A federal appeals court has ordered a Nevada judge to narrow an injunction that had effectively halted Clark County’s regulation of short-term rentals for nearly a year. The 9th U.S. Circuit Court of Appeals issued an order on Wednesday, directing the District Court to revise the injunction to help Clark County implement a "functioning license regime." The appeals court noted that the previous injunction was "unnecessarily broad," leading to an environment where unlicensed short-term rentals could operate without oversight.
The appeals court's memo, released last week, stated that while an injunction was appropriate, its terms had allowed individuals throughout the county, including those not involved in the lawsuit and those who had never applied, to operate short-term rentals without licenses. This broad scope has prevented the county from effectively managing its short-term rental landscape.
The ruling stems from a lawsuit filed last year by a coalition that includes the Greater Las Vegas Short-Term Rental Association and Airbnb. This coalition challenged Clark County’s short-term rental regulations, asserting that the county did not provide adequate methods for property owners to apply for licenses, which subsequently led to fines and liens against some properties. In December, District Court Judge Miranda Du had granted a preliminary injunction on certain regulations, an order which the county later appealed.
The appeals court indicated that the plaintiffs are "likely to succeed on the merits of their procedural due process claim," noting that they have demonstrated Clark County interfered with a protected property interest without providing constitutionally sufficient procedures. This finding supports the plaintiffs' core argument regarding the county's handling of the licensing process.
Both Clark County and the Greater Las Vegas Short-Term Rental Association have responded favorably to the appeals court's decision. Clark County, in a statement, expressed that narrowing the injunction would enable it to enforce laws against short-term rentals that disrupt communities and harm quality of life. The county also noted that the County Commission is expected to consider an amendment to its short-term rental ordinance, with an agenda item potentially discussed as early as Oct. 20.
Jackie Flores, founder of the Greater Las Vegas Short-Term Rental Association, described the ruling as a significant victory for property owners. Flores emphasized the court’s acknowledgment that not only are they likely to succeed in their legal challenge, but more importantly, that property owners possess a "protected property interest in leasing their residences on a short-term basis."
The appeals court’s memo further suggested that an appropriate injunction must ensure plaintiffs have a chance to apply for a license and have their applications processed within a reasonable timeframe. Clark County attorneys had previously proposed reinstituting a licensing process in exchange for a more focused injunction. The court's memo offered an example, suggesting the injunction might order Clark County to reopen the application portal and specify a timeframe. The court also added that if Clark County proves unable to process applications, plaintiffs could seek remedies such as holding the county in contempt to ensure compliance with a narrower injunction.
This development could mark a significant step towards re-establishing a regulated short-term rental market in Clark County, addressing concerns from both the county regarding enforcement and from property owners regarding due process in licensing.
