City of Portland v. HomeAway.com, Inc.

240 F. Supp. 3d 1099, 2017 WL 945020, 2017 U.S. Dist. LEXIS 34587
CourtDistrict Court, D. Oregon
DecidedMarch 9, 2017
DocketNo. 3:15-cv-01984-MO
StatusPublished

This text of 240 F. Supp. 3d 1099 (City of Portland v. HomeAway.com, Inc.) is published on Counsel Stack Legal Research, covering District Court, D. Oregon primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
City of Portland v. HomeAway.com, Inc., 240 F. Supp. 3d 1099, 2017 WL 945020, 2017 U.S. Dist. LEXIS 34587 (D. Or. 2017).

Opinion

OPINION AND ORDER

MICHAEL W. MOSMAN, Chief United States District Judge :

Plaintiff City of Portland (“the City”) sued Defendants HomeAway.com, Inc. and HomeAway, Inc. (collectively “HomeA-way”) for failure to comply, with various provisions of the Portland City Code collectively known as the “Transient Lodgings Tax.” After I dismissed its original Complaint [1], the City filed an Amended Complaint [34], which HomeAway' now moves to dismiss. For the reasons set forth below, HomeAway’s Motion to Dismiss for Failure to State a Claim [37] is GRANTED in part and DENIED in part.

BACKGROUND

HomeAway operates an online vacation rental marketplace where people interested in making their homes available for short-term rental may advertise their property. Travelers interested in renting a property can access HomeAway’s websites to search for and find available properties. HomeAway puts the traveler in contact with the owner or lessee of the property to sort out the details of the lodging arrangement. HomeAway has property listings located all over the world, including in Portland.

In 1972, the City enacted a Transient Lodgings Tax Ordinance, Portland City Code (“PCC”) § 6.04.010, et seq. (“the Ordinance”), providing in part that “[e]very [hotel] operator renting rooms or space for lodging or sleeping purposes in this City ,.. shall collect a tax from the transient” to be remitted to the City. PCC § 6.04.030(A) (2015). The Ordinance applies to hotel “Operators,” defined by the Ordinance as “the person who is proprietor of the hotel in any capacity. Where the operator performs his/her functions through a managing agent of any type or character other than an employee, the managing agent shall also be deemed an operator....” PCC § 6.04.010(M), The Ordinance authorizes the City to levy fines against Operators that do not comply with the Ordinance. See, e.g., PCC § 6.04.170.

On January 21, 2015, the Portland City Council passed amendments to the Ordinance that took effect on February 20, 2015.1 The apparent goal of the City Council in passing the amendments was to extend the Ordinance to cover “Booking Agents.” The Ordinance defines “Booking Agent” as “an Operator or any person that provides a means through which a Host may offer a Short-Term Rental for transient lodging occupancy. This service is usually, though not necessarily, provided through an online platform and generally allows a Host to advertise the Short-Term Rental through a website.... ” PCC § 6.04.010(D). The Ordinance expressly lists “[o]nline travel booking sites” as examples of “Booking Agents.” Id.

After the City Council passed the-2015 amendments to the Ordinance, the City [1103]*1103sent HomeAway notices in which the City contended that HomeAway was in violation of various provisions of the Ordinance. Included in these notices was an assessment of $2,540,106 in presumptive taxes, penalties, and interest. HomeAway refused to pay the assessment, claiming it was not in violation of the Ordinance because it was not an Operator or Booking Agent and therefore did not fall under the Ordinance’s terms. On October 21, 2015, the City filed this lawsuit against HomeAway seeking a declaratory judgment that HomeAway is an Operator or a Booking Agent, a reduction of fines to judgment, a reduction of presumptive taxes to judgment, and an injunction enjoining HomeA-way’s operations in Portland.

PROCEDURAL HISTORY

On May 17, 2016, I held oral argument on HomeAway’s first Motion to Dismiss [7]. From the bench [28], I GRANTED HomeAway’s motion and DENIED the City’s request for injunctive relief. I later provided an Opinion and Order [29] clarifying my rulings. In my' Opinion and Order, I held that: (1) the City had not sufficiently alleged that HomeAway is an Operator under the Ordinance; (2) the Portland City Charter (“the Charter”) does not grant the City authority to impose tax collection obligations on Booking Agents; (3) the City had not sufficiently alleged that HomeAway falls under the City’s authority to impose tax collection obligations on Booking Agents under the relevant Oregon state statutes; and (4) the Ordinance does not impose any regulatory duties or responsibilities on HomeAway as a Booking Agent. I dismissed the Complaint but granted leave to amend.

On July 11, 2016, the City filed its Amended Complaint [34]. ■ HomeAway moves to dismiss the Amended Complaint for failure to state a claim. I held oral argument on the current motion on, December 16, 2016.

LEGAL STANDARD

When reviewing a motion to dismiss, the court must “accept-áll factual'allegations in the complaint as true and construe "the pleadings in the light most favorable to the nonmoving party.” Knievel v. ESPN, 393 F.3d 1068, 1072 (9th Cir. 2005). A court need not accept legal conclusions as true because “[t]hreadbare recitals of. the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). To survive a motion to dismiss for failure to state a claim under Federal Rule, of Civil Procedure 12(b)(6), “a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Id. (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). A pleading that offers only,“labels and conclusions” or “ ‘naked assertion^]’ devoid of ‘further factual enhancement’” will not suffice. Id. (quoting Twombly, 550 U.S. at 555, 557, 127 S.Ct. 1955). While a plaintiff does not need to make detailed factual allegations at the pleading stage, the allegations must be sufficiently specific to give the defendant “fair notice” of the claim and the grounds on which it rests. See Erickson v. Pardus, 551 U.S. 89, 93, 127 S.Ct. 2197, 167 L.Ed.2d 1081 (2007) (per curiam) (citing Twombly, 560 U.S. at 555, 127 S.Ct. 1955).

Federal. Rule of Civil Procedure 15 provides that a court should freely give leave to amend a complaint “when justice so requires.” Fed. R. Civ. P. 15(2). As such, when a court dismisses a complaint for failure to state a claim, “leave to amend should be granted ‘unless the court determines that the allegation of other facts consistent with the challenged pleading could not possibly cure the, deficiency.’” DeSoto v. Yellow Freight Sys., Inc., 957 [1104]*1104F.2d 655, 658 (9th Cir. 1992) (quoting Schreiber Distrib. Co. v. Serv-Well Furniture Co., 806 F.2d 1393, 1401 (9th Cir. 1986)). If amendment would be futile, the court need not grant leave to amend. Id.

DISCUSSION

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Bluebook (online)
240 F. Supp. 3d 1099, 2017 WL 945020, 2017 U.S. Dist. LEXIS 34587, Counsel Stack Legal Research, https://law.counselstack.com/opinion/city-of-portland-v-homeawaycom-inc-ord-2017.