SAN FRANCISCO – A federal court judge has denied a motion filed by Airbnb Inc. of San Francisco that seeks to have a local ordinance overturned on the grounds it violates the company’s rights to certain First Amendment protections.

U.S. District Court for the Northern District of California Judge James Donato’s decision effectively allows a law to stand that required the rapidly rising home-rental company to block or remove any host from its listings that haven’t previously registered with the city. It carries a fine of up to $1,000 per day for those found to be still offering bookings on short-term rentals after it is slated to officially go into effect in December.

The judge set Nov. 17 for the next hearing on the matter, further instructing city officials to hold off on enforcing any part of his order until that juncture. Meanwhile, he added all other challenges to the law slated to be heard before then will be allowed to move forward unabated.

“The thing is, two years ago Airbnb worked on the details that required registration,” David Campos, the state supervisor who introduced legislation back in June with the support of fellow Supervisor Aaron Peskin, told the Northern California Record. “Two years later, what we found is that is not what’s been happening and there were no consequences.”

Along with Homeaway.com Inc., Airbnb filed suit against the city earlier this year alleging that the new regulations violate free speech protections outlined by the Communications Decency Act, part of which safeguards internet companies from being liable for most user-generated content.

Throughout the proceedings, lawyers for the two plaintiffs insisted that information found in rental listings comes solely from third-party users, thus completely absolving their clients of any responsibility.

In rendering his verdict, Donato countered that the San Francisco law only "regulates plaintiffs' own conduct as booking service providers and cares not a whit about what is or is not featured on their websites."

Offering an array of listings centered on lodging and transportation accommodations, Airbnb now boasts a database of more than 2 million listings in more than 200 countries, all of which were amassed over just the last eight years. 

As recently as in March, only 25 percent of the city’s roughly 7,000 Airbnb hosts were registered with the state. Lawmakers from across the country are thought to be paying close attention to the ongoing litigation in San Francisco, hoping it offers some platform for how to best regulate the burgeoning industry. 

“More than anything else we want to provide more oversight and make sure whoever is doing this is on the up and up,” Campos said. “In San Francisco, the law assures the protection of housing stock. Thousands of units are now being lost to Airbnb with many renting entire units that should be going to people who want to live in the city.”

California lawmakers passed a law in 2014 making Airbnb a legal entity, but since then a growing number of city officials have sought to gain greater control of an enterprise they contend has made for a tighter housing market by making the world of short-term rentals so pervasive.

In 2015, state officials began capping the number of days residents could rent out their homes over the course of a calendar year.

In the past, Airbnb officials have expressed a willingness to work with city officials in arriving at a compromise solution, though Campos seems to question the sincerity of the offer.

“That’s easy to say,” he said. “If they (are) really serious about that, they would drop their lawsuit against the city.”

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