1 –OPINION AND ORDER

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF OREGON

PORTLAND DIVISION

CITY OF PORTLAND,

No. 3:15-cv-01984-MO

Plaintiff, 

OPINION AND ORDER

v.

HOMEAWAY.COM, INC. and 

HOMEAWAY, INC.,

Defendants.

MOSMAN, J.,

When new technologies are developed, there is often a tension between those new technologies 

and efforts to regulate them within a framework built around older technologies. This case is an 

illustration of that tension. Plaintiff City of Portland sued Defendants HomeAway.com, Inc. and 

HomeAway, Inc. (collectively “HomeAway”) for failure to comply with various provisions of the 

Portland City Code collectively known as the “Transient Lodgings Tax.” HomeAway moves to dismiss 

the City’s complaint. I GRANT HomeAway’s Motion to Dismiss [7] and DENY injunctive relief. 

I. BACKGROUND

HomeAway operates an online vacation rental marketplace where people interested in making 

their homes available for short-term rental may advertise their property. Travelers interested in renting a 

property can access HomeAway’s websites to search for and find available properties. HomeAway puts 

the traveler in contact with the owner or lessee of the property to sort out the details of the lodging 

arrangement. HomeAway has property listings located all over the world, including in Portland. 

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In 1972, the City of Portland enacted a Transient Lodgings Tax Ordinance, Portland City Code 

(“PCC”) § 6.04.010, et seq. (“the Ordinance”), providing in part that “[e]very [hotel] operator renting 

rooms or space for lodging or sleeping purposes in this City . . . shall collect a tax from the transient” to 

be remitted to the City. PCC § 6.04.030(A). The Ordinance applies to hotel “Operators,” defined by the 

Ordinance as “the person who is proprietor of the hotel in any capacity. Where the operator performs 

his/her functions through a managing agent of any type or character other than an employee, the 

managing agent shall also be deemed an operator . . . .” PCC § 6.04.010 (M). The Ordinance authorizes 

the City to levy fines against Operators that do not comply with the Ordinance. See, e.g., PCC § 

6.04.170. 

On January 21, 2015, the Portland City Council passed amendments to the Ordinance that took 

effect on February 20, 2015. The apparent goal of the City Council in passing the amendments was to 

extend the Ordinance to cover “Booking Agents.” The Ordinance defines “Booking Agent” as “an 

Operator or any person that provides a means through which a Host may offer a Short-Term Rental for 

transient lodging occupancy. This service is usually, though not necessarily, provided through an online 

platform and generally allows a Host to advertise the Short-Term Rental through a website . . . .” PCC § 

6.04.010 (D). The Ordinance expressly lists “[o]nline travel booking sites” as examples of “Booking 

Agents.” Id.

After the City Council passed the 2015 amendments to the Ordinance, the City sent HomeAway 

notices in which the City contended that HomeAway was in violation of various provisions of the 

Ordinance. (See Compl. [1], Exs. 3-8.) Included in these notices was an assessment of $2,540,106 in 

presumptive taxes, penalties, and interest. (See Compl. [1], Ex. 7.) HomeAway refused to pay the 

assessment, claiming it was not in violation of the Ordinance because it was not an Operator or Booking 

Agent and therefore did not fall under the Ordinance’s terms. On October 21, 2015, the City filed this 

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lawsuit against HomeAway seeking a declaratory judgment that HomeAway is an Operator or a 

Booking Agent, a reduction of fines to judgment, a reduction of presumptive taxes to judgment, and an 

injunction enjoining HomeAway’s operations in Portland. 

On May 17, 2016, I held oral argument. From the bench, I issued a ruling GRANTING 

HomeAway’s Motion to Dismiss [7] and DENYING injunctive relief. The purpose of this Opinion and 

Order is to further clarify my rulings.

II. LEGAL STANDARD

When reviewing a motion to dismiss, the court must “accept all factual allegations in the 

complaint as true and construe the pleadings in the light most favorable to the nonmoving party.” 

Knievel v. ESPN, 393 F.3d 1068, 1072 (9th Cir. 2005). A court need not accept legal conclusions as true 

because “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory 

statements, do not suffice.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). To survive a motion to dismiss 

for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6), “a complaint must contain 

sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Id. 

(quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A pleading that offers only “labels and 

conclusions” or “‘naked assertion[s]’ devoid of ‘further factual enhancement’” will not suffice. Id.

(quoting Twombly, 550 U.S. at 555, 557). While a plaintiff does not need to make detailed factual 

allegations at the pleading stage, the allegations must be sufficiently specific to give the defendant “fair 

notice” of the claim and the grounds on which it rests. See Erickson v. Pardus, 551 U.S. 89, 93 (2007) 

(per curiam) (citing Twombly, 550 U.S. at 555).

III. DISCUSSION 

The City’s claims all depend on HomeAway being either an Operator or a Booking Agent as 

defined under the Ordinance. HomeAway contends that the City’s complaint fails to allege that 

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HomeAway is either an Operator or a Booking Agent and therefore all claims should be dismissed. I 

find the City has failed to allege HomeAway is an Operator. I further find the Portland City Charter does 

not grant the City the authority to tax HomeAway as a Booking Agent, and the City has not sufficiently 

alleged enough facts to tax HomeAway as a Booking Agent under the alternative authority of the

relevant Oregon statute. Finally, I find the Ordinance does not place any duties and responsibilities on 

Booking Agents and, accordingly, I decline to reduce to judgment any fines assessed against 

HomeAway as a Booking Agent. I set forth my reasoning for these findings below. 

A. HomeAway’s Form 10-K Filing

In its Response to HomeAway’s Motion to Dismiss, the City makes numerous factual allegations 

based on information contained in HomeAway’s Form 10-K filing with the Securities Exchange 

Commission. HomeAway objects to my consideration of any facts included in the Form 10-K filing and 

not contained in or attached to the City’s complaint and argues that the City has mischaracterized the 

company’s disclosures. Therefore, as a threshold matter, I must determine whether it is appropriate in 

this case to consider a defendant company’s Form 10-K filing when the company contests the facts 

contained in the filing. I find it inappropriate.

As a general rule, “a district court may not consider any material beyond the pleadings in ruling 

on a Rule 12(b)(6) motion.” Hal Roach Studios, Inc. v. Riachard Feiner & Co., 896 F.2d 1542, 1555 

n.19 (9th Cir. 1990). In fact, Rule 12(b)(6) mandates that if “matters outside the pleading are presented 

to and not excluded by the court, the motion must be treated as one for summary judgment” rather than a 

motion to dismiss. FED. R. CIV. P. 12(d) (emphasis added). There are, however, two exceptions to the 

requirement. The first exception is “a court may consider material which is properly submitted as part of 

the complaint . . . . If the documents are not physically attached to the complaint, they may be 

considered if the documents’ authenticity . . . is not contested and the plaintiff’s complaint necessarily 

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relies on them.” Lee v. City of Los Angeles, 250 F.3d 668, 688 (9th Cir. 2001) (citations and internal 

quotation marks omitted). 

The second exception to the requirement, under Federal Rule of Evidence 201, allows a district 

court to take judicial notice of “matters of public record.” Mack v. South Bay Beer Distrib., 798 F.2d 

1279, 1282 (9th Cir. 1986). Under this exception, courts can consider securities offerings and corporate 

disclosure documents, such as Form 10-K filings, which are publicly available. See Metzler Inv. GMBH 

v. Corinthian Colleges, Inc., 540 F.3d 1049, 1064 n. 7 (9th Cir. 2008); Wynn v. Chanos, 75 F. Supp. 3d 

1228, 1235 (N.D. Cal. 2014) (“SEC forms such as a Form 8–K or Form 10–K are matters of public 

record and may be subject to judicial notice. Accordingly, I take judicial notice of Wynn's . . . Form 10–

K from 2011.”) (citation omitted). But it is only appropriate for me to “to take judicial notice of the 

content of the SEC Forms [ ] and the fact that they were filed with the agency. The truth of the content, 

and the inference properly drawn from them, however, is not a proper subject of judicial notice under 

Rule 201.” Patel v. Parnes, 253 F.R.D. 531, 546 (C.D. Cal. 2008) (emphasis added); see also Vesta 

Corp. v. Amdocs Mgmt. Ltd., 80 F. Supp. 3d 1152, 1157 (D. Or. 2015) (“The Court takes judicial notice 

of the SEC filings . . . not for the truth of the facts recited therein but for the existence of the records.”); 

Gerritsen v. Warner Bros Entm’t Inc., 112 F. Supp. 3d 1011, 1032 (C.D. Cal. 2015) (collecting cases 

from other circuits and various district courts within the Ninth Circuit). 

Here, because the City has not attached HomeAway’s Form 10-K filing to its complaint nor has 

the City’s complaint necessarily relied on the filing, the first exception does not apply. The second 

exception also does not apply because neither party has formally requested I take judicial notice of 

HomeAway’s Form 10-K filings. Even if the City were to request I take judicial notice of the Form 10-

K filing, to do so would be improper because the City is relying on the truth of the contents of the filing 

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to prove the substance of its claims. Accordingly, I will not consider the contents of HomeAway’s Form 

10-K filing in ruling on HomeAway’s motion. 

B. HomeAway as an “Operator” 

The City’s second, fourth, and sixth claims are predicated on HomeAway being an “Operator” 

under the Ordinance. The Ordinance defines an Operator as a “person who is [a] proprietor of the hotel 

in any capacity. Where the operator performs his/her functions through a managing agent of any type or 

character other than an employee, the managing agent shall also be deemed an operator . . . .” PCC § 

6.04.010 (M). In other words, there are two ways the City can allege HomeAway is an Operator: first, if

it alleges HomeAway is the proprietor of the hotel; and second, if it alleges HomeAway is a managing 

agent performing the proprietor’s functions. I find the City has failed to allege HomeAway is either a 

proprietor of a hotel or a managing agent and therefore has failed to allege HomeAway is an Operator. 

1. Proprietor of a Hotel

HomeAway is an Operator under the Ordinance if it is the proprietor of a hotel. The Ordinance 

defines “hotel” as “any structure, or any portion of any structure which is occupied or intended or 

designated for transient occupancy for 30 days or less for dwelling, lodging, or sleeping purposes . . . .” 

PCC § 6.04.010(K). The Ordinance does not, however, define the term “proprietor.” Terms that are not 

defined in the Portland City Code must be construed in accordance with their ordinary usage and in their 

context. See PCC § 1.01.050(D); see also State v. Langley, 314 Or. 247, 256, 839 P.2d 692 (1992) 

(illustrating the rule that “words of common usage” should “be given their plain, natural, and ordinary 

meaning”). Therefore, before I can determine whether the City has sufficiently alleged HomeAway is a 

proprietor in the hotel context, I must determine the ordinary meaning of proprietor. 

HomeAway argues that the plain meaning of “proprietor” implies full or partial ownership of a 

business or property. In support of this argument, HomeAway relies on several dictionary definitions. 

See, e.g., Proprietor, BLACK’S LAW DICTIONARY (10th ed. 2014) (“An owner, esp. one who runs a 

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business.”); THE AMERICAN HERITAGE DICTIONARY (4th ed. 2000) (“1. One who has legal title to 

something; an owner. 2. One who owns or owns and manages a business or other such establishment.”). 

HomeAway contends these definitions demonstrate ownership is necessary for proprietorship. The City 

responds by citing a different, much broader dictionary definition of proprietor. See WEBSTER’S THIRD 

NEW INT’L DICTIONARY 1819 (unabridged ed. 2002) (defining “proprietor” in part as, “one having an 

interest (as control, present use, or usufruct) less than absolute and exclusive right”).

I find the definitions HomeAway offers accurately convey the ordinary meaning of “proprietor,”

especially when taken in the hotel context. One would not ordinarily understand “proprietor of a hotel” 

to include people who simply have control over the hotel, use the hotel, or have the right to enjoy the use 

and advantages of a hotel. Instead, one would understand a proprietor of a hotel to be the owner of the 

hotel—ownership is a central element of proprietorship. 

The City has not alleged, nor can it allege, that HomeAway is an owner of hotel properties. In 

fact, the City has claimed that the Hosts, rather than HomeAway, are the owners of the various 

properties listed through HomeAway. (See Pl. Resp. [18] at 2 (“HomeAway operates its short-termrental business by soliciting listings from property owners . . . .”) (emphasis added).) 

At oral argument, the City asserted that HomeAway is in fact the owner of a “virtual hotel” and 

therefore a proprietor. However, this argument directly contradicts the definition of “hotel” as set forth 

by the City itself in the Ordinance. The Ordinance limits its definition of hotels to a “structure” or a 

“portion of [a] structure.” See PCC § 6.04.010(K). Therefore, while HomeAway may be a proprietor of 

a virtual hotel business, a virtual hotel is not a hotel at all under the terms of the Ordinance. 

Accordingly, I find that the City has not met its burden in alleging that HomeAway is a proprietor of a 

hotel. 

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2. Managing Agent 

The second way for HomeAway to be an Operator under the Ordinance is if it is a managing 

agent. The Ordinance does not define the term “managing agent,” so I am left once again to determine 

the undefined term’s meaning given its ordinary usage and context. See PCC § 1.01.050(D). 

For its suggested definition of managing agent, HomeAway cites Black’s Law Dictionary, which 

defines a managing agent as any “person with general power involving the exercise of judgment and 

discretion, as opposed to an ordinary agent who acts under the direction and control of the principal.” 

Managing Agent, BLACK'S LAW DICTIONARY (10th ed. 2014). The City proposes that I splice the 

separate definitions of “manager” and “agent” together to arrive at a new definition of managing agent 

considerably broader than the Black’s Law Dictionary definition. The City would define managing agent 

as “an agent that manages a particular phase or activity within a business or institution” on behalf “of 

another by authority from him.”1I reject this Frankenstein approach to defining a legal term of art, the 

definition of which is readily ascertainable by referring to a reputable legal dictionary such as Black’s. 

See Doe v. Medford Sch. Dist. 549C, 232 Or. App. 38, 48, 221 P.3d 787 (2009) (“When the legislature 

employs a term of art, however, that term is not necessarily given its ordinary meaning. Instead, we will 

resort to a specialized dictionary to determine the meaning of the term in its more specialized usage.”). I 

adopt HomeAway’s definition, which focuses on the “judgment and discretion” of the actor. The issue, 

therefore, is whether the City has sufficiently alleged that HomeAway exercises judgment and discretion

in performing the functions of a hotel proprietor so as to allege that HomeAway is a managing agent. 

The City has failed to allege that HomeAway exercises judgment and discretion and has 

therefore failed to allege that HomeAway is a managing agent. The City’s complaint contains numerous 

 

1 The City defines “manager” as “one that manages: a person that conducts, directs, or supervises something . . . or a 

particular phase or activity within a business or institution;” and “agent” as “one that acts for or in the place of another by 

authority from him.” (Pl. Resp. [18] at 10 (citing Webster’s Third New Int’l Dictionary).) 

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conclusory allegations that HomeAway is in violation of PCC Chapter 6.04. However these allegations 

are insufficient to defeat a 12(b)(6) motion to dismiss. The City also alleges in its complaint that

[t]hrough third parties, HomeAway offers several ancillary products and 

services that include credit card merchant processing and eChecks which 

allows payment by accepting, receiving, or facilitating payments for 

rentals, insurance products, and tax return services which help their listing 

owners comply with applicable tax regulations.

(Pl. Comp. [1] at 11, ¶ 27.) Allegations that HomeAway, through third parties, offers various products 

and services to its customers falls well short of alleging that HomeAway exercises judgment and 

discretion in performing the functions of a hotel proprietor. I therefore find that the City has not 

sufficiently alleged that HomeAway is a managing agent. Accordingly, I DISMISS claims two, four, and 

six because HomeAway is neither a proprietor of a hotel nor a managing agent and therefore cannot be

an Operator under the Ordinance. The City may, however, be able to amend its complaint to allege that 

HomeAway exercises discretion and judgment such that HomeAway is a managing agent and therefore 

an Operator.

C. HomeAway as a “Booking Agent” 

In addition to the requirements imposed by the Ordinance on Operators, the 2015 Amendments 

to the Ordinance also impose various requirements on Booking Agents. The City’s first, third, and fifth 

claims all allege that HomeAway has not complied with those Booking Agent requirements.

Specifically, the City’s first claim seeks a declaratory judgment that HomeAway is a Booking Agent; its 

third claim seeks to reduce fines imposed against HomeAway for various regulatory violations to 

judgment; and its fifth claim seeks to reduce presumptive taxes against HomeAway to judgment. 

HomeAway argues that it is not subject to any taxing provisions in the Ordinance as a Booking Agent 

because the Portland City Charter does not grant the City the authority to impose tax collection 

obligations on Booking Agents. HomeAway further argues that it does not qualify as a Booking Agent, 

but even if it did, the specific regulatory Ordinance provisions HomeAway has allegedly violated do not 

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actually impose any requirements on Booking Agents. While I do not agree with all of HomeAway’s 

arguments, I ultimately agree with both of HomeAway’s conclusions and dismiss the City’s first, third, 

and fifth claims.

1. The City’s Authority to Impose Tax Collection Obligations on Booking Agents

HomeAway argues the City exceeded the authority granted to it by the Portland City Charter 

when it passed the January 2015 amendment regulating Booking Agents. The Charter states, in relevant 

part:

The Council may by ordinance impose and levy a tax . . . on gross 

amounts of money, credit or other things of value paid to or received for 

lodging by the owner or operator of any hotel, motel, apartment or 

lodging house, mobile home or trailer park or court, or any other place in 

the City where space designed or intended for lodging occupancy is rented 

by any person or persons, for any period less than monthly. . . . The tax 

imposed shall be collected by the owner or operator of the rental space in 

addition to the rental charge, at the time of payment of rent. 

Portland City Charter § 7-113(1) (emphasis added). The City argues the Charter grants it authority to 

impose tax collection obligations on Booking Agents because Booking Agents are “operators” under the 

Charter. HomeAway argues the Charter limits the City’s ability to impose tax collection obligations on

only “owners” and “operators,” and since HomeAway is not an Operator under the Ordinance, it cannot 

be taxed as an operator under the Charter.

2 HomeAway contends that allowing the City to pass an 

ordinance that taxes Booking Agents in addition to Operators would allow the City to act outside of the 

authority granted to it through the Charter. See Watkins v. Josephine Cty., 243 Or. App. 52, 60, 259 P.3d 

79 (2011) (“A municipal charter bears the same relationship to the municipality’s ordinances that a state 

or federal constitution bears to those respective bodies’ legislation: It defines what is and is not within 

the entity’s legislative authority.”). HomeAway seeks to superimpose the definition of operator found in 

 

2 Neither party contends that the tax collection obligations imposed on Booking Agents under the Ordinance are imposed 

because they are “owners” under the Charter; rather the obligations are imposed on Booking Agents because the City alleges 

it is acting under its authority to impose such obligations on “operators” under the Charter. 

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the Ordinance onto the Charter—since HomeAway is not an Operator under the Ordinance, the City 

cannot tax HomeAway under the Charter because the City’s authority to tax is limited to taxing owners 

and operators, not Booking Agents. While I agree that the Charter does not grant the City authority to 

tax HomeAway, I reject HomeAway’s argument. 

HomeAway’s argument assumes the terms “operator” under the Ordinance and under the 

Charter are identical. While HomeAway appears to argue these terms lend themselves to an apples-toapples comparison, in reality the comparison is one between apples and oranges. The Portland City 

Charter was adopted by the Portland voters. See OR. CONST., Art. XI, § 2 (“The legal voters of every 

city and town are hereby granted power to enact and amend their municipal charter, subject to the 

Constitution and criminal laws of the State of Oregon [.]”). In contrast, the Ordinance provision at issue 

was enacted by the Portland City Council. HomeAway’s argument assumes that because I have held that 

HomeAway falls outside the City Council’s definition of Operator as contained in the Ordinance, I must 

necessarily find that it also falls outside the voters’ definition of operator as contained in the Charter. 

This is clearly not true. A well-recognized canon of construction states that a word or phrase is 

presumed to bear the same meaning throughout a text. See, e.g., Atlantic Cleaners & Dyers, Inc. v. 

United States, 286 U.S. 427, 433 (1932). However, no such canon exists stating that a word or phrase is 

presumed to bear the same meaning in different texts drafted by different actors in different contexts. 

Accordingly, my finding that HomeAway is not an Operator under the Ordinance does not necessarily 

preclude the City from imposing tax collection obligations on HomeAway as a Booking Agent under the 

Charter. 

The issue remains, however, whether the Charter grants the City authority to impose tax 

collection obligations on Booking Agents. This depends on whether “operator” in the Charter is defined 

broadly enough to include Booking Agents. The Charter does not define operator. The City argues that

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since the term is undefined in the Charter, the City Council is empowered to define the term by 

ordinance and it did so when it defined Operator and Booking Agent in PCC § 6.04. The City’s 

argument is flawed. While I owe the City Council deference when interpreting ambiguous terms in the 

City’s ordinances, Cascade Broadcasting Co. v. Groener, 51 Or. App. 533, 537, 626 P.3d 386 (1981), I 

do not owe the City Council any deference in interpreting terms in the City’s Charter.3 Rather, 

“[b]ecasue the charter provision was adopted by the voters, [my] task is to discern what the voters 

intended . . . , which [I] derive by first looking to the text and context of the provision, taking into 

account any history of the measure that illuminates the voters’ intent.” Brown v. City of Eugene, 250 Or. 

App. 132, 136, 279 P.3d 298 (2012) (internal quotation omitted). Therefore, to decipher the intent of the 

voters, I will first look at the ordinary meaning of the term “operator” in the context of the Portland City 

Charter. See Medford Sch. Dist. 549C, 232 Or. App. at 47 (“In the absence of a definition in the statute 

itself, we assume that the legislature intends a statutory term to be given its ordinary meaning. To 

ascertain the ordinary meaning of such terms, courts typically look to dictionary definitions.”) (citing 

Portland Gen. Elec. Co. v. Bureau of Labor & Indus., 317 Or. 606, 859 P.2d 1143 (1993)). 

The City offers what it labels “the ordinary, dictionary definition of ‘operator.’” (Pl. Resp. [18] 

at 22). The City proposes the following definition: “a person who actively operates a business . . . 

whether as owner, lessor, or employee.” (Id. at 22–23 (quoting WEBSTER’S THIRD NEW INT’L 

DICTIONARY 1581).) I agree with the City that this definition reasonably reflects the ordinary meaning of 

 

3 The deference Oregon courts afford to a local government’s construction of an ordinance is a matter of pragmatism. For 

example, in Cascade Broadcasting Co. v. Groener, the court explained that it deferred to the county’s interpretation of an 

ordinance “because the county has the duty of administering the ordinance and is its legislative source, and, therefore, the 

County is in a better position than [the court] to determine the legislative intent.” 51 Or. App. 533, 536-37, 626 P.3d 386 

(1981) (citing Bienz v. City of Dayton, 29 Or. App.. 761, 776, 566 P.2d 904 (1977)). Extending this deference to a city 

interpreting its own charter, however, would not have the same benefit; the City is in no better position than the court to 

determine what the voters’ intent was when it passed the Charter. 

Furthermore, even if I deferred to the City’s definition of operator, the City asks me to look at the definition provided in the 

Ordinance which, as discussed above, does not fit HomeAway. What the City really seeks is to define “operator” in the 

Charter the same way it defines “Booking Agent” in the Ordinance. The City is trying to do through the back door of 

conflating terms what it should have done through the front door of defining terms. 

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operator in the context of the Charter and adopt this definition as a reflection of the voters’ intent. In 

other words, applying the City’s proposed definition of operator to the language of the Charter, I find the 

Charter grants the City authority to impose tax collection obligations on people and entities that actively 

operate a hotel or motel business4 whether as owner, lessor, or employee.

There are two reasons why HomeAway, even if it is a “Booking Agent,” falls outside this 

definition and therefore outside of the City’s authority granted to it by the Charter to impose tax 

collection obligations. First, applying the City’s definition of operator, the Charter only allows the City 

to impose tax collection obligations on people and entities that “actively operate” a hotel or motel.5The 

City has not alleged that HomeAway actively operates a hotel. While not alleged in the complaint, at 

oral argument, the City proposed viewing HomeAway as an active operator of a virtual hotel. To adopt 

this view would be inconsistent with the purpose of ascertaining an appropriate dictionary definition of 

“operator” in the first place, which I have done here by adopting the City’s own definition. The purpose 

of referring to the dictionary is to understand what the voters who passed the Charter likely took

operator to mean. While the City’s definition that I have adopted defines an operator as someone who 

“actively operates” a hotel as either “owner, lessor, or employee,” there is no doubt the voters who 

passed the Charter in 1971 did not understand operators of hotels to include operators of virtual hotels. 

Second, the City’s definition applied to the Charter only allows the City to impose tax collection 

obligations on people and entities who are hotel operators as either “owner, lessor, or employee.”6The 

City has not alleged that HomeAway owns, leases, or is an employee of a hotel. Therefore, I find the 

 

4

Section 7-113(1) of the Charter also lists apartments, lodging houses, mobile homes or trailer parks or courts, “or any other 

place in the City where space designed or intended for lodging occupancy is rented by any person or persons, for any period 

less than monthly.” Portland City Charter § 7-113(1). 

5 The City’s definition of Booking Agent, as defined in the Ordinance, is much broader than this, including within it “any 

person that provides a means through which a Host may offer a Short-Term Rental for transient lodging occupancy[,]” 

whether the person actively operates the hotel or not. See PCC § 6.04.010(D) (emphasis added).

6 Once again, the City’s definition of Booking Agent is broader than the authority granted to it by the Charter, including 

within the definition people that neither own, lease, or are employed by a hotel or motel business.

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City Council acted ultra vires when it attempted to impose tax collection obligations on HomeAway

under the authority granted to it by the Charter. 

Regardless of any limitation placed on it by Section 7-113(1) of the Charter, the City argues 

Oregon state statutes provide an alternate source of authority to impose tax collection obligations on 

HomeAway. Section 2-106 of the Charter authorizes the City Council to “exercise any power or 

authority granted by Oregon statute to municipal corporations at any time and also to cities of a class 

which includes the City of Portland,” and Oregon state law expressly authorizes Oregon cities to impose 

a transient-lodgings tax. See OR. REV. STAT. ANN. § 320.345 et seq. (West 2015). Citing various 

provisions in the definitions section of the statute, the City contends that “[s]uch a tax may be imposed 

on any person who ‘facilitates the retail sale of transient lodging and charges for occupancy of the 

transient lodging’ or on any ‘person that furnishes transient lodgings.’” (Pl. Resp. [18] quoting Or. Rev. 

Stat. Ann §320.300(12), (13), (14).) Assuming, without deciding, that ORS Chapter 320 authorizes the 

City to tax those who facilitate the retail sale of or furnish transient lodgings, the City has not 

sufficiently alleged in its complaint that HomeAway does either of those activities. It is entirely 

possible, however, if given a chance to amend its complaint, the City may sufficiently allege that 

HomeAway facilitates the sale of or furnishes transient lodging. The burden is on the City to do so. 

Accordingly, since the City does not have the authority to impose tax collection obligations on 

Booking Agents under the Charter and since it has not sufficiently alleged that HomeAway facilitates 

the sale of or furnishes transient lodging, I DISMISS the City’s fifth claim that seeks to reduce

presumptive taxes to judgment.

2. Regulations Imposed on Booking Agents by the Ordinance

My finding that the City may not impose tax collection obligations on HomeAway as a Booking 

Agent under the City’s allegations in its current complaint does not necessarily preclude it from 

regulating Booking Agents and fining HomeAway for not complying with those regulations. The City’s 

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third claim asks that I reduce to judgment various fines assessed against HomeAway for regulatory 

noncompliance. The City’s complaint references the Revised Notice of Violation letter dated October 7, 

2015, which outlines the grounds for the $1,007,500 in civil penalties assessed against HomeAway that 

the City seeks to reduce to judgment. The Revised Notice alleges the following: 

HomeAway . . . is in violation of the Portland City Code. . . . These 

violations are based on [the City’s] review of the listings on both [of 

HomeAway’s] websites on April 8, 2015.

1. Failure to register with the [Portland Revenue] Division within 15 

calendar days after commencing business. As a Booking Agent, 

HomeAway is an Operator subject to this requirement (PCC 6.04.060 

A[;] 6.04.170 C)[.]

2. Failure to collect and remit the Transient Lodging Tax as required for 

those transactions through HomeAway Payments (PCC 6.04.040 B;

6.04.170 A).

3. Failure to provide the physical address of a transient lodging 

occupancy location within Portland and the related contact information 

(PCC 6.04.060 C; 6.04.170 E).

4. Failure to prominently display in the advertising on HomeAway.com 

and VRBO.com the Accessory Short-Term Rental permit or case file 

number. Only eight of 330 HomeAway.com listings and only nine of 

the 347 VRBO.com listings included an Accessory Short Term Rental 

(ASTR) permit or case file numbers in the listings are required (PCC 

6.04.060 D; 6.04.170 G)[.]

(Pl. Comp. [1], Ex. 7 at 1). The City cites two provisions of the Ordinance for each of HomeAway’s

alleged violations. The first provision allegedly establishes the substantive duty or responsibility on 

HomeAway as a Booking Agent while the second provision “imposes a civil penalty of $500 for each 

violation” of the Ordinance. PCC § 6.04.170. 

HomeAway argues it does not qualify as a Booking Agent, but even if it did qualify, these

specific Ordinance provisions cited by the City do not actually impose any requirements or duties on 

Booking Agents. Assuming, without deciding, that HomeAway does qualify as a Booking Agent under 

the Ordinance, I will address each Ordinance provision the City alleges HomeAway violated. I find each 

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Ordinance provision fails to impose any duties or responsibilities on Booking Agents and therefore 

dismiss the City’s third claim.

i) Failure to register with the Revenue Division under PCC § 6.04.060(A) and 

6.04.170 (C) 

The first type of civil penalty the City assesses against HomeAway is for a failure to register 

with the City’s Revenue Division within fifteen calendar days after commencing business. The City 

claims section 6.04.060(A) establishes HomeAway’s responsibility to register with the City and section

6.04.170(C) is the enforcement provision imposing the civil penalty. The City alleges that HomeAway 

violated this provision once and seeks to reduce a $500 fine to judgment against HomeAway. (Pl. Comp. 

[1], Ex. 7 at 2).

Section 6.04.060(A) of the Ordinance requires “[e]very person engaging or about to engage in 

business as an operator of a hotel . . . . [to] register within 15 calendar days after commencing 

business.” PCC § 6.04.060(A) (emphasis added). The provision only refers to Operators, not to Booking 

Agents. Since the City has not sufficiently alleged that HomeAway is an Operator, this provision and the 

associated penalties for noncompliance do not apply to HomeAway or Booking Agents. I therefore 

decline to reduce to judgment any penalties associated with this provision of the Ordinance against 

HomeAway.

ii) Failure to collect and remit the Transient Lodging Tax under PCC § 

6.04.040(B) and 6.04.170(E)

The second civil penalty the City assesses against HomeAway is for failure to collect the 

Transient Lodging Tax and remit the tax to the City. The City claims section 6.04.040(B) imposes the 

duty on Booking Agents and section 6.04.170(A) imposes a civil penalty for failure to comply. The City 

alleges that HomeAway violated this provision 677 times, resulting in $338,500 in civil penalties. (See

Pl. Comp. [1], Ex. 7 at 2).

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Section 6.04.040(B) requires an Operator or Booking Agent who “directly or indirectly accepts, 

receives or facilitates payment” for transient-lodging occupancy to “collect, report and remit transient 

lodging taxes to the City of Portland.” PCC § 6.04.040(B). As explained above, the City has not 

sufficiently alleged that HomeAway is an Operator. While HomeAway may very well be a Booking 

Agent under the Ordinance, I have held above that the City may not impose tax collection obligations on 

HomeAway as a Booking Agent without amending its complaint. Since HomeAway is not required to 

collect taxes under my holding above, it is not required to comply with section 6.04.040(B). 

Notably, if the City were to amend its complaint and allege facts sufficient to demonstrate

HomeAway is either an Operator or that HomeAway facilitates the sale of or furnishes transient 

lodgings such that the City may potentially impose tax collecting obligations under ORS Chapter 320, 

the City could impose fines based on HomeAway’s alleged failure to collect and remit taxes under 

section 6.04.040(B). However, until the City cures the deficiencies of its complaint, I decline to reduce 

to judgment any penalties imposed against HomeAway under sections 6.04.040(B) and 6.04.170(A). 

iii) Failure to provide physical addresses under PCC § 6.04.060(C) and 6.04.170(E)

Third, the City seeks $338,500 in civil penalties from HomeAway for 677 alleged violations of 

section 6.04.060(C) of the Ordinance for failing to provide the physical address of a transient lodging 

occupancy location. Notably, section 6.04.060(C) imposes no such obligation.7 But HomeAway makes 

nothing of this, so neither will I. Presumably the City intended to cite section 6.04.040(C), which in fact 

 

7

Section 6.04.060(C) states, in its entirety:

Said certificate shall, among other things, state the following:

1. The name of the operator;

2. The address of the hotel;

3. The date upon which the certificate was issued;

4. “This Transient Occupancy Registration Certificate signifies that the person named has fulfilled the 

requirements of the Transient Lodgings Tax Chapter of the City of Portland for the purpose of 

collecting and remitting the lodgings tax. This certificate does not authorize any person to conduct any 

unlawful business or to conduct any lawful business in an unlawful manner, or to operate a hotel 

without strictly complying with all local applicable laws, including but not limited to those requiring a 

permit from any board, commission, department or office of the City of Portland. This certificate does 

not constitute a permit.”

PCC § 6.04.060(C). 

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requires “Operators, which include Booking Agents” to “provide all physical addresses of transient 

lodging occupancy locations within Portland city limits and the related contact information” to the 

City’s Revenue Division upon the Division’s request. PCC § 6.04.040(C). Those who fail to comply 

with this provision are subject to a $500 penalty for each violation under section 6.04.170(E). 

HomeAway argues the provision’s language, “Operators, which include Booking Agents,” is 

problematic and contends the fact that section 6.04.040(C) mentions Booking Agents is irrelevant. 

HomeAway points to the Ordinance’s definition of Booking Agent, which states “‘Booking Agent’ 

means an Operator or any person . . . .” PCC § 6.04.010(D) (emphasis added). This definition 

acknowledges there are some Booking Agents that are not also Operators. HomeAway asserts that, in 

light of this language, section 6.04.040(C) only imposes the duty to provide addresses on Operators—

including those Operators who also happen to be Booking Agents—not on all Booking Agents. I agree. 

The City cannot define Booking Agent one way in its definition section and choose a different definition 

in a later provision without expressly doing so. The definition of Booking Agent in the definition section 

of the Ordinance implies the term Booking Agent is broader than the term Operator, while the language 

of section 6.04.040(C) assumes the definition of Booking Agent is entirely subsumed within the 

definition of Operator. I therefore find the definition section of the statute, section 6.04.010(D), controls 

and section 6.04.040(C) only applies to Operators, not Booking Agents and Operators. And since the 

City has not sufficiently alleged HomeAway is an Operator, I decline to reduce to judgment any 

penalties imposed against HomeAway under sections 6.04.040(C) and 6.04.170(E). 

iv) Failure to display a Short-Term Rental permit in advertising under PCC § 

6.04.060(D) and 6.04.170(G)

Lastly, the City seeks $330,000 in civil penalties against HomeAway for 660 alleged violations 

of section 6.04.060(D) of the Ordinance for failing to prominently display permit numbers in its 

advertising and other listings. Section 6.04.060(D) says:

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Operators of Type A and Type B accessory short-term rentals as described 

in Section Chapter 33.207 must include their Type A Permit Number or 

Type B Conditional Use case file number, as applicable, in all advertising 

and other listing services. . . . Additionally, this Permit Number or 

Conditional Use case file number shall be prominently displayed in the 

rental unit so as to be seen by all short-term occupants.

PCC § 6.04.060(D). Notably, this provision only refers to Operators and does not appear to impose any 

duties or responsibilities on Booking Agents. However, in what appears to be the result of poor drafting, 

section 6.04.170(G), the companion enforcement provision to section 6.04.060(D), does include a 

reference to Booking Agents. Section 6.04.170(G) says:

A violation includes, but is not limited to . . . . Failure by a Booking Agent 

to prominently display the Accessory Short-Term Rental permit or case 

file number.

PCC § 6.04.170(G). In other words, while the provision that sets forth the duty to display the Accessory 

Short-Term Rental permit or case file number does not mention Booking Agents, the enforcement

provision imposes a fine on Booking Agents that fail to comply with the permit requirements.

I find the inconsistency between the two provisions precludes the City from fining HomeAway 

for noncompliance with a regulation that did not clearly apply to HomeAway. On its face, section 

6.04.060(D) applies to “Operators.” HomeAway is not an Operator under the facts alleged in the City’s 

complaint. While it is true that section 6.04.170(G) does apply to Booking Agents, a Booking Agent 

reading that provision would know that it was subject to a fine for noncompliance, but would not know 

with what duties and responsibilities it must comply. The provision does not include a cross-reference to 

section 6.04.060(D) or any other provision that explains what an “Accessory Short-Term Rental permit 

or case file number” is or what information such permits are required to contain. How little information 

section 6.04.170(G) contains is readily apparent when compared to section 6.04.060(D). Section 

6.04.060(D) explains that “Operators of Type A and Type B accessory short-term rentals, as described 

in Section Chapter 33.207, must include their Type A Permit Number or Type B Conditional Use case 

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20 –OPINION AND ORDER

file number . . . in all advertising and other listing services.” PCC § 6.04.060(D). Section 6.04.170(G) 

does not contain any of this information. Even assuming the City has sufficiently alleged that 

HomeAway is a Booking Agent, a non-Operator Booking Agent in HomeAway’s position would 

rightfully believe the requirements and details of section 6.04.060(D) does not apply to it because the 

provision only applies to “Operators.” Therefore, I decline to reduce to judgment any penalties imposed 

against HomeAway as a Booking Agent under sections 6.04.060(D) and 6.04.170(G).

In summary, I find the Ordinance fails to impose any duties or responsibilities on HomeAway as 

a Booking Agent. I therefore decline to reduce any fines assessed against HomeAway to judgment and 

DISMISS the City’s third claim in its entirety. Because I find that the Ordinance does not impose any 

duties or responsibilities on HomeAway as a Booking Agent and because I find, as discussed above, the 

City has not alleged enough facts that HomeAway can be taxed as a Booking Agent, I also DISMISS the 

City’s first claim which asks me to declare that HomeAway is subject to the Ordinance as a Booking 

Agent. 

D. Injunctive Relief

The City’s seventh claim asks that I issue an injunction to enjoin HomeAway from continuing to 

conduct allegedly unlawful activities. Because I have found the City insufficiently alleged HomeAway’s 

conduct is unlawful under the Ordinance, I decline to issue an injunction at this time. Accordingly, I 

DISMISS the City’s seventh claim. 

IV. CONCLUSION

For the reasons explained above, I GRANT Defendant HomeAway’s 12(b)(6) Motion to Dismiss 

[7]. I find that Plaintiff City of Portland has not sufficiently alleged that HomeAway is an Operator 

under the Ordinance, and I accordingly DISMISS the City’s second, fourth, and sixth claims. I also find 

that the Portland City Charter does not grant the City authority to impose tax collection obligations on 

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21 –OPINION AND ORDER

Booking Agents nor has the City sufficiently alleged that HomeAway falls under the City’s authority to 

impose tax collection obligations on Booking Agents under the relevant Oregon state statutes; 

accordingly, I DISMISS the City’s fifth claim. Furthermore, I find the Ordinance does not impose any 

regulatory duties or responsibilities on HomeAway as a Booking Agent and therefore DISMISS the 

City’s third claim. Because the City’s third and fifth claims are dismissed, I also DISMISS the City’s 

first claim. Finally, I decline to issue an injunction at this time and therefore DISMISS the City’s 

seventh claim. 

DATED this 7th day of June, 2016.

/s/ Michael W. Mosman____ ___

MICHAEL W. MOSMAN

Chief United States District Judge

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