WEBVTT 00:00:00.000 --> 00:00:02.120 The real estate board of New York, the city of 00:00:02.120 --> 00:00:20.719 New York. Thank you Judge Livingston and may 00:00:20.719 --> 00:00:22.579 it please the court, Sean Morata on behalf of 00:00:22.579 --> 00:00:25.500 the plaintiff's appellants. We have two claims, 00:00:25.559 --> 00:00:27.280 one under the First Amendment and one under the 00:00:27.280 --> 00:00:29.140 Contracts Clause and I'll take them in that order. 00:00:29.660 --> 00:00:31.879 On the First Amendment claim comes down to two 00:00:31.879 --> 00:00:33.960 principles, which when accepted make the rest 00:00:33.960 --> 00:00:36.219 of the First Amendment analysis follow up pretty 00:00:36.219 --> 00:00:39.039 easily. First, it is illegal in the city of New 00:00:39.039 --> 00:00:41.640 York under the Fair Act to offer tenant pay brokerage 00:00:41.640 --> 00:00:44.299 services. The only thing that is illegal under 00:00:44.299 --> 00:00:46.840 the Fair Act is advertising those tenant pay 00:00:46.840 --> 00:00:49.119 brokerage services in connection with particular 00:00:49.119 --> 00:00:52.579 apartments. Second, a broker advertising an apartment 00:00:52.579 --> 00:00:55.060 with a landlord's permission is not an agent, 00:00:55.399 --> 00:00:58.140 is not an employee, and is not a fiduciary or 00:00:58.140 --> 00:01:00.799 otherwise working on the landlord's behalf. Rather, 00:01:00.960 --> 00:01:03.479 an agent who advertises a listing with a landlord's 00:01:03.479 --> 00:01:06.000 permission is merely advertising a listing with 00:01:06.000 --> 00:01:08.939 a landlord's permission. That gives lie to the 00:01:08.939 --> 00:01:12.140 city's tenant claim that tenant pay open listing 00:01:12.140 --> 00:01:14.620 brokers are merely landlord's brokers by a different 00:01:14.620 --> 00:01:18.400 name. Tying that to the legal principles. First, 00:01:18.560 --> 00:01:21.239 under Sorrell, under 44 Liquor Mart, under Virginia 00:01:21.239 --> 00:01:24.370 Board of Pharmacy, you can't, if you... you cannot 00:01:24.370 --> 00:01:27.849 achieve non -speech goals by suppression of truthful, 00:01:28.090 --> 00:01:30.650 non -misleading speech regarding legal services. 00:01:31.969 --> 00:01:34.189 Second, if you can achieve the government's goals 00:01:34.189 --> 00:01:36.670 without burdening speech, then you have to do 00:01:36.670 --> 00:01:40.730 so. You can't use speech as your proxy. And that 00:01:40.730 --> 00:01:42.730 ties into the three goals that the government 00:01:42.730 --> 00:01:44.829 has put forward at various points with respect 00:01:44.829 --> 00:01:47.950 to the Fair Act. The first goal they've put forward 00:01:47.950 --> 00:01:49.969 in the committee report is aligning the principal 00:01:49.969 --> 00:01:52.829 -agent relationship. But you could do that without 00:01:52.829 --> 00:01:55.390 burdening speech by simply requiring, as the 00:01:55.390 --> 00:01:58.069 Fair Act originally did, by requiring that the 00:01:58.069 --> 00:02:02.129 party who hires the broker pay the broker. Second, 00:02:02.689 --> 00:02:04.909 they've advanced, I think mostly in litigation, 00:02:05.650 --> 00:02:08.349 an interest in tenant mobility, allowing tenants 00:02:08.349 --> 00:02:10.810 more easily move from one apartment to the other. 00:02:12.729 --> 00:02:16.590 But they achieve that goal, at least even arguably. 00:02:17.039 --> 00:02:19.539 Only by presuming that what they have done is 00:02:19.539 --> 00:02:21.620 they have barred tenant pay brokerage services, 00:02:21.620 --> 00:02:25.479 but they have it the tenant mobility Issue is 00:02:25.479 --> 00:02:29.039 mostly in litigation, but I thought that I mean 00:02:29.039 --> 00:02:32.219 the bill sponsor and several council members 00:02:32.219 --> 00:02:34.360 when I look at the record and help me understand 00:02:34.360 --> 00:02:37.080 it if I'm missing something talked about increasing 00:02:37.080 --> 00:02:40.060 housing mobility and there were advocacy groups 00:02:40.060 --> 00:02:43.020 that Address the subject and submitted evidence 00:02:43.020 --> 00:02:46.169 before the council Right, so there was a lot 00:02:46.169 --> 00:02:48.409 of discussion about mobility, but I think there's 00:02:48.409 --> 00:02:50.550 two problems. One, of course, individual statements 00:02:50.550 --> 00:02:52.569 of various council members don't represent the 00:02:52.569 --> 00:02:54.530 view of the council. I think the view of the 00:02:54.530 --> 00:02:56.229 council is the one that's in the committee report, 00:02:56.310 --> 00:02:58.530 which says, we are trying to align the principal 00:02:58.530 --> 00:03:00.689 agent relationship. But the second answer, Judge 00:03:00.689 --> 00:03:02.830 Livingston, is even if you accept there's mobility 00:03:02.830 --> 00:03:05.389 interest, you don't solve it by banning speech. 00:03:06.509 --> 00:03:08.849 Because remember, they haven't barred tenant 00:03:08.849 --> 00:03:10.849 pay brokerage services. They've only said you 00:03:10.849 --> 00:03:13.349 can't advertise it. And what the lesson from 00:03:13.349 --> 00:03:15.789 Sorrell is, is that even if you have an interest, 00:03:15.969 --> 00:03:18.229 an important interest in trying to make things 00:03:18.229 --> 00:03:21.289 more affordable, you can't do that by banning 00:03:21.289 --> 00:03:23.110 the speech at the side of the debate that you 00:03:23.110 --> 00:03:25.550 think is making it more expensive. So in Sorrell, 00:03:25.669 --> 00:03:28.050 the accusation was that if we allow these detailers 00:03:28.050 --> 00:03:30.550 to go out armed with prescribing information, 00:03:30.930 --> 00:03:33.750 they're going to talk doctors into prescribing 00:03:33.750 --> 00:03:36.629 very expensive brand name drugs instead of cheaper, 00:03:36.849 --> 00:03:39.080 just as effective, generic drugs. And they said, 00:03:39.180 --> 00:03:41.060 the way we're going to bring down prices is we're 00:03:41.060 --> 00:03:44.680 going to take away your ability to be armed with 00:03:44.680 --> 00:03:47.080 this prescribing data. And what the Supreme Court 00:03:47.080 --> 00:03:50.020 said was, you can't do that. If you want to try 00:03:50.020 --> 00:03:52.180 to address the problem of high brand, you know, 00:03:52.319 --> 00:03:54.680 prescribers prescribing high price brand name 00:03:54.680 --> 00:03:57.199 drugs, you can do that. But you can't do it by 00:03:57.199 --> 00:03:59.080 disarming the speech of one side of the debate. 00:03:59.439 --> 00:04:01.639 That's what they're doing here. The city is saying 00:04:01.639 --> 00:04:05.159 we don't like tenant pay. open listing brokers, 00:04:05.439 --> 00:04:07.500 and therefore we're going to take away their 00:04:07.500 --> 00:04:09.860 ability to advertise their services on places 00:04:09.860 --> 00:04:12.180 like Street Easy. You can still go to a broker, 00:04:12.419 --> 00:04:14.120 and a broker can still say, I'm going to show 00:04:14.120 --> 00:04:16.339 you some apartments, but by the way, you're going 00:04:16.339 --> 00:04:19.920 to have to pay me to do that. But the other side 00:04:19.920 --> 00:04:21.639 of the debate, the land... It doesn't prohibit 00:04:21.639 --> 00:04:24.519 the advertisement. I mean, it burdens the advertisement, 00:04:24.560 --> 00:04:28.379 and that may be enough to bring this within First 00:04:28.379 --> 00:04:30.860 Amendment scrutiny, but... But you can still 00:04:30.860 --> 00:04:32.959 go ahead and advertise. You just can't get a 00:04:32.959 --> 00:04:36.459 fee from a tenant after you do so. But what you 00:04:36.459 --> 00:04:38.779 can't advertise is the perfectly legal service 00:04:38.779 --> 00:04:41.360 of a tenant pay broker. So it's like saying, 00:04:41.540 --> 00:04:44.759 for instance, you can advertise as an attorney. 00:04:44.899 --> 00:04:46.879 But if you advertise as an attorney, you can't 00:04:46.879 --> 00:04:49.500 collect a contingency fee from a plaintiff. Well, 00:04:49.579 --> 00:04:51.480 you can still practice as an attorney, I guess. 00:04:51.540 --> 00:04:53.100 But of course, what you've done is you've shut 00:04:53.100 --> 00:04:55.560 down the perfectly legal practice of being a 00:04:55.560 --> 00:04:58.439 contingency fee plaintiff's attorney. So I agree 00:04:58.439 --> 00:05:00.740 with you, it may just be a burden, but if you 00:05:00.740 --> 00:05:03.519 hold constant the legality of tenant pay brokerage 00:05:03.519 --> 00:05:05.480 services, you have banned the advertisement. 00:05:06.240 --> 00:05:08.680 And that's the important point here. Getting 00:05:08.680 --> 00:05:12.240 to the issue of the city's, whether the city's 00:05:12.240 --> 00:05:15.740 interests are substantial, you focus on the stated 00:05:15.740 --> 00:05:19.100 purpose in the bill, that it's to properly align 00:05:19.100 --> 00:05:21.639 the principal agent relationship in the rental 00:05:21.639 --> 00:05:29.279 market. But isn't that - overall purpose to improve 00:05:29.279 --> 00:05:34.600 mobility, to increase affordability. It may not 00:05:34.600 --> 00:05:37.500 be effective in dealing with the housing crisis, 00:05:37.579 --> 00:05:42.300 but isn't the purpose designed to do more than 00:05:42.300 --> 00:05:46.759 just? There's a reason behind realigning the 00:05:46.759 --> 00:05:50.899 principal agent relationship. So how can you 00:05:50.899 --> 00:05:55.970 just focus on that and not recognize that The 00:05:55.970 --> 00:06:00.769 testimony and the evidence and the investigation 00:06:00.769 --> 00:06:04.490 done by the council all go to this issue of addressing 00:06:04.490 --> 00:06:08.709 the problem that it's difficult for people to 00:06:08.709 --> 00:06:11.910 move when they have to pay huge brokerage fees. 00:06:12.370 --> 00:06:14.610 I think my easiest answer to that question is 00:06:14.610 --> 00:06:16.810 to say, even if I spot you that that's the purpose 00:06:16.810 --> 00:06:18.810 and it's an important purpose, they still haven't 00:06:18.810 --> 00:06:21.139 shown the fit. Because if what you're trying 00:06:21.139 --> 00:06:23.519 to do is you're trying to solve the fact that 00:06:23.519 --> 00:06:26.600 people have to pay these fees Banning speech 00:06:26.600 --> 00:06:28.899 doesn't achieve that goal and it doesn't and 00:06:28.899 --> 00:06:30.980 you can achieve that it's not banning speech, 00:06:31.019 --> 00:06:34.639 right? It's banning the the who pays for the 00:06:34.639 --> 00:06:38.839 brokerage fee now it I Understand your argument 00:06:38.839 --> 00:06:41.839 that it impacts First Amendment because it has 00:06:41.839 --> 00:06:45.680 an impact on commercial speech But that's not 00:06:45.680 --> 00:06:50.279 the the when looking applying the task, you look 00:06:50.279 --> 00:06:53.480 at what is the substantial interest of the city. 00:06:54.839 --> 00:06:58.379 And I'm more focused, we're sort of beyond the, 00:06:58.839 --> 00:07:02.199 assume there's a First Amendment. Right. So if 00:07:02.199 --> 00:07:04.000 I spot you the interest, then they have to show 00:07:04.000 --> 00:07:05.980 the tailoring also under central Hudson. And 00:07:05.980 --> 00:07:07.980 that's where so many laws have failed and where 00:07:07.980 --> 00:07:09.800 I think that's where, quite frankly, this law 00:07:09.800 --> 00:07:13.519 fails because it doesn't show why burdening the 00:07:13.519 --> 00:07:15.180 speech of the brokers, maybe if you don't want 00:07:15.180 --> 00:07:17.420 to say banning, at least significantly burdening 00:07:17.420 --> 00:07:19.899 the speech of tenant pay brokers is going to 00:07:19.899 --> 00:07:22.540 achieve any of the things that they do except 00:07:22.540 --> 00:07:24.420 by saying that, well, if we burden the speech, 00:07:24.560 --> 00:07:27.110 we've eliminated tenant pay broker fees. But 00:07:27.110 --> 00:07:29.310 if that's the goal, then you can address the 00:07:29.310 --> 00:07:31.970 issue of tenant pay broker fees directly. That's 00:07:31.970 --> 00:07:34.189 the lesson of Sorel, a 44 Liquor Mart, and a 00:07:34.189 --> 00:07:37.329 Virginia Board of Pharmacy. But the test isn't 00:07:37.329 --> 00:07:40.089 whether it's going to be effective or whether 00:07:40.089 --> 00:07:44.329 there's a better way to do it. It's whether the 00:07:44.329 --> 00:07:48.990 way that's been the infringement is tailored 00:07:48.990 --> 00:07:53.310 to address the issue, right? It is, but it's 00:07:53.310 --> 00:07:55.610 a very rigorous tailoring. I mean, what Thompson 00:07:55.610 --> 00:07:57.750 versus Western State Medical Center said is that 00:07:57.750 --> 00:08:00.069 if you can achieve the goal without burdening 00:08:00.069 --> 00:08:02.129 speech or burdening less speech, that's what 00:08:02.129 --> 00:08:04.370 you have to do. And so when you look at things 00:08:04.370 --> 00:08:06.550 like Central Hudson and Thompson and all the 00:08:06.550 --> 00:08:08.670 others, they go through and say, here are lots 00:08:08.670 --> 00:08:10.730 of other things you could do to achieve the goal. 00:08:11.129 --> 00:08:13.129 It's not rational basis review where you say, 00:08:13.149 --> 00:08:17.050 look, I know it's not perfect, but we give deference 00:08:17.050 --> 00:08:19.509 because you're burdening First Amendment interests. 00:08:20.099 --> 00:08:23.220 I do also have the contracts claim. I had a question 00:08:23.220 --> 00:08:25.860 about that. I mean, the city is says in its briefing 00:08:25.860 --> 00:08:28.540 that you've identified one contract and that 00:08:28.540 --> 00:08:31.379 there's now. a moodness issue. Could you address 00:08:31.379 --> 00:08:33.240 that point? Certainly, Your Honor. Of course, 00:08:33.259 --> 00:08:35.360 when we presented the five contracts in the district 00:08:35.360 --> 00:08:37.019 court, we didn't know when the de Cristo court 00:08:37.019 --> 00:08:39.100 would decide the case. We didn't know when this 00:08:39.100 --> 00:08:40.980 court would hear the case. I think what I'd say 00:08:40.980 --> 00:08:43.299 is if the court would like another contract from 00:08:43.299 --> 00:08:46.019 us that goes beyond October 31st, we are more 00:08:46.019 --> 00:08:48.820 than happy to present it. But on the record, 00:08:48.899 --> 00:08:51.159 as it came to this court, we had a perfectly 00:08:51.159 --> 00:08:53.720 fine set of contracts. It was just the passage 00:08:53.720 --> 00:08:55.799 of time. So if the court wants us to address 00:08:55.799 --> 00:08:58.789 that issue, we're more than happy to do it. I 00:08:58.789 --> 00:09:01.370 don't know what you mean by that. We're here 00:09:01.370 --> 00:09:05.289 to adjudicate your case on a record that's before 00:09:05.289 --> 00:09:07.450 us. Right, and on the record... You're offering 00:09:07.450 --> 00:09:11.440 us a different record. Well, the problem seems 00:09:11.440 --> 00:09:13.700 to be that the mootness issue only occurred on 00:09:13.700 --> 00:09:16.299 Halloween when the last contract that we... I 00:09:16.299 --> 00:09:17.919 don't even know if it's a mootness issue, Your 00:09:17.919 --> 00:09:20.080 Honor, because it's not mootness as to the case. 00:09:20.480 --> 00:09:22.860 It's maybe at most as the preliminary injunctive 00:09:22.860 --> 00:09:24.980 relief, because the claim is you don't have a 00:09:24.980 --> 00:09:27.039 particular contract that this injunction would 00:09:27.039 --> 00:09:28.899 apply to. We pleaded in the complaint that there 00:09:28.899 --> 00:09:30.740 are countless contracts of which... But I thought 00:09:30.740 --> 00:09:35.610 the Fair Act precluded... entering into any future 00:09:35.610 --> 00:09:38.549 contracts that involve this type of payment. 00:09:39.129 --> 00:09:41.929 So how can you allege there's a current contract 00:09:41.929 --> 00:09:45.789 unless it was one that was created before the 00:09:45.789 --> 00:09:48.809 act was passed and somehow is still ongoing? 00:09:49.409 --> 00:09:51.909 Otherwise it is moot, isn't it? And there are 00:09:51.909 --> 00:09:54.049 contracts that meet that definition. The injunction 00:09:54.049 --> 00:09:55.990 we are asking for under the contracts clause 00:09:55.990 --> 00:09:59.009 claim is only for contracts that predate the 00:09:59.009 --> 00:10:01.090 effective, the - That are still ongoing today. 00:10:01.110 --> 00:10:03.529 That are still executory today. But you're offering 00:10:03.529 --> 00:10:06.850 a contract that wasn't part of your case. Oh, 00:10:07.110 --> 00:10:09.230 but it was part of our, I mean at the time that 00:10:09.230 --> 00:10:12.129 the district court ruled, I mean our contracts 00:10:12.129 --> 00:10:14.509 were still executory. What happened, I mean - 00:10:14.539 --> 00:10:17.419 But what they are faulting us for is not presenting 00:10:17.419 --> 00:10:19.559 a contract, not understanding that the district 00:10:19.559 --> 00:10:21.340 court would rule when it was, and the court would 00:10:21.340 --> 00:10:22.940 hold argument, and this court would hold argument 00:10:22.940 --> 00:10:24.980 when it did. If this court had held argument 00:10:24.980 --> 00:10:27.379 two months prior, we wouldn't have this issue. 00:10:27.559 --> 00:10:29.399 Well, wasn't there evidence? I mean, Bond New 00:10:29.399 --> 00:10:33.019 York alleged it had many tenant pay exclusive 00:10:33.019 --> 00:10:35.919 listing arrangements. There were affidavits that 00:10:35.919 --> 00:10:40.840 said that these contracts go beyond a year. So 00:10:40.840 --> 00:10:42.580 that's right. There's not a specific contract, 00:10:42.600 --> 00:10:45.179 but there's definitely. evidence before us that 00:10:45.179 --> 00:10:47.320 these contracts exist. That's absolutely right, 00:10:47.419 --> 00:10:49.179 Judge Livingston. There is evidence that say 00:10:49.179 --> 00:10:51.440 these contracts do exist and they go for a while. 00:10:51.679 --> 00:10:53.659 The response we got was, well, show us a contract. 00:10:53.879 --> 00:10:56.460 So we gave them five contracts. It just so happens 00:10:56.460 --> 00:10:59.299 that the five contracts that we pulled as exemplars 00:10:59.299 --> 00:11:01.220 happened to have expired, the last one expired 00:11:01.220 --> 00:11:03.289 on Halloween. But that doesn't take away from 00:11:03.289 --> 00:11:04.929 the fact that there is evidence that there are 00:11:04.929 --> 00:11:07.509 contracts that do fit the definition of what 00:11:07.509 --> 00:11:09.730 would fall within the contracts claim. It's just 00:11:09.730 --> 00:11:12.809 that I don't have a particular contract for a 00:11:12.809 --> 00:11:14.409 specific building. Why wouldn't you have given 00:11:14.409 --> 00:11:19.850 the court a contract that went on for, you know, 00:11:20.090 --> 00:11:22.570 presumably indefinitely? Although I suppose they 00:11:22.570 --> 00:11:26.200 now violate the law, wouldn't they? What? I don't 00:11:26.200 --> 00:11:28.620 think people enter into indefinite relationships 00:11:28.620 --> 00:11:31.179 or don't enter into limitless relationships because 00:11:31.179 --> 00:11:33.299 you want the ability to reassess your relationship 00:11:33.299 --> 00:11:36.100 with your broker. The fact that the five contracts 00:11:36.100 --> 00:11:38.299 we pulled just didn't happen to fall within the 00:11:38.299 --> 00:11:40.159 range of when this case was decided and argued, 00:11:40.240 --> 00:11:42.759 I think is a coincidence of the contracts we 00:11:42.759 --> 00:11:46.600 pulled. But we had to, at the time we compiled 00:11:46.600 --> 00:11:48.879 this record, they were within the period that 00:11:48.879 --> 00:11:51.000 they would have checked. It just happened to 00:11:51.000 --> 00:11:53.860 be that Halloween was the last one. So your representation 00:11:53.860 --> 00:11:56.299 to this court is that there are contracts that 00:11:56.299 --> 00:11:59.600 are still ongoing? Yes. Like they don't expire 00:11:59.600 --> 00:12:03.620 in two weeks or a month? I have asked directly, 00:12:03.659 --> 00:12:07.460 and I have been told that if the court wants 00:12:07.460 --> 00:12:10.080 a particular contract that is still executory, 00:12:10.220 --> 00:12:12.379 we can get that. And as Judge Livingston mentioned, 00:12:12.559 --> 00:12:15.539 there is more. general testimony and affidavits 00:12:15.539 --> 00:12:18.080 in the record that said, these contracts, some 00:12:18.080 --> 00:12:20.940 of them do go for quite some time, and there 00:12:20.940 --> 00:12:22.840 are contracts that would fall within the injunction. 00:12:23.179 --> 00:12:26.120 I agree that as time goes on, the number of contracts 00:12:26.120 --> 00:12:28.399 the injunction would apply to are fewer and fewer 00:12:28.399 --> 00:12:31.240 as contracts time out, but that's just a fact 00:12:31.240 --> 00:12:46.870 of how contracts close claims work. shorter than 00:12:46.870 --> 00:12:51.769 my friend. May it please the court, my name is 00:12:51.769 --> 00:12:53.629 Jameson Davies for the Appellees. This court 00:12:53.629 --> 00:12:55.509 should affirm the district's court orders denying 00:12:55.509 --> 00:12:57.490 a preliminary injunction and dismissing the plaintiff's 00:12:57.490 --> 00:12:59.269 First Amendment claims and denying a preliminary 00:12:59.269 --> 00:13:01.690 injunction as a contrast clause claim. Plaintiffs 00:13:01.690 --> 00:13:03.629 lost the policy battle and now attempt to recast 00:13:03.629 --> 00:13:05.490 their policy objections as constitutional ones. 00:13:05.809 --> 00:13:07.389 But these attempts fail as the district court 00:13:07.389 --> 00:13:09.590 properly held. First, as the First Amendment 00:13:09.590 --> 00:13:12.009 claim, the Fair Act simply does not affect speech. 00:13:12.350 --> 00:13:13.870 The law doesn't bar the publication of anything 00:13:13.870 --> 00:13:18.909 by anyone. Sorry, I apologize. Instead, it merely 00:13:18.909 --> 00:13:20.610 provides that if a broker lists an apartment 00:13:20.610 --> 00:13:22.809 with the landlord's permission, the broker cannot 00:13:22.809 --> 00:13:25.330 later on engage in the conduct of collecting 00:13:25.330 --> 00:13:27.590 the fee from the broker. It's a conduct regulation, 00:13:27.730 --> 00:13:30.509 not a speech regulation. Well, how do you square 00:13:30.509 --> 00:13:37.409 that with the US versus national treasury case 00:13:37.409 --> 00:13:40.529 expressions here designed versus Schneiderman? 00:13:40.950 --> 00:13:46.750 How do you square that position? You know, I 00:13:46.750 --> 00:13:49.649 know it's regulating payment and not speech, 00:13:49.830 --> 00:13:52.710 but how can you say it doesn't impact on speech? 00:13:52.769 --> 00:13:58.179 Sure, so those cases talk about banning being 00:13:58.179 --> 00:14:00.120 paid for the speech itself. So if you look at 00:14:00.120 --> 00:14:03.039 the Treasury Employees Union case, that barred 00:14:03.039 --> 00:14:05.179 people from getting paid for giving speeches 00:14:05.179 --> 00:14:06.840 or writing books. If you look at the Veterans 00:14:06.840 --> 00:14:10.059 Guardians case, they talk about that barred people 00:14:10.059 --> 00:14:12.100 from getting compensation for their speech, for 00:14:12.100 --> 00:14:13.419 consulting with veterans on these claims. Well, 00:14:13.440 --> 00:14:16.340 aren't the brokers getting compensation in their 00:14:16.340 --> 00:14:19.639 fees, in part, for their speech, for advertising 00:14:19.639 --> 00:14:22.730 and listing? Exactly right. they're getting compensation 00:14:22.730 --> 00:14:25.809 for consummating the transaction. The speech 00:14:25.809 --> 00:14:28.590 is a predicate to that, but the regulatory object 00:14:28.590 --> 00:14:30.450 and what they're getting compensation for is 00:14:30.450 --> 00:14:33.169 the deal. So if you look to something like Clementine, 00:14:33.450 --> 00:14:35.830 where the theater said, you know, this is making 00:14:35.830 --> 00:14:37.789 it less profitable for us to engage in the speech 00:14:37.789 --> 00:14:40.230 of putting on a play, the squirt said, no, that's, 00:14:40.230 --> 00:14:42.049 you know, the fact that it's merely making your 00:14:42.049 --> 00:14:44.570 speech less profitable is not a First Amendment 00:14:44.570 --> 00:14:47.610 issue unless the regulatory object of the law 00:14:47.840 --> 00:14:50.460 is to regulate speech itself. And here, the regulatory 00:14:50.460 --> 00:14:52.340 object of the law is to regulate the conduct. 00:14:52.399 --> 00:14:55.600 Didn't Clementine just essentially, it involved 00:14:55.600 --> 00:14:57.659 a theater, so there was speech at issue, but 00:14:57.659 --> 00:15:01.279 it was a generally applicable law about holding 00:15:01.279 --> 00:15:04.480 public events and the need to check vaccination 00:15:04.480 --> 00:15:08.120 status before you hold such events, right? It 00:15:08.120 --> 00:15:10.440 was a generally applicable law, but I think the 00:15:10.440 --> 00:15:12.559 rationale works here. And here, this law is. 00:15:12.639 --> 00:15:14.740 You know, it's not generally applicable only 00:15:14.740 --> 00:15:16.899 in the sense that to regulate brokers, you have 00:15:16.899 --> 00:15:18.440 to regulate brokers. It wouldn't, you know, you 00:15:18.440 --> 00:15:20.919 can't. In theory, it applies to everybody, but 00:15:20.919 --> 00:15:23.100 brokers are the only relevant constituency who 00:15:23.100 --> 00:15:24.519 could be regulated by this because they have 00:15:24.519 --> 00:15:25.720 to be licensed by the state, et cetera. Well, 00:15:26.039 --> 00:15:29.139 I mean, here, it regulates brokers and it prohibits 00:15:29.139 --> 00:15:32.360 them from charging a fee to a particular class 00:15:32.360 --> 00:15:34.899 of people they would otherwise charge. because 00:15:34.899 --> 00:15:37.059 of their speech. I mean, that's the way that 00:15:37.059 --> 00:15:39.779 seems pretty far afield to me from Clementine. 00:15:39.860 --> 00:15:41.779 So help me understand what I'm missing. Sure. 00:15:41.919 --> 00:15:43.899 I wouldn't say it's because of their speech. 00:15:43.919 --> 00:15:47.139 I would just say that there is a predicate speech 00:15:47.139 --> 00:15:48.940 act that happens. And there's a lot of times 00:15:48.940 --> 00:15:50.639 that happens. There's a lot of laws that have 00:15:50.639 --> 00:15:52.940 some incidental effect on speech. This court's 00:15:52.940 --> 00:15:55.059 decision in the Ku Klux Klan case that we cite, 00:15:55.500 --> 00:15:57.500 and numerous others. The fact that there is some 00:15:57.820 --> 00:16:00.519 decrease in speech or some effect on speech isn't 00:16:00.519 --> 00:16:02.360 the question. The question is whether the regulatory 00:16:02.360 --> 00:16:06.299 object of the law is to bar speech. Assuming 00:16:06.299 --> 00:16:10.820 for the moment that it did impact on speech, 00:16:10.940 --> 00:16:14.879 can we get to the second issue, which is your 00:16:14.879 --> 00:16:17.960 position that the Fair Act survives the intermediate 00:16:17.960 --> 00:16:21.299 scrutiny test, which you claim should be applied, 00:16:21.539 --> 00:16:24.779 not the test in Sorel. Right. I mean, I think 00:16:24.779 --> 00:16:26.759 the test in Sorel is sort of a misnomer because 00:16:26.759 --> 00:16:29.909 Sorel didn't a different test as this court is 00:16:29.909 --> 00:16:34.730 recognizing Hugo. But yes, we satisfy intermediate 00:16:34.730 --> 00:16:37.610 scrutiny. The law addresses several substantial 00:16:37.610 --> 00:16:39.509 government interests. It directly advances those 00:16:39.509 --> 00:16:41.690 interests, and it's not more extensive than necessary. 00:16:41.970 --> 00:16:43.509 I think it's important to take a step back as 00:16:43.509 --> 00:16:47.529 well. This case is talking about A2, a particular 00:16:47.529 --> 00:16:49.149 subdivision, at least as to the First Amendment 00:16:49.149 --> 00:16:51.929 claim. But when you're talking about the law's 00:16:51.929 --> 00:16:53.909 interests and how it addresses them, that was 00:16:53.909 --> 00:16:57.299 a sub piece of the law that addressed a specific 00:16:57.299 --> 00:16:59.620 potential loophole that the council identified 00:16:59.620 --> 00:17:02.340 during the course of addressing this law or addressing 00:17:02.340 --> 00:17:03.919 the issue. But, you know, the law as a whole 00:17:03.919 --> 00:17:07.079 is what we're looking at. But A2 dealt with the 00:17:07.079 --> 00:17:09.500 reality of, you know, as the council investigated, 00:17:09.680 --> 00:17:12.119 as numerous people testified, is you show up, 00:17:12.240 --> 00:17:13.940 you're given, you've already paid potentially 00:17:13.940 --> 00:17:16.259 a non -refundable fee. You're given a huge stack 00:17:16.259 --> 00:17:18.240 of papers to sign. The bottom paper says, oh, 00:17:18.240 --> 00:17:20.519 by the way, I was acting as your agent, so you 00:17:20.519 --> 00:17:22.880 have to pay me. And that, the council recognized 00:17:22.880 --> 00:17:25.589 that that's not really a... Correct true agency 00:17:25.589 --> 00:17:28.069 relationship that it was an exploitative transaction 00:17:28.069 --> 00:17:30.569 as even a revenue broker specified. It's an exploitative 00:17:30.569 --> 00:17:34.670 transaction So that what the a2 piece? Seals 00:17:34.670 --> 00:17:36.970 that loophole and says, you know, even if you're 00:17:36.970 --> 00:17:41.009 nominally acting as the tenants agent if you've 00:17:41.009 --> 00:17:43.009 Advertised on behalf of the landlord if you're 00:17:43.009 --> 00:17:46.190 really working for the landlord Then you have 00:17:46.190 --> 00:17:49.029 to be paid by the landlord. Why is that please? 00:17:49.309 --> 00:17:54.130 Why is that necessary? to address the policy 00:17:54.130 --> 00:17:57.150 interests that the regulation is aimed at. I 00:17:57.150 --> 00:18:02.009 mean, why not just prohibit the conduct, prohibit 00:18:02.009 --> 00:18:08.589 having tenant fees? I think it's necessary in 00:18:08.589 --> 00:18:11.349 the sense that the city council, as is in the 00:18:11.349 --> 00:18:13.970 record throughout, they didn't want to ban tenant 00:18:13.970 --> 00:18:16.470 brokers. You can still go and have a tenant broker. 00:18:16.549 --> 00:18:20.710 They can go and work on your behalf. So the council 00:18:20.710 --> 00:18:22.509 was navigating where they wanted to continue 00:18:22.509 --> 00:18:24.650 to have real state brokers who worked on behalf 00:18:24.650 --> 00:18:26.730 of tenants, but they didn't want this situation 00:18:26.730 --> 00:18:28.630 that they'd identified through their investigations. 00:18:30.390 --> 00:18:32.170 And I think it's important to note that their 00:18:32.170 --> 00:18:34.609 investigation, they had 50 people go out and 00:18:34.609 --> 00:18:36.450 not one of them got an agreement at the outset 00:18:36.450 --> 00:18:39.309 saying, oh, by the way, this is the fee, I am 00:18:39.309 --> 00:18:41.450 working on your behalf. So it's addressing the 00:18:41.450 --> 00:18:44.869 real world situation here. And I think it was... 00:18:44.940 --> 00:18:47.460 charting a path between completely banning the 00:18:47.460 --> 00:18:49.819 fees, which they objected to, you know, the city 00:18:49.819 --> 00:18:52.039 council was addressing their objections in adding 00:18:52.039 --> 00:18:54.740 this piece, revenue's objections, revenue brokers' 00:18:55.220 --> 00:18:57.980 objections. And in the antiquities case that 00:18:57.980 --> 00:18:59.799 we cite from this court says, you know, it doesn't 00:18:59.799 --> 00:19:02.619 have to be a perfect fit. It has to be a reasonable 00:19:02.619 --> 00:19:05.079 fit. And there's deference given to the city's 00:19:05.079 --> 00:19:08.279 identification of the issues and its conclusions 00:19:08.279 --> 00:19:10.119 about whether or not the law is likely to satisfy 00:19:10.119 --> 00:19:13.160 those concerns. And that's also in view as well. 00:19:14.199 --> 00:19:17.859 and I think, you know, we've identified 3 issues 00:19:17.859 --> 00:19:20.119 that really don't dispute us on the variance 00:19:20.119 --> 00:19:22.720 and transparency issue. They sort of barely dispute 00:19:22.720 --> 00:19:24.900 us by making arguments about the record on the 00:19:24.900 --> 00:19:26.900 housing mobility issue. But I think even if you 00:19:26.900 --> 00:19:29.200 look to the committee report only, which I don't 00:19:29.200 --> 00:19:30.980 think there's any reason to suggest that the 00:19:30.980 --> 00:19:32.859 legislative history is limited to committee report. 00:19:33.299 --> 00:19:35.039 The committee report, as the district court concluded, 00:19:35.359 --> 00:19:37.960 and I'll point you to 672 and 673 of the record, 00:19:38.359 --> 00:19:40.019 talked about the housing mobility issues. You 00:19:40.019 --> 00:19:41.299 know, they're cherry picking one sentence out 00:19:41.299 --> 00:19:43.140 of the committee report, but that was throughout 00:19:43.140 --> 00:19:44.359 the committee report. And the district court 00:19:44.359 --> 00:19:47.119 concluded that as well, both in the order on 00:19:47.119 --> 00:19:49.539 appeal here and the later order denying a motion 00:19:49.539 --> 00:19:52.079 for a stay pending appeal. Can you address the 00:19:52.079 --> 00:19:56.039 contracts clause issue in the mootness? Sure. 00:19:57.400 --> 00:19:59.779 So they, one, I think it's important to step 00:19:59.779 --> 00:20:03.240 back. On this issue, in their reply, they cite 00:20:03.240 --> 00:20:05.299 a motion to dismiss case. But we're past motion 00:20:05.299 --> 00:20:07.420 dismissed. They bear the burden on a preliminary 00:20:07.420 --> 00:20:09.970 injunction of showing irreparable harm. to show 00:20:09.970 --> 00:20:11.750 irreparable harm, they have to show that there 00:20:11.750 --> 00:20:13.630 are some contracts out there that would be affected 00:20:13.630 --> 00:20:15.509 by the preliminary injunction that they seek. 00:20:15.930 --> 00:20:18.589 And they haven't done so. They put in five contracts, 00:20:19.190 --> 00:20:22.150 four of which were already post the date that 00:20:22.150 --> 00:20:24.170 they say is the cutoff. So really, only one contract 00:20:24.170 --> 00:20:27.470 was ever at issue, potentially. That contract 00:20:27.470 --> 00:20:30.769 has expired. And so there's really no indication. 00:20:30.990 --> 00:20:33.170 And they bear the burden on this issue. As we 00:20:33.170 --> 00:20:35.269 point out in the Giuliani case, they have to 00:20:35.269 --> 00:20:37.200 provide some evidence. preliminary injunction 00:20:37.200 --> 00:20:39.519 is going to have some effect. There's some irreparable 00:20:39.519 --> 00:20:43.640 harm that they can show. If you look to the affidavit 00:20:43.640 --> 00:20:45.680 they're talking about, I think the one they're 00:20:45.680 --> 00:20:47.740 talking about is on 938 of the record. It really 00:20:47.740 --> 00:20:49.619 doesn't say anything about it. It says we have 00:20:49.619 --> 00:20:51.420 some contracts. They might extend for a while. 00:20:51.480 --> 00:20:54.740 It doesn't say really that they're going to be 00:20:54.740 --> 00:20:56.619 contracts that were entered into before the cutoff 00:20:56.619 --> 00:21:00.819 date and expire afterwards. And I think also, 00:21:00.920 --> 00:21:03.900 even if there are some that might be going on, 00:21:04.339 --> 00:21:06.660 Maybe they can point to some. It's important 00:21:06.660 --> 00:21:10.140 to note also that the two things, which is that 00:21:10.140 --> 00:21:12.220 they're not allowed under New York State law 00:21:12.220 --> 00:21:15.440 to have automatically revolving exclusive listing 00:21:15.440 --> 00:21:17.259 agreements. So there's going to be cutoff dates 00:21:17.259 --> 00:21:19.039 for all of these at some point. If you look to 00:21:19.039 --> 00:21:21.019 the ones they put in, they're usually six months 00:21:21.019 --> 00:21:22.859 or a year. That seems to be the industry standard. 00:21:23.599 --> 00:21:26.140 So they're likely to expire anyways. And sanitation 00:21:26.140 --> 00:21:28.859 recycling says if there's a limited time left 00:21:28.859 --> 00:21:31.019 on these contracts, it's much less likely there's 00:21:31.019 --> 00:21:32.519 going to be a substantial impairment caused by 00:21:32.519 --> 00:21:37.630 the law. I assume that we get past your mootness 00:21:37.630 --> 00:21:40.509 point. And could you address on the contract 00:21:40.509 --> 00:21:43.910 claim the fact that an earlier version of the 00:21:43.910 --> 00:21:46.529 act, I think, did provide that it would apply 00:21:46.529 --> 00:21:51.349 to transactions entered into after the law's 00:21:51.349 --> 00:21:54.470 effective date? I mean, why was there any need 00:21:54.470 --> 00:21:57.769 to reach these contracts that we're talking about? 00:21:57.890 --> 00:22:00.269 Sure. So what the council was concerned with 00:22:00.269 --> 00:22:03.740 was that folks would, you know, during the pendency 00:22:03.740 --> 00:22:06.940 of the law would rush to enter into a very long 00:22:06.940 --> 00:22:09.240 -term contracts that would essentially put them 00:22:09.240 --> 00:22:12.839 outside of the law's scope. Wouldn't they be 00:22:12.839 --> 00:22:17.319 vulnerable to a foreseeability? I think they 00:22:17.319 --> 00:22:19.039 still would be vulnerable to the foreseeability 00:22:19.039 --> 00:22:21.680 attack potentially. The concession that this 00:22:21.680 --> 00:22:23.859 was foreseeable as of the date of the law's introduction 00:22:23.859 --> 00:22:25.839 didn't come until litigation. I think the council 00:22:25.839 --> 00:22:27.819 could reasonably have concluded that if they'd 00:22:27.819 --> 00:22:29.539 passed that law, revenue would be here making 00:22:29.539 --> 00:22:31.720 the opposite argument that it wasn't foreseeable 00:22:31.720 --> 00:22:34.259 until the law was actually in effect. So I think 00:22:34.259 --> 00:22:36.059 they don't have to assume that revenue is going 00:22:36.059 --> 00:22:38.059 to make that concession later on in litigation. 00:22:38.920 --> 00:22:41.880 And I also want to note that these are sort of 00:22:41.880 --> 00:22:43.680 strange contracts in terms of substantial impairment, 00:22:43.779 --> 00:22:45.740 because it's a contract between two parties that 00:22:45.740 --> 00:22:47.940 just says, by the way, a third party is going 00:22:47.940 --> 00:22:49.759 to have to pay the fee. Who's not a part of this 00:22:49.759 --> 00:22:52.440 contract, we don't even know who it is yet. So 00:22:52.440 --> 00:22:55.720 the fact that they're being impaired from being 00:22:55.720 --> 00:22:57.240 paid by someone who's not even a part of the 00:22:57.240 --> 00:22:59.640 contract, who they have at most a very contingent 00:22:59.640 --> 00:23:02.079 right to collect from, I don't think there's 00:23:02.079 --> 00:23:05.140 a significant impairment in that sense. Unless 00:23:05.140 --> 00:23:06.619 there are any further questions, we'd urge the 00:23:06.619 --> 00:23:13.859 court to affirm. We'll hear about it. Thank you, 00:23:13.859 --> 00:23:15.799 Your Honor. I want to start by addressing the 00:23:15.799 --> 00:23:17.819 loophole that my friend on the other side seems 00:23:17.819 --> 00:23:20.759 to think that the publication bar, the publication 00:23:20.759 --> 00:23:23.819 burden addresses. But the simple problem with 00:23:23.819 --> 00:23:26.259 that is that if the city's investigation found 00:23:26.259 --> 00:23:28.980 that some people who are tenants agents are not 00:23:28.980 --> 00:23:31.299 living up to their obligations, you should hold 00:23:31.299 --> 00:23:34.140 them to their obligations. So take, for example, 00:23:34.859 --> 00:23:40.250 the tenants agent who only discloses his. his 00:23:40.250 --> 00:23:42.569 status at the closing. Well actually, New York 00:23:42.569 --> 00:23:45.509 Real Property Law 443 requires that the first 00:23:45.509 --> 00:23:47.970 substantive contact between the broker and the 00:23:47.970 --> 00:23:50.589 tenant, they be given a disclosure form that 00:23:50.589 --> 00:23:54.230 says whose behalf I'm working on. Well, if they're 00:23:54.230 --> 00:23:56.430 not complying with that law, you should hold 00:23:56.430 --> 00:23:58.799 them to comply with that law. If you think there 00:23:58.799 --> 00:24:00.640 are additional prophylactic measures that need 00:24:00.640 --> 00:24:02.839 to be taken to disclose who you're working on 00:24:02.839 --> 00:24:05.660 behalf of, maybe you can do that. But what you 00:24:05.660 --> 00:24:07.720 can't do is say that, well, we're not going to 00:24:07.720 --> 00:24:11.180 let you advertise your particular apartments 00:24:11.180 --> 00:24:13.799 and still collect tenant pay brokerage fees, 00:24:14.039 --> 00:24:16.599 which is, again, perfectly legal under New York 00:24:16.599 --> 00:24:19.119 law. It's only when you have engaged in speech 00:24:19.119 --> 00:24:21.880 as a precedent to that that your right to collect 00:24:21.880 --> 00:24:25.380 from the tenant is taken away. So at most, what 00:24:25.380 --> 00:24:27.910 the CASE investigation shows is you should deal 00:24:27.910 --> 00:24:30.309 with brokers who are not doing their jobs, it's 00:24:30.309 --> 00:24:32.950 not that you should be burdening speech. Second, 00:24:33.170 --> 00:24:36.289 with respect to transparency, the city acknowledged 00:24:36.289 --> 00:24:40.369 on JA 678 that we are addressing transparency 00:24:40.369 --> 00:24:42.829 through a separate provision of the law that 00:24:42.829 --> 00:24:47.630 requires that you clearly disclose on any listing 00:24:47.630 --> 00:24:50.369 who the fees are going to be paid by and what 00:24:50.369 --> 00:24:52.769 they are. And that solves transparency because 00:24:52.769 --> 00:24:55.369 it's now on the street easy listing before you 00:24:55.369 --> 00:24:57.529 ever contact the broker, which is what the city's 00:24:57.529 --> 00:24:59.710 investigation revealed, which is I wasn't aware 00:24:59.710 --> 00:25:02.549 of the fee until I was to the closing. Finally, 00:25:02.569 --> 00:25:05.190 with respect to the contract claim, there is, 00:25:05.269 --> 00:25:07.289 as has been pointed out, general information 00:25:07.289 --> 00:25:09.089 in the record that there are many contracts. 00:25:09.190 --> 00:25:11.210 The fact that the particular ones that we gave 00:25:11.210 --> 00:25:14.009 are not still effective doesn't take away from 00:25:14.009 --> 00:25:15.930 the fact that there is still evidence to survive. 00:25:16.269 --> 00:25:19.190 Where is that evidence of the contracts and their 00:25:19.190 --> 00:25:22.930 exact date? Well, it's not their exact date, 00:25:23.029 --> 00:25:24.990 Your Honor. It's the bond affirmation, it's the 00:25:24.990 --> 00:25:26.769 bond declaration, and then the declaration that 00:25:26.769 --> 00:25:28.529 my friend pointed out, which says that we have 00:25:28.529 --> 00:25:30.869 these exclusive listing agreements that continue 00:25:30.869 --> 00:25:32.609 for a long - I looked at that. If it was page 00:25:32.609 --> 00:25:37.130 938, it said one year and the latest January 00:25:37.130 --> 00:25:41.890 2025, the latest listing. So what the bond declaration 00:25:41.890 --> 00:25:44.890 says is many of them last one year, some last 00:25:44.890 --> 00:25:46.890 beyond it. I agree with you that he does not 00:25:46.890 --> 00:25:49.289 say, I have a particular building and it is still 00:25:49.289 --> 00:25:51.410 continuing to this particular date. So none of 00:25:51.410 --> 00:25:55.130 them is identified? There is not a particular 00:25:55.130 --> 00:25:57.589 building identified. I will give you that. Sorry? 00:25:57.849 --> 00:26:01.069 There is not a particular building for which 00:26:01.069 --> 00:26:02.569 we are the exclusive broker for. There's not 00:26:02.569 --> 00:26:05.250 a particular contract identified. I'm sorry, 00:26:05.349 --> 00:26:06.829 Your Honor? There's not a particular contract 00:26:06.829 --> 00:26:10.319 identified. There is not a particular contract. 00:26:10.519 --> 00:26:15.259 I will give you that much, yes. Thank you. Thank 00:26:15.259 --> 00:26:17.799 you both and we'll take the matter under advisement.