Zillow, Inc. v. Bork
| Decision Date | 23 March 2022 |
| Docket Number | Civil No. 3:19-cv-00049-GFVT |
| Citation | 593 F.Supp.3d 619 |
| Parties | ZILLOW, INC., Plaintiff, v. Daniel P. BORK, et al., Defendants. |
| Court | U.S. District Court — Eastern District of Kentucky |
Darren W. Ford, James Stephen Smith, John C. Greiner, Pro Hac Vice, Kellie A. Kulka, Pro Hac Vice, Graydon, Head & Ritchey, LLP, Ft. Mitchell, KY, for Plaintiff.
Laura Crittenden Tipton, Taylor Payne, Office of the Governor, Richard W. Bertelson, III, Kentucky Department of Revenue Office of Legal Services, Nicole Sergent Biddle, Attorney General's Office, Frankfort, KY, for Defendants Daniel P. Bork, Brad McDowell, Jason Scriber, Blake Robertson, Jill M. Mahoney, Jason Neely.
Richard W. Bertelson, III, Kentucky Department of Revenue Office of Legal Services, Taylor Payne, Office of the Governor, Nicole Sergent Biddle, Attorney General's Office, Frankfort, KY, for Defendant Kellie Lang.
In recent years, Zillow has transcended its identity as a housing services brand and achieved social media stardom. "Zillow Surfing" has become a popular alternative form of social media and the brand inspired a viral Twitter account reviewing its most intriguing listings.1 But to provide its services, be they for entertainment or practical use, Zillow relies on publicly available information. This case arises from Zillow's attempts to obtain tax roll files from six Kentucky counties. Each of those counties informed Zillow it would have to pay an increased cost, pursuant to a state statute, because it was using the files for commercial purposes. Zillow then brought this action alleging this practice and the statutory scheme allowing it violate its rights to free speech and equal protection under the First and Fourteenth Amendments. The parties filed cross-motions for summary judgment and the matter is now ripe for review. [R. 60; R. 61.]
Zillow challenges two distinctions included in these statutes. The first distinguishes between whether a party is requesting open records for a commercial or non-commercial purpose and imposes a higher fee on commercial purpose requesters. The second distinction states that newspapers are not to be considered commercial purpose requesters, even if they meet the statutory definition. As explained below, the Court finds the former distinction is constitutional, but the latter violates Zillow's rights to free speech and equal protection. Consequently, the Court will GRANT in part and DENY in part each party's Motion.
Zillow is a publicly traded company which owns several "brands focus[ed] on all stages of the home lifecycle." [R. 1 at 6.] Its "most well-known brand" is Zillow.com, a database of properties across the country which lists information about the property and a "Zestimate" of the property's value. Id. at 6-7. Zillow receives this information by requesting tax roll files (tax roll, tax assessment, and tax appraisal files) from local Property Value Administrators. Id. In 2019, Zillow requested these files from PVAs in Shelby, Franklin, Henry, Owen, Trimble, and Clark Counties. [R. 60-7.] Each asked Zillow to pay a "commercial purpose" fee in order to access the files. [R. 60-8.]
County PVAs are permitted to charge a "commercial purpose" fee pursuant to Kentucky's open records statutory scheme. Kentucky's Open Records Act, KRS § 61.872, grants Kentucky residents the right to inspect any "public record," subject to some exceptions. KRS § 133.047 mandates property tax rolls be maintained as "an open public record" for five years. Pursuant to KRS § 61.874, if a requester is seeking records for "commercial or business purposes," they can be charged a "reasonable fee" to compensate for the "cost of personnel time." KRS § 133.047(4)(b). The Department of Revenue is directed to assist PVAs in developing "a reasonable fee schedule." Id. These fees can be based on (1) the cost of the media, processing, or staff required to make a copy of the record, and/or (2) the cost of the creation, purchase, or acquisition of the record. KRS § 61.874(4)(c). Non-commercial requesters may also be subject to a "reasonable fee," but that fee cannot exceed the actual cost of reproduction, not including the cost of necessary staff. Id. at (3).
A request is for a "commercial purpose" if the record will be directly or indirectly used "for sale, resale, solicitation, rent, or lease" or any other use the requester expects will result in a profit. KRS § 61.870(4)(a). However, use by newspapers, periodicals, radio and television stations in news or informational programs, or in prosecution or defense of litigation is not considered a commercial purpose, even if those requesters expect to profit from their use. KRS § 61.870(4)(b). Commercial users can also be required to state the purpose of their request and "enter a contract with the agency" permitting use of the record for that stated purpose. KRS § 61.874(4)(b).2
When Zillow requested tax roll files from the PVAs, each deemed Zillow a commercial user and asked it to pay the commercial fee, while some asked it to agree to a commercial user contract. [R. 60-8.] Zillow brought this action in response, claiming the commercial purpose fee statutes are unconstitutional facially and as-applied under the First and Fourteenth Amendments. [R. 1.] The Court previously denied the PVAs' Motion to Dismiss.3 [R. 29.] The parties then engaged in discovery and have filed cross-motions for summary judgment, which are ripe for review. [R. 60; R. 61.]
Zillow brings facial and as-applied challenges to the commercial purpose fee statutes under the First and Fourteenth Amendments. [R. 1 at 22-31.] A successful facial challenge shows that a regulation would be valid in no set of circumstances. Ohio Council 8 AFSCME v. Brunner , 912 F. Supp. 2d 556, 561 (2012) (citations omitted). This standard is lower when a regulation allegedly violates a challenger's right to free speech, as the First Amendment gives " ‘the benefit of any doubt to protecting rather than stifling speech.’ " Id. (quoting Citizens United , 130 S. Ct. at 891 ). A regulation restricting free speech is facially invalid if a " ‘substantial number’ " of its applications are unconstitutional. Id. (quoting United States v. Stevens , 559 U.S. 460, 473, 130 S.Ct. 1577, 176 L.Ed.2d 435 (2010) ). If a court finds a challenged regulation is facially unconstitutional, it need not address any additional as-applied challenge. See Liberty Coins, LLC v. Goodman , 880 F.3d 274, 291 (6th Cir. 2018). The Court will address each of Zillow's claims in turn, first resolving its facial challenges.
Zillow first claims the commercial purpose fee statutes violate its right to free speech. [R. 61 at 15-24.] The First Amendment protects the American public's right to freedom of speech. U.S. CONST. amend. I. This right extends to corporations. First Nat'l Bank v. Bellotti , 435 U.S. 765, 784, 98 S.Ct. 1407, 55 L.Ed.2d 707 (1978). Naturally, for a party to invoke the First Amendment, a government entity must have somehow abridged their speech. The first issue that must be resolved is whether Zillow's requests for tax roll files from the PVAs constitute speech.
The PVAs argue that access to government records does not constitute speech, as access to information is distinct from use and communication of information. [R. 61 at 12-14.] Zillow claims that once a government allows the public to access information, limits on that access are bound by the First Amendment. [R. 61 at 15-16; R. 64 at 8-10.] Generally, actual speech and symbolic or expressive conduct are protected by the First Amendment. Virginia v. Black , 538 U.S. 343, 358, 123 S.Ct. 1536, 155 L.Ed.2d 535 (2003). This Court previously recognized Zillow's claim that access to government records constitutes protected speech is a "novel theory." [R. 29 at 5.] However, the claim is not unprecedented. Two Supreme Court cases address access to information in the free speech context. The parties' disagreement over whether the commercial purpose fee statutes violate the First Amendment is largely focused on those decisions.
The Supreme Court was first presented with a California statute allowing "public access to arrestees' addresses," but requiring requesters to certify they were obtaining the information for one of five specified purposes. L.A. Police Dep't v. United Reporting Publ'g Corp. , 528 U.S. 32, 34, 120 S.Ct. 483, 145 L.Ed.2d 451 (1999). United Reporting believed the statute was unconstitutional and asked for declaratory and injunctive relief before the statute became effective. Id. at 36, 120 S.Ct. 483. The Court held that United Reporting could not pursue facial invalidation of the statute because facially , the statute merely regulated access to information in the government's hands, which is permissible. Id. at 40, 120 S.Ct. 483. However, two concurrences, joined by a total of six Justices, expressed limitations on the Court's ruling. Justice Scalia clarified that the Court was not deciding whether a restriction allowing access to some but not all parties would be "in reality a restriction upon speech." Id. at 41-42, 120 S.Ct. 483 (Scalia, J., concurring). Justice Ginsburg stated a government can decide how to distribute information to the public, so long as that decision was "not based on an illegitimate criterion such as viewpoint." Id. at 43, 120 S.Ct. 483 (Ginsburg, J., concurring). The PVAs argue, and the Court recognizes, that these statements are not binding precedent. [R. 63 at 4.] However, in the absence of more definitive guidance applicable to this matter, these concurrences are persuasive. See EMWomen's Surgical Ctr., P.S.C. v. Friedlander , 978 F.3d 418, 457 (2020).
A similar issue arose in Sorrell . Sorrell v. IMS Health Inc. , 564 U.S. 552, 557, 131 S.Ct. 2653, 180 L.Ed.2d 544 (2011). A Vermont statute prevented the sale of doctors' prescribing practices, with exceptions such as sale...
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