Following a long and complicated back and forth between the U.S. District Court for the Western District of Washington and the State Supreme Court, the federal district court, in July 2021, granted Seattle’s motion for summary judgment in a case where the plaintiff landlords, supported by a CDIA and PBSA filed a joint amicus, that challenged that city’s fair chance housing law. This decision took an unfortunate turn for this long and winding case. The plaintiffs will appeal the case to the U.S. Court of Appeals for the 9th Circuit.
In granting the City’s motion, the Court looked at Substantive Due Process/Takings and Free Speech.
Substantive Due Process/Takings
The Court rejected the landlords by suggesting that its precedent is too old, too late, and too new.
…after the Washington Supreme Court answered the Court’s certified questions Plaintiffs cited two different U.S. Supreme Court opinions: one that is nearly one-hundred years old, (see Dkt. No. 70 at 4 n.1 (citing Terrace v. Thompson, 263 U.S. 197, 215 (1923)), and another that was decided well after they filed their complaint, (see Dkt. No. 84 (citing Cedar Point Nursery v. Hassid, 141 S. Ct. 2063 (2021)). But the Supreme Court has made clear that “[p]roperty interests are not created by the Constitution, ‘they are created and their dimensions are defined by existing rules or understandings that stem from an independent source such as state law.’” Cleveland Bd. of Educ. v. Loudermill, 470 U.S. 532, 538 (1985) (quoting Bd. of Regents of State Colls. v. Roth, 408 U.S. 564, 577 (1972)). Because the City does not dispute that such a property right exists or that the Ordinance deprives Plaintiffs of that right, the Court assumes without deciding that the Ordinance deprives Plaintiffs of a property right.
On the standard of scrutiny, the Court said that “the City’s actual reasons for enacting the statute are legitimate, and…the Ordinance directly advances those legitimate purposes.” (emphasis original, citations omitted).
After noting how the “Plaintiffs’ theory has shifted over the course of the litigation,” the Court denied the landlords’ Free Speech claims and noted a lack of standing on matters related to current tenants. As to future tenants, the Court said the plaintiff failed to meet its burden where precedent requires them to “demonstrat[e] a realistic danger of sustaining a direct injury as a result of the statute’s operation or enforcement.” (citations omitted). Finding the Free Speech claim is commercial speech with a lower level of scrutiny, Court noted how the case fails the Central Hudson test. Also, in a headline, the Court wrote that “[t]he Ordinance Directly Advances the City’s Interests in Reducing Barriers to Housing for People with Criminal Records and Combatting Racial Discrimination.