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WBK Industry News - Litigation Developments

Judge Rules that Seattle Cannot Require Landlords to Rent to First Qualified Applicants

A trial judge in King County Washington Superior Court recently ruled that the City of Seattle may not enforce a “first in time” law, which required landlords to rent their property to the first qualified applicant, even if the landlord had good reason to select another applicant.  Seattle’s city council passed the law in 2016, in an effort to “eliminat[e] the role of implicit bias in tenancy decisions.”  Rental housing owners vehemently opposed the law because it prevented them from exercising their personal discretion when deciding between potential tenants “based on factors unrelated to” a potential tenant’s membership in “a protected class.”

The Plaintiff rental housing owners claimed that the rule violated the Washington state constitution by: (1) taking their property without compensation; (2) taking their property for an improper public use; (3) violating their right to substantive due process; and (4) violating their free speech rights.  The court agreed.

The court cited Washington Supreme Court precedent, ruling that “an owner’s right to sell a property interest to whom he or she chooses is a fundamental attribute of property ownership, which cannot be taken without due process and payment of just compensation.”  It opined that the “first in time” law’s few concessions to landlord interests did not redeem the import of its provisions.  Allowing landlords to set their own rental criteria was not a worthy substitute for the discretion to choose a specific tenant.  Further, the court noted that several key elements of the “right to freely dispose of property”—such as the ability to negotiate—were destroyed by the “first in time” law.

The court found that the “first in time” law was a “private use taking,” because it “took the right to freely dispose of property and handed a corollary right of first refusal to the tenants.”  Although the regulation was aimed at achieving a legitimate public purpose, it did not use means reasonably necessary to achieving that purpose.  The court wrote that the City could not enforce a law which had no “meaningful limiting principle,” and asserted that the “first in time” law was overbroad and unduly oppressive because it severely restricted business practices and “bypasse[d] less oppressive alternatives for addressing unconscious bias.”

Additionally, the court found that the “first in time” regulation violated landlords’ speech rights by prohibiting advertisements based on content and dictating the manner in which landlords could advertise.  Because the speech restriction did not “directly and materially” advance the city’s interest in stopping discrimination and it “restrict[ed] more speech than necessary,” the court found that it failed the U.S. Supreme Court’s four-part test for commercial speech.

The case is Yim et al. v. City of Seattle, No. 17-2-05595-6 SEA (Wash. King Cty.Ct. Mar. 28, 2018).