Keep Chi. Livable v. City of Chi.

• Decision Date: 14 January 2019
• Docket Number: Nos. 17-1656 & 17-2846,s. 17-1656 & 17-2846
• Citation: 913 F.3d 618
• Parties: KEEP CHICAGO LIVABLE, an Illinois Not-for-Profit Corporation, et al., Plaintiffs-Appellants, v. CITY OF CHICAGO, Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

913 F.3d 618

KEEP CHICAGO LIVABLE, an Illinois Not-for-Profit Corporation, et al., Plaintiffs-Appellants,

v.CITY OF CHICAGO, Defendant-Appellee.

Nos. 17-1656 & 17-2846

United States Court of Appeals, Seventh Circuit.

Argued October 22, 2018

Decided January 14, 2019

Shorge Sato, Attorney, SHOKEN LEGAL, LTD., Chicago, IL, for Plaintiffs-Appellants.

Stephen G. Collins, Attorney, CITY OF CHICAGO LAW DEPARTMENT, Appeals Division, Chicago, IL, for Defendant-Appellee.

Before Flaum, Easterbrook, and Scudder, Circuit Judges.

Scudder, Circuit Judge.

An organization known as Keep Chicago Livable and six individuals challenge the constitutionality of Chicago’s Shared Housing Ordinance. The City passed the Ordinance in 2016 to regulate home-sharing activities, including services offered by companies like Airbnb. The district court denied a request for a preliminary injunction on certain claims and later dismissed without prejudice the remaining claims from an amended complaint. These two appeals then followed. We now vacate the district court’s decisions, as we cannot say with any confidence that any named plaintiff—Keep Chicago Livable or any of the six individuals—has pleaded or otherwise established sufficient injury to confer the subject matter jurisdiction necessary to proceed to the merits of any claim.

We have before us an organization and individuals with strongly-held views about the constitutionality of the City’s Ordinance, but Article III of the Constitution requires more: our authority is limited to deciding cases or controversies between adverse litigants, and without a clear indication that at least one named plaintiff has an actual or imminent injury, we have no authority to go further. So we remand to the district court to make a determination of standing and to proceed if and as appropriate from there.

I

A

Home-sharing websites like Airbnb offer homeowners opportunities to rent their homes on a short-term basis. These online platforms operate as intermediaries by offering owners a forum to advertise their properties, helping prospective renters find rooms and houses for temporary stays, and facilitating rental transactions. In June 2016 the City of Chicago enacted its Shared Housing Ordinance to regulate these short-term housing arrangements. The Ordinance imposes a range of requirements and restrictions, but all that is necessary here is a brief and general overview.

The Ordinance requires interested hosts to register with the City and acquire a business license before listing their units for rent online. The licensing standards bring with them geographic eligibility requirements, restrictions on how many units within a larger building can be rented, and a list of buildings where such rentals are prohibited. Approved hosts are then subject to health, safety, and reporting requirements, including, for example, supplying clean linens and sanitized cooking utensils, disposing of waste and leftover food from host properties, and reporting illegal activity known to have occurred within a rented unit. Failure to comply subjects registered hosts to fines and other penalties, including revocation of their rental license.

B

Keep Chicago Livable, a non-profit organization that focuses on educating home-sharing hosts, and individual plaintiffs challenged the constitutionality of the Ordinance in the district court. In their original complaint, Keep Chicago Livable and its president Benjamin Wolf alleged that the Ordinance violated the First Amendment by impermissibly restraining non-commercial speech as well as by compelling speech through content-based disclosure requirements. The complaint also characterized the Ordinance as "so prolix as to be incomprehensible" and thus void for vagueness under the Due Process Clause.

In February 2017 the City modified portions of the Ordinance, prompting Keep Chicago Livable and Wolf to file an amended complaint. The new complaint added five new individual plaintiffs and new claims alleging that the amended Ordinance offends not only their alleged First Amendment right to intimate and expressive association, but also the Equal Protection Clause by arbitrarily treating shared-housing arrangements differently than guest suite and hotel rentals.

C

Before us are two appeals, which we have consolidated, from two orders entered by the district court. First, in the order leading to appeal No. 17-1656, the district court denied plaintiffs’ motion for a preliminary injunction on their free speech and vagueness claims. The main thrust of the district court’s reasoning was that the Ordinance regulates conduct—in particular, economic activity—not speech. And plaintiffs’ vagueness challenge, the district court determined, was too undeveloped to warrant a preliminary injunction. Second, in the order leading to appeal No. 17-2846, the district court dismissed without prejudice the new claims added by and remaining in plaintiffs’ amended complaint, stating that those claims could be refiled and revisited following this court’s decision on the merits of the claims at issue in the first appeal.

Both parties devote their appellate briefs to debating whether the district court properly denied plaintiffs’ request for a preliminary injunction. For their part, plaintiffs also spill considerable ink on the substance of their remaining claims, which the district court dismissed without prejudice and without addressing their merits. Neither party devoted attention to the threshold issue—federal subject matter jurisdiction—which leads us to vacate the district court’s decisions.

II

Unsure from plaintiffs’ complaints and the district court record whether any named plaintiff had the requisite injury or threat of injury to establish the standing necessary for federal subject matter jurisdiction, we raised the question at oral argument and followed by ordering supplemental briefing. We invited the parties to supply information on the standing of not only each individual named as a plaintiff, but also Keep Chicago Livable as an organization.

A

We begin with the individual plaintiffs. While the amended complaint names six individuals as plaintiffs, the requisite standing inquiry—"an essential and unchanging part of the case-or-controversy requirement of Article III"—proceeds person-by-person. Lujan v. Defenders of Wildlife , 504 U.S. 555, 560, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992). Standing requires a threefold demonstration of "(1) an injury in-fact; (2) fairly traceable to the defendant’s action; and (3) capable of being redressed by a favorable decision from the court." Parvati Corp. v. City of Oak Forest, Ill. , 630 F.3d 512, 516 (7th Cir. 2010) (citing Lujan , 504 U.S. at 560–61, 112 S.Ct. 2130 ). The alleged injury must be not just "concrete and particularized," but also "actual and imminent, not conjectural or hypothetical." Lujan , 504 U.S. at 560, 112 S.Ct. 2130 ; see also Spokeo, Inc. v. Robins , ––– U.S. ––––, 136 S.Ct. 1540, 1547–48, 194 L.Ed.2d 635 (2016).

The necessity of demonstrating and maintaining standing does not subside as litigation proceeds. To the contrary, "standing must be present at all stages of the litigation, including on appeal." Parvati Corp. , 630 F.3d at 516. Or, perhaps more precisely as applied here, the asserted injury in-fact (and thus the requirements of concreteness, particularity, actuality, and imminence) must remain throughout the litigation, lest a case or controversy cease to exist and become moot. See Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc. , 528 U.S. 167, 189, 120 S.Ct. 693, 145 L.Ed.2d 610 (2000) ; see also United States v. Accra Pac, Inc. , 173 F.3d 630, 633 (7th Cir. 1999). The burden of making this showing—of demonstrating the requisite injury to invoke federal jurisdiction—rests with the plaintiff. See Spokeo , 136 S.Ct. at 1547.

Using these standards, we cannot conclude with confidence that any named plaintiff presently has standing. We emphasize that our inquiry focuses on the here and now—standing at the time of these appeals—because meaningful time has passed since the original complaint was filed (in November 2016), and the plaintiffs’ supplemental brief reveals that the passage of time has resulted in changed facts and circumstances for each of the six individuals named as plaintiffs in the amended complaint (filed in February 2017). Here is what we are able to discern:

• Benjamin Wolf served as Keep Chicago Livable’s first president and, as alleged in the original complaint, not only used Airbnb to rent his home in Chicago, but also intended to continue doing so. According to plaintiffs’ supplemental brief, however, Wolf has since sold his property in Chicago and moved to Ohio.

• Susan Maller lives in a Chicago apartment and, as alleged in the amended complaint, was precluded from listing it on Airbnb because of the "harassment of her building’s property manager." Plaintiffs’ supplemental brief does not further explain the harassment and merely states—without any additional allegation—that Maller has "ceased Airbnb operations due to the restrictions of the Shared Housing Ordinance."

• Danielle McCarron once lived in an apartment appearing on the City’s Prohibited Buildings List but has since moved. And, as with Maller, plaintiffs’ supplemental brief summarily says that, because of the City’s Ordinance, she is no longer attempting to participate in Airbnb.

• Antoinette Wonsey lives in Chicago and, according to the amended complaint, is an "Airbnb host manager" who helps guests in her neighborhood find accommodations. Without any particularity, she alleges that she no longer engages in these activities because of the Ordinance.

• Monica Wolf lives in Kentucky but frequently visits Chicago and in the amended complaint alleged that the Ordinance limited her preferred rental options. Plaintiffs’ supplemental brief indicates Wolf has not returned to Chicago, "having been denied full access to all hosts who would otherwise list on Airbnb."

• John Doe is a

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