HomeAway.com, Inc. v. City of New York

Background

HomeAway challenged New York City Local Law 146, which required home-sharing platforms to provide the Mayor’s Office of Special Enforcement with extensive monthly data about New York City listings, hosts, transactions, fees, and payment information. The ordinance required reporting even without a specific reason to suspect a legal violation and imposed civil penalties for incomplete or inaccurate reports.

HomeAway argued that the ordinance violated the Fourth Amendment, the First Amendment, and the Stored Communications Act. In January 2019, the court granted a preliminary injunction. The court found that HomeAway was likely to succeed on its Fourth Amendment challenge because the ordinance required a sweeping, untailored production of user data and lacked a neutral process for challenging the reporting demand before compliance was due. The court did not find that HomeAway was likely to prevail on its First Amendment or Stored Communications Act claims.

The injunction prevented the ordinance from taking effect. While the case was proceeding through discovery and preparation for summary judgment, the City adopted a substantially narrower ordinance. The amended law required data about listings that appeared likely to violate multiple-dwelling laws, eliminated some categories of information, and changed reporting from monthly to quarterly. The City and HomeAway then asked the court to dismiss the challenge as moot, and the court did so on October 7, 2020.

Fee application

HomeAway sought $1,471,883.20 in attorneys’ fees and $30,467.50 in costs under the Civil Rights Attorney’s Fees Award Act, 42 U.S.C. § 1988. The City argued that HomeAway was not a prevailing party, that an award would be unjust, and that the requested hours, rates, and costs were excessive.

The court rejected the City’s argument that HomeAway could not prevail because it never obtained a permanent injunction or final merits judgment. Under the court’s analysis, a plaintiff that obtains a preliminary injunction based substantially on the merits may qualify as a prevailing party even if later legislative changes make the case moot. The court concluded that the injunction protected HomeAway’s Fourth Amendment rights for more than 18 months and was never reversed or dissolved. The City’s replacement of Local Law 146 with a narrower law also addressed the features that had led the court to find the original ordinance likely unconstitutional.

The court also rejected the City’s arguments that HomeAway had merely followed Airbnb’s lead or had forfeited its privacy interest by disclosing some user information in business contexts. The court found that HomeAway made meaningful contributions to the litigation, including work responding to the City’s discovery demands, and that disclosure of some data did not eliminate its ability to challenge the City’s much broader demand.

Calculation of the award

The court used the lodestar method, which calculates a presumptively reasonable fee by multiplying reasonable hours by reasonable hourly rates. It excluded 56.2 hours for unrelated matters, lobbying work, and the abandoned First Amendment argument. It then reduced the remaining hours by 25% overall to account for duplicative work with Airbnb and, during the later phase, top-heavy staffing.

The court approved hourly rates of $650 for Kristin Linsley, $600 for Mylan Denerstein, $500 for Joshua Dick, $400 for Alexander Harris and Jacob Spencer, $375 for Patrick Hayden, $300 for Debbie Jang, Zachary Piaker, and Anthony Bedel, and $150 for legal assistants and support staff. The resulting attorneys’ fee award was $567,511.88.

The court awarded $27,497.81 in costs. It excluded $2,969.69 in travel and related expenses that appeared connected to an unrelated proceeding, but allowed the remaining requested costs, including travel expenses for attorneys whose experience with HomeAway and home-sharing regulation supported their participation in the case.

Disposition

Judge Paul A. Engelmayer held that HomeAway was a prevailing party and was entitled to reasonable fees and costs under Section 1988. The court awarded HomeAway $595,009.69, consisting of $567,511.88 in attorneys’ fees and $27,497.81 in costs, terminated the fee motion, and closed the case.