In a blow not only to Airbnb but to supporters of the Communications Decency Act generally, on November 8, 2016, a federal judge rejected Airbnb’s bid for a preliminary injunction enjoining the City and County of San Francisco from enforcing a new law which made it a misdemeanor for services such as Airbnb and Homeaway to collect a fee for posting a listing not registered with the city. In a sharp departure from a long line of decisions broadly construing CDA immunity, Judge Donato rejected Airbnb’s argument that the law penalized Airbnb for publishing third party content and effectively compelled Airbnb to police its listings and remove offending content. In a statement that stretches the bounds of logic, Judge Donato held that plaintiffs are “perfectly free to publish any listing they get from a host and to collect fees for doing so — whether the unit is lawfully registered or not,” because the law holds plaintiffs liable “only for their own conduct, namely for providing, and collecting a fee for, Booking Services in connection with an unregistered unit.” Judge Donato’s ruling was particularly surprising given that Airbnb’s position was supported by briefs from well-known experts on the CDA, including the Electronic Frontier Foundation, the Center for Democracy and Technology, and respected law professors, Eric Goldman and Eugene Volokh. Although the decision is unlikely to survive on appeal if the case gets that far, for now the decision has blown a huge hole in CDA immunity and dimmed Airbnb’s prospects for avoiding compliance.

Faced with a bitterly disappointing ruling, and with the Board of Supervisors considering a new proposal to limit rentals even more severely by imposing a 60 day per year cap on rentals, on November 14, 2016, Airbnb announced that it had decided to comply with the SF law as part of a mandatory registration system it would craft in cooperation with the city.

The new more conciliatory approach seems to be paying off. On December 8, Mayor Ed Lee vetoed new legislation passed by the Board of Supervisor’s that would have capped rentals at 60 days per year,stating that the new law would make enforcement more difficult and less effective and result in even more illegal rental units.