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A prior decision in the case had the side effect of eliminating news organizations’ exemption from the same enhanced fees.
(CN) — A U.S. Court of Appeals for the Sixth Circuit panel handed Kentucky state and local officials a victory on Thursday over home sales website Zillow in a dispute over enhanced fees charged to commercial enterprises for real estate records.
A byproduct of the decision also spares Kentucky news organizations the loss of their exemption from enhanced fees.
In its 2-1 decision, the Cincinnati-based Sixth Circuit held that Kentucky’s Open Records Act — by charging higher fees for records requested for a commercial purpose than for requests made by newspapers or periodicals, and radio or television stations — does not violate Zillow’s rights under the First Amendment or the equal protection clause of the 14th Amendment.
“We do not think that the fundamental distinction drawn by the statute — between requestors with commercial and those with non-commercial purposes — distinguishes based on the content of the requestor’s intended use for the records received,” U.S. Circuit Judge Karen Moore, a Bill Clinton appointee, wrote for the majority.
The Kentucky records statute defines commercial purpose as the use of information for “sale, resale, solicitation, rent, or lease of a service, or any use by which the user expects a profit either through commission, salary, or fee.”
According to Zillow in its 2019 lawsuit against the Kentucky Department of Revenue and six county property valuation administrators, the counties deemed Zillow’s request to be of a commercial purpose, meaning it wouldn’t be exempt from higher fees for obtaining the documents. Zillow says it was quoted enhanced fees ranging from $9,000 to $40,000 for tax-assessment data from a half-dozen counties.
Exempt news organizations, in contrast, are charged only the actual cost of reproducing requested records.
Zillow said the fees were unconstitutional because although Zillow is a corporation, it was using the data to build a free database. Zillow, which maintains an online database of more than 110 million U.S. homes used by some 131 million users each month, regularly makes public records requests to state officials to ensure the information on its website is current.
But siding with the state, the majority found the fees were not discriminatory and the distinction between who is and is not charged enhanced fees is not dependent on what the content the requestor creates with the records.
“The distinction drawn has nothing to do with the actual content created by the requestor, only whether that content will be used to obtain a profit. The statute does not even require any investigation into what the requestor will be talking about,” Moore wrote.
In a dissenting opinion, U.S. Circuit Judge Boggs said that he would hold that the distinction between commercial and non-commercial requesters is indeed content-based on its face, and thus the proper analytical framework is strict scrutiny and even implicates the First Amendment.
“KORA’s attempt to draw such a distinction is problematic because it requires that the government choose which entities are focused ‘solely’ on profit — as opposed to those who make millions or billions in the course of virtuous purveying of ‘news’ (‘The Press’) — and then decide who is entitled to constitutional protections,” the Ronald Reagan appointee wrote.
“The Press” referenced by Boggs comes in the form of The Kentucky Press Association and American City Business Journals, who became involved in the case after a federal court previously severed the newspaper exemption from the act rather than striking down the entire commercial-fee statute while granting summary judgment to the state and its officials in 2022.
Both Zillow and newspapers were then subject to the full commercial purpose requestor fees, prompting the news organizations to intervene in the appeal to the Sixth Circuit to reinstate its exemption.
Zillow, the Kentucky Department of Revenue, and the Kansas Press Association did not respond to requests for comment Thursday evening.
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