engage not only in commercial activity but also have social interactions with customers
or others. Indeed, Plaintiffs’ position is untenable and has recently been rejected: “regulation of
conduct may proceed even if the person who wants to violate the legal rule proposes to express
an idea” where the regulation applies to economic transactions, such as peddling, and applies to
all sales alike. See Left Field Media LLC v. City of Chicago, Ill., 822 F.3d 988, 990 (7th Cir.
2016) (affirming denial of preliminary injunction challenging ban on peddling outside Wrigley
A number of the affidavits submitted in connection with Plaintiffs’ reply to the preliminary injunction
motion underscore the fact that hosts engage in home sharing not only for its social benefits but also
because they derive income from doing so. For example, Wolf stated that “[b]ut for Airbnb,” he would
not have been “able to afford the cost of living in my building, among other things. Doc. 23-1 at 2. Fried
indicated that he used Airbnb while he was away from his house because he “would prefer to be paid
rather than to pay for ‘house sitting’ services,” revealing an economic calculus behind his decision. Id. at
4. Wonsey states that she uses the money she earns through Airbnb to “restore and renovate [her] historic
home and to otherwise pay the costs of living in Chicago.” Id. at 29.
Plaintiffs argue in reply, without citation, that “the Ordinance is presumptively unconstitutional unless
it is true that every host on Airbnb is doing so as a ‘business activity.’” Doc. 23 at 3. Plaintiffs then try to
analogize to tax and ERISA definitions for determining whether an activity constitutes a trade or business.
See Comm’r of Internal Revenue v. Groetzinger, 480 U.S. 23, 35, 107 S. Ct. 980, 94 L. Ed. 2d 25 (1987);
Cent. States, Se. & Sw. Areas Pension Fund v. White, 258 F.3d 636, 642 (7th Cir. 2001). But these cases
have not been applied in the First Amendment context nor does the Court find it appropriate to extend
them to the situation here.
Field where plaintiff wanted to sell magazines, finding that regulation of peddling on sidewalk
did not regulate speech but rather conduct). Like with peddlers who hawk their goods but are
lawfully subject to a regulation as to where they sell those goods, the City may lawfully subject
home sharing to regulation without implicating the First Amendment because the SHO regulates
conduct—the temporary rental of property in exchange for money—instead of speech. See id.;
Int’l Franchise Ass’n v. City of Seattle, 803 F.3d 389, 408 (9th Cir. 2015) (minimum wage
ordinance did not implicate First Amendment protections because it was “plainly an economic
regulation that does not target speech or expressive conduct,” with the “decision of a franchisor
and a franchisee to form a business relationship and their resulting business activities” having no
characteristics of expressive conduct); Airbnb, Inc. v. City & County of San Francisco, --- F.
Supp. 3d ----, 2016 WL 6599821, at *6–7 (N.D. Cal. Nov. 8, 2016) (in denying preliminary
injunction that claimed short-term rental regulations violated the First Amendment, finding that
Airbnb facilitated “business transaction[s] to secure a rental, not conduct with a significant
expressive element”); Jacoby & Meyers, LLP v. Presiding Justices of the First, Second, Third, &
Fourth Dep’ts, App. Div. of the Sup. Ct. of the State of N.Y., 118 F. Supp. 3d 554, 569 (S.D.N.Y.
2015) (laws preventing law firm from seeking non-lawyer equity investors were merely
“restriction[s] on a commercial practice” that “fall outside the purview of the First Amendment
even if they impose ‘incidental burdens on speech’” (alteration in original)). That some hosts or
licensees also derive a social benefit from home sharing makes no difference to the dispositive
question of whether the SHO regulates economic activity. Int’l Franchise Ass’n, 803 F.3d at 408
(acknowledging that ordinance was “not wholly unrelated to a communicative component, but
that in itself does not trigger First Amendment scrutiny”).
Because the SHO does not target speech but rather the business practices associated with
home sharing, only incidentally burdening speech if at all, the SHO falls outside the purview of
the First Amendment. Thus, the Court finds that Plaintiffs are unlikely to prevail on the merits
of their First Amendment claims and need not delve into the specifics of the three substantive
claims they bring under the First Amendment.
Due Process Vagueness Claim (Count VIII)
Plaintiffs also argue that the Court should enter a preliminary injunction because the SHO
is void for vagueness in violation of the Fourteenth Amendment’s due process clause. Although
Plaintiffs set forth numerous bases for their void for vagueness challenge in their original and
amended complaints, broadly complaining that the SHO “is too long, vague and prolix for a
person of common intelligence to understand” and then more specifically alleging issues with the
definition of “guest suites” and what it means for a host to provide food to a guest, see Doc. 1
¶¶ 226–243, Doc. 29 ¶¶ 75–89, in their preliminary injunction, they highlight only the alleged
difficulties in implementing the law as it relates to the maximum caps provision. Plaintiffs’
failure to develop any substantive argument as to these other provisions, instead attempting to
merely incorporate the allegations of the complaint by reference, waives those challenges.
United States v. Hook, 471 F.3d 766, 775 (7th Cir. 2006) (“We repeatedly have made clear that
perfunctory and undeveloped arguments, and arguments that are unsupported by pertinent
authority, are waived (even where those arguments raise constitutional issues).” (quoting United
States v. Lanzotti, 205 F.3d 951, 957 (7th Cir. 2000))). And even their vagueness challenge to
the maximum caps provision fails on similar grounds because Plaintiffs do not set forth the legal
or factual basis for why they are likely to succeed on this aspect of their claim, and the Court is
not obligated to construct Plaintiffs’ arguments for them. See Nelson v. Napolitano, 657 F.3d
586, 590 (7th Cir. 2011) (the court is not “obliged to research and construct legal arguments for
parties, especially when they are represented by counsel”).
Even so, Plaintiffs have not demonstrated a likelihood of success, for they have not
suggested how the maximum caps provision is impermissibly vague in all its applications.
“[L]aws which regulate persons or entities must give fair notice of conduct that is forbidden or
required.” F.C.C. v. Fox Television Stations, Inc., 567 U.S. 239, 132 S. Ct. 2307, 2317, 183 L.
Ed. 2d 234 (2012). A regulation may be found “impermissibly vague if it fails to define the
offense with sufficient definiteness that ordinary people can understand what conduct is
prohibited and it fails to establish standards to permit enforcement in a nonarbitrary,
nondiscriminatory manner.” Fuller ex rel. Fuller v. Decatur Pub. Sch. Bd. of Educ. Sch. Dist.
61, 251 F.3d 662, 666 (7th Cir. 2001).
In evaluating Plaintiffs’ facial challenge to the maximum caps provision, the Court first
considers “whether the enactment reaches a substantial amount of constitutionally protected
conduct.” Vill. of Hoffman Estates v. Flipside, Hoffman Estates, Inc., 455 U.S. 489, 494, 102 S.
Ct. 1186, 71 L. Ed. 2d 362 (1982). But because the Court has already found that the SHO does
not implicate the First Amendment,12 Plaintiffs’ vagueness challenge survives only if the SHO
“is impermissibly vague in all of its applications.”13 Id. at 495.
The Court notes that, in their amended complaint, Plaintiffs also assert that the SHO infringes on their
right to intimate and expressive association and right to equal protection. But because Plaintiffs did not
develop those claims at the time of the preliminary injunction hearing nor do they connect the issues in
their amended motion and instead have agreed to the Court’s deciding the void for vagueness challenge
without addressing their newly asserted constitutional claims, the Court proceeds to address the due
process challenge under the assumption that it does not reach a substantial amount of constitutionally
In reply, Plaintiffs briefly state that they do not have to show that the SHO is impermissibly vague in all
its applications because the overbreadth of the SHO implicates the First Amendment. But the Court
cannot take into account arguments raised in a reply brief, particularly undeveloped ones concerning
overbreadth, as here. See Dexia Credit Local v. Rogan, 629 F.3d 612, 625 (7th Cir. 2010) (“[A]rguments
The City argues that Plaintiffs cannot show that the SHO is impermissibly vague because
the SHO is an economic regulation that imposes civil penalties for noncompliance. See id. at
498 (“[E]conomic regulation is subject to a less strict vagueness test because its subject matter is
often more narrow, and because businesses, which face economic demands to plan behavior
carefully, can be expected to consult relevant legislation in advance of action.” (footnotes
omitted)). The City also argues that the challenged provisions have not yet gone into effect and
could be further clarified, and, indeed, Plaintiffs indicate that they have sought clarification,
albeit to no avail. See id. (“[T]he regulated enterprise may have the ability to clarify the meaning
of the regulation by its own inquiry, or by resort to an administrative process.”). But even setting
this aside, Plaintiffs’ challenge fails at this stage because they have not provided the Court with
an explanation for why the maximum caps provision is vague in all of its applications.14 Instead,
they themselves make only vague references to the simplicity of the argument and how it needs
raised for the first time in a reply brief are waived.”). Plaintiffs also disclaimed any overbreadth
argument during oral argument on the motion.
Instead of addressing the maximum caps provision during oral argument, Plaintiffs’ counsel focused on
the definition of guest suites in the SHO. The City Council since amended the definition of “guest suite”
to read: “a dwelling unit that is available for rent or for hire for transient occupancy solely by the invitees
or family members of residents of the building which contains the dwelling unit, and is not offered,
advertised or made available for rent or hire to members of the general public.” Doc. 29-2 § 4-6-300(a).
Originally, the definition used the term “guests” instead of “invitees,” which Plaintiffs argued made the
SHO nonsensical because the SHO also used “guest” in the definition of “vacation rental” and “shared
housing unit,” thus making it impossible to determine what the difference was between a “guest suite,”
which was unregulated, and a “vacation rental” or “shared housing unit,” which was regulated. But
regardless of whether the term “guest” or “invitee” is used, Plaintiffs’ argument that the definitional
sections render the SHO void in all its applications fails because, as the City pointed out at the
preliminary injunction hearing and Plaintiffs demonstrate by way of attachments to their amended
complaint, certain condominium or apartment buildings offer guest suites as amenities for their tenants,
which are available only to guests or invitees of residents of the building. See, e.g., Doc. 29-3 at 4–6
(booking page for Eugenie Terrace guest suite, providing that the suite “can only be reserved by current
Eugenie Terrace residents” and that the submission of the form must be made by “a current resident of
Eugenie Terrace whose lease is valid through the requested reservation dates”). As such, these guest
suites are not available for rent to members of the general public, differentiating them from vacation
rentals or shared housing units. The Court rejects Plaintiffs’ argument, made during oral argument, that
sites like Airbnb do not offer listings to the general public because any individual can browse the listings
without having created a profile and those listing may be booked by anyone who creates an Airbnb
no further explanation. But such a conclusory explanation does not suffice to carry Plaintiffs’
burden of demonstrating likelihood of success on the due process claim.15
Irreparable Harm and Inadequate Remedy at Law
Having found that Plaintiffs have not demonstrated a likelihood of success on the merits,
the Court also finds that they have not sufficiently established irreparable harm or an inadequate
remedy at law. Indeed, Plaintiffs’ arguments on these points, at least with respect to their First
Amendment claims (having made no argument on these requirements with respect to their due
process claim), depended on a showing of success on the merits. See ACLU of Ill. v. Alvarez,
679 F.3d 583, 590 (7th Cir. 2012) (“[T]he loss of First Amendment freedoms, for even minimal
periods of time, unquestionably constitutes irreparable injury, and the quantification of injury is
difficult and damages are therefore not an adequate remedy.” (internal quotation marks omitted)
(citations omitted)). Without any additional arguments as to these issues, the Court finds that
Plaintiffs have not made the threshold showing required for issuance of preliminary injunctive
relief. See Winkler v. Eli Lilly & Co., 101 F.3d 1196, 1204 (7th Cir. 1996) (finding it to be an
abuse of discretion to issue an injunction “based on nothing but speculation and conjecture”).
Balance of Hardships
Although the Court need not address the balance of hardships because Plaintiffs have
failed to make the required threshold showing, see Girl Scouts, 549 F.3d at 1086 (“If the court
determines that the moving party has failed to demonstrate any one of these three threshold
requirements, it must deny the injunction.”), the Court finds it prudent to briefly address the
balance of hardships, id. at 1087 (encouraging district court “to conduct at least a cursory
examination” of the balance of hardships where the court “decides that a party moving for a
The Court notes that it raised several vagueness concerns with the SHO with the parties during oral
argument on the preliminary injunction motion. The Court does not address those here, however, as they
are outside the scope of Plaintiffs’ motion.
preliminary injunction has not satisfied one of the threshold requirements,” noting that “[d]oing
so expedites [appellate] review and helps to protect the interests of the parties”). The Court
notes that Plaintiffs again failed to meaningfully develop an argument on the issue, raising
substantive arguments only in their reply brief. Such failure is unacceptable, particularly
because Plaintiffs have the burden of demonstrating an injunction’s necessity. Ind. Forest
Alliance v. McDonald, No. 1:16-cv-03297-JMS-MPB, 2017 WL 131739, at *11 (S.D. Ind. Jan.
13, 2017 (finding plaintiffs would not prevail at the balancing phase where, among other things,
they did not address the effects of an injunction on the public interest). To the extent the balance
of hardships comes into play, using the sliding scale approach, the balance would have to weigh
heavily in Plaintiffs’ favor where the Court has found they are unlikely to succeed on the merits
of their claims. Girl Scouts, 549 F.3d at 1086 (describing sliding scale approach). It is true that,
in First Amendment cases, “if the moving party establishes a likelihood of success on the merits,
the balance of harms normally favors granting preliminary injunctive relief because the public
interest is not harmed by preliminarily enjoining the enforcement of a statute that is probably
unconstitutional.” ACLU of Ill., 679 F.3d at 590; see also Christian Legal Soc’y v. Walker, 453
F.3d 853, 859 (7th Cir. 2006) (“[I]njunctions protecting First Amendment freedoms are always
in the public interest.”). But here, the Court has found that the SHO does not implicate First
Amendment concerns. In reply, Plaintiffs raise concerns of harassment by the City and others
(landlords, neighbors, condominium associations) if hosts lose their anonymity by having to
register and comply with the SHO. The City responds that the affidavits submitted to support
such concerns demonstrate that hosts are already widely recognizable, meaning that claims of
harassment arising from the SHO should not be countenanced and that instead the SHO’s
registration requirements would allow the City to cut down on any claimed harassment issues
and putting into place a more orderly system for the home sharing industry.
The City also maintains that because the SHO imposes commonplace regulations on
business activity and does not restrict speech or social interaction between hosts and guests, any
harm to Plaintiffs in denying the injunction is minimal. The City claims that, on the other hand,
delays in implementation harm the City and the public because the City has a substantial interest
in regulating the short-term rental market, ensuring its safety, and protecting the residential
character of the buildings and neighborhoods in which short-term rentals are occurring. The
delay in implementing the SHO deprives citizens of their elected representatives’ solution to
issues surrounding the emerging short-term rental industry. See Maryland v. King, --- U.S. ----,
133 S. Ct. 1, 3, 183 L. Ed. 2d 667 (2012) (“[A]ny time a State is enjoined by a court from
effectuating statutes enacted by representatives of its people, it suffers a form of irreparable
injury.”). This, the City argues, harms the public interest. Taken together, the arguments before
the Court on the balance of hardships weigh against an injunction.
For the foregoing reasons, the Court denies Plaintiffs’ motion for a preliminary injunction
. To the extent Plaintiffs’ amended motion for a preliminary injunction  seeks an
injunction based on their First Amendment and Fourteenth Amendment due process claims, the
Court denies that portion of the amended motion as well.
Dated: March 13, 2017
SARA L. ELLIS
United States District Judge
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