Court Opinion

ID: 7802591
Source: CourtListenerOpinion
Date Created: 2022-08-22 21:00:20.881548+00
Date Added: 2024-06-11T16:29:29.586992
License: Public Domain

Case: 21-30643      Document: 00516442087          Page: 1    Date Filed: 08/22/2022

            United States Court of Appeals
                 for the Fifth Circuit
                                                                         United States Court of Appeals
                                                                                  Fifth Circuit

                                                                                FILED
                                                                          August 22, 2022
                                    No. 21-30643                            Lyle W. Cayce
                                                                                 Clerk

   Samantha Hignell-Stark; White Spider Rental
   Concierge, L.L.C.; Garett Majoue; Russell Frank;
   Samantha McRaney; Bob McRaney; Jimmie Taylor,

                                           Plaintiffs—Appellants/Cross-Appellees,

                                        versus

   The City of New Orleans,

                                           Defendant—Appellee/Cross-Appellant.

                   Appeal from the United States District Court
                      for the Eastern District of Louisiana
                               No. 2:19-CV-13773

   Before Smith, Wiener, and Southwick, Circuit Judges.
   Jerry E. Smith, Circuit Judge:

          This case involves three constitutional challenges to New Orleans’s
   regulation of short-term rentals (“STRs”)—the City’s term for the type of
   lodging offered on platforms such as Airbnb and Vrbo. The district court
   granted summary judgment to the City on two of those challenges but held
   that the third was “viable.” Both sides appealed. We affirm in part, vacate in
   part, and dismiss the City’s cross-appeal for lack of jurisdiction.
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                                           I.
                                           A.
          Before STRs became a major phenomenon, the City forbade property
   owners in residential neighborhoods from renting their homes for less than
   thirty days. In 2016, however, the City decided to offer licenses for such
   property owners to do so for shorter periods. That licensing regime went into
   effect on April 1, 2017.
          That initial regime made clear that an STR license was “a privilege,
   not a right.” 1 It provided only that the City “may issue” an STR license—
   even to someone who met all the statutory requirements for one. Id. § 26-615
   (emphasis added). STR licenses also expired after one year. Id. §§ 26-613(a),
   26-616. And while the City promised that “[r]enewal permits shall be issued
   in the same manner as initial permits,” id. § 26-616, that assurance was made
   subject to its limitations on issuing permits in the first place.
          One year into the initial regime, the City commissioned a study from
   its Planning Commission to reevaluate the STR policies. The study found
   that the rapid proliferation of STRs had brought nuisances to the City.
   Specifically, it discovered that STRs in residential neighborhoods had low-
   ered residents’ quality of life. Many visitors to the City who stayed in STRs
   were loud and did not clean up after themselves. The study also determined
   that the expansion of STRs into residential neighborhoods had led to a “loss
   of neighborhood character.” And it collected “anecdotal evidence” that the
   booming STR market had made housing less affordable for residents.
          Because of the study and other efforts to examine the STR market, the

          1
             Code of the City of New Orleans, La. (“Old Code”) § 26-613(a)
   (April                                  28,                                2017),
   https://library.municode.com/la/new_orleans/codes/code_of_ordinances/292015.

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   City substantially revised its STR licensing regime in 2019. Only two of those
   changes are relevant to this appeal.
          First, the City imposed a residency requirement for STRs in residen-
   tial neighborhoods. Its new policy provided that no person could obtain a
   license to own such an STR unless the property was also “the owner’s pri-
   mary residence.” 2 At oral argument, the City explained that it enforces this
   restriction by requiring applicants to show that they have a homestead exemp-
   tion for the property they wish to rent. 3 Under Louisiana law, a homeowner
   may receive a homestead exemption only for his principal residence. See La.
   Const. art. 7, § 20.
          Second, the City imposed new advertising restrictions on STR license
   holders. Those restrictions prohibited them from (1) advertising illegal STRs
   and (2) advertising legal STRs with greater capacities than permitted by their
   licenses. See New Code § 26-618(b)(1)–(4).

                                             B.
          The plaintiffs are a group of property owners who wish to obtain STR
   licenses for their homes. 4 Many acquired STR licenses under initial regimes
   that were not renewed, and several were denied STR licenses under the new
   regime on account of the City’s new residency requirement.
          In November 2019, the plaintiffs sued the City under 42 U.S.C. § 1983

          2
              Code of the City of New Orleans, La. (“New Code”)
   § 26-617(c)(6)(v)                                                     (2022),
   https://library.municode.com/la/new_orleans/codes/code_of_ordinances.
          3
             Oral Argument at 26:39–27:21; New Code § 26-617(c)(6)(v); New Orleans
   Comprehensive Zoning Ordinance (“CZO”) § 20.3.LLL.3(h) (2022),
   https://czo.nola.gov/home.
          4
            The sole exception is White Spider, which “provid[es] services to [STR] owners
   in connection with [renting] their houses and apartments.”

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   for violating a litany of their constitutional rights. Three of their claims are
   relevant here. First, they said the City’s failure to renew their STR licenses
   violated the Takings Clause because they had a property interest in the re-
   newal of their licenses. Second, they maintained the residency requirement
   violated the dormant Commerce Clause because it discriminated against
   interstate commerce. Third, they contended that the advertising restrictions
   violated the First Amendment as a prior restraint on their protected speech.
   For remedies, the plaintiffs requested a declaration that the City’s policies
   were unconstitutional and a permanent injunction against their enforcement.
   They also asked for attorneys’ fees under 42 U.S.C. § 1988.
          The plaintiffs moved for summary judgment on their Takings Clause
   claim. The City cross-moved for summary judgment on that claim plus the
   dormant Commerce Clause claim. The district court granted the City’s
   motion in full. It held that the plaintiffs’ Takings Clause claim failed because
   they had no property interest in the renewal of their licenses. It also rejected
   their dormant Commerce Clause challenge. Although it acknowledged that
   the residency requirement discriminated against interstate commerce, it held
   that the policy was constitutional because the burden it imposed was not
   “clearly excessive in relation to the putative local benefits.” Pike v. Bruce
   Church, Inc., 397 U.S. 137, 142 (1970)
          The district court then instructed the parties to brief the plaintiffs’
   prior-restraint claim. Based on that briefing, it held that the prior-restraint
   claim was “viable.” The court reasoned that the ordinances gave the City too
   much discretion in approving and denying STRs—and therefore, the plain-
   tiffs’ ability to advertise STRs.
          The plaintiffs appeal the summary judgment on the dormant Com-
   merce Clause claim and the Takings Clause claim. The City cross-appeals
   the “holding”—its term, not ours—that the prior-restraint claim is “viable.”

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                                                  II.
           The plaintiffs claim that the City violated the Takings Clause by re-
   fusing to renew their STR licenses. In their telling, they enjoyed property
   interests in the renewal of their licenses that the City took away from them
   without just compensation. We disagree. The district court correctly held
   that the plaintiffs have no such interests. 5
           The Takings Clause protects property interests but does not create
   them. Instead, “the existence of a property interest is determined by refer-
   ence to existing rules or understandings that stem from an independent
   source such as state law.” Phillips v. Wash. Legal Found., 524 U.S. 156, 164
   (1998) (quotation omitted). Accordingly, we usually treat, as dispositive, the
   existence—or absence—of a property interest under state law. 6
           The plaintiffs, however, do not claim that Louisiana law recognizes
   that they have a property interest in the renewal of their licenses. They main-
   tain that they have such an interest because this court has recognized that
   business licenses qualify as property for purposes of procedural due process.
   They rely on Bowlby v. City of Aberdeen, 681 F.3d 215 (5th Cir. 2012). There,
   we held that “[p]rivileges, licenses, certificates, and franchises qualify as
   property interests for purposes of procedural due process.” Id. at 220 (alter-
   ation adopted) (quoting Wells Fargo Armored Serv. Corp. v. Ga. Pub. Serv.
   Comm’n, 547 F.2d 938, 941 (5th Cir. 1977)).

           5
             In addition, we dismiss White Spider at the outset for lack of standing. It does not
   claim to own property, so it cannot have received an STR license under the initial regime.
   It thus never had even a purported property interest that was taken by the City.
           6
              See, e.g., Degan v. Bd. of Trs. of Dall. Police & Fire Pension Sys., 956 F.3d 813, 815
   (5th Cir.), cert. denied, 141 S. Ct. 375 (2020); Van Houten v. City of Fort Worth, 827 F.3d 530,
   539–40 (5th Cir. 2016); United States v. 0.073 Acres of Land, 705 F.3d 540, 544 (5th Cir. 2013)
   (per curiam).

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          But there’s a big difference between saying that something is property
   for purposes of procedural due process and saying that it is property for pur-
   poses of the Takings Clause. The former merely obligates a governmental
   entity to provide the “owner” with procedural protections—and only when
   a cost-benefit analysis shows that those procedures are worth the cost. See
   generally Mathews v. Eldridge, 424 U.S. 319 (1976). But the latter means that
   the government must pay damages. And the test for a property interest pro-
   tected by procedural due process is quite broad: “A person’s interest in a
   benefit is a ʻproperty’ interest for due process purposes if there are such rules
   or mutually explicit understandings that support his claim of entitlement to
   the benefit . . . .” Perry v. Sindermann, 408 U.S. 593, 601 (1972); accord Bd. of
   Regents of State Colls. v. Roth, 408 U.S. 564, 577–78 (1972).
          This court’s rule of orderliness, however, requires us to recognize that
   some “mutually explicit understandings” can create property interests pro-
   tected by the Takings Clause. The relevant case is Dennis Melancon, Inc. v.
   City of New Orleans, 703 F.3d 262 (5th Cir. 2012). The Melancon plaintiffs
   claimed that an ordinance imposing new restrictions on their taxi licenses
   enacted a regulatory taking. Id. at 266. The ordinance restricted the ability
   of cab drivers to sell their licenses and declared that those licenses were
   “privileges and not rights.” Ibid.
          Ultimately, we rejected the Melancon plaintiffs’ claim that they had a
   property interest in their licenses for purposes of the Takings Clause. Id.
   at 272–75. But we also indicated that some rights recognized by custom alone
   could qualify as property for purposes of the Takings Clause. We acknowl-
   edged that “state law generally defines what constitutes a property interest,”
   but we maintained that “ʻunwritten common law’ or ʻpolicies and practices’
   also can rise to the level of creating ʻproperty interests.’” Id. at 269 (quoting
   Perry, 408 U.S. at 602–03). We thus concluded that “the Fifth Amendment
   protects expectations arising not just from legislation or judicial precedent,

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   but also those springing from custom and practice.” Id. (alteration adopted
   and quotation omitted).
           Even so, Melancon did not hold that customary property rights under
   the Due Process Clause and Takings Clause are coextensive. Instead, we
   recognized the opposite. We appeared to acknowledge that the taxi licenses
   likely qualified as property for purposes of procedural due process under
   Fifth Circuit precedent. See id. at 273 n.7 (citing Wells Fargo, 547 F.2d at 941).
   But we rejected the Takings Clause claims all the same. Id. at 272–75.
   Although Melancon cited many procedural-due-process cases 7 in holding that
   some customary rights can qualify as property under the Takings Clause, the
   decision is unequivocal: A property interest for purposes of procedural due
   process does not automatically qualify as a property interest protected by the
   Takings Clause.
           With that in mind, we thus clarify Melancon’s test for determining
   whether a customary interest is protected as property by the Takings Clause.
   Because property interests under the Due Process Clause and the Takings
   Clause are not the same, that test is not the same as the one for determining
   whether an interest qualifies as property for procedural due process. Instead,
   a property interest must be so deeply rooted in custom that “just compensa-
   tion” for appropriating necessarily includes money damages. U.S. Const.
   amend. V. Surmounting that hurdle should be quite difficult. And when we
   analyze the facts of this case, we have no difficulty in concluding that the
   plaintiffs had no property interest in the renewal of their STR licenses.
           First, the original licensing regime was explicit: An STR license is “a

           7
            See 703 F.3d at 269–70 (citing Roth, 408 U.S. at 577; Perry, 408 U.S. at 602–03;
   Conn. Bd. of Pardons v. Dumschat, 452 U.S. 458, 465 (1981)).

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   privilege, not a right.” 8 Even an applicant who met the statutory require-
   ments for a license was not entitled to one. 9 The ordinance also stated that
   STR licenses “may be revoked or not renewed based on non-compliance with
   the requirements of the Comprehensive Zoning Ordinance, or the require-
   ments provided” in the ordinance itself. 10 The plaintiffs thus lacked the sort
   of ownership in their STR licenses that could support a “legitimate claim of
   entitlement” to money damages when their licenses were not renewed. Mel-
   ancon, 703 F.3d at 270 (quoting Roth, 408 U.S. at 577).
           The plaintiffs object on the ground that the original licensing scheme
   promises that “[r]enewal permits shall be issued in the same manner as initial
   permits.” Old Code § 26-616. That’s true, but it doesn’t help their case.
   Remember: The original regime didn’t require the City to issue a permit,
   even if the statutory requirements were met. Id. § 26-615. The plaintiffs also
   observe that the Constitution “limit[s] state power to terminate an entitle-
   ment whether the entitlement is denominated a ʻright’ or a ʻprivilege.’” Bell
   v. Burson, 402 U.S. 535, 539 (1971). But asserting that principle begs the
   question—the plaintiffs have not demonstrated that they had an entitlement.
           Second, the plaintiffs’ interests in their licenses were not so longstand-
   ing that they can plausibly claim custom had elevated them to property
   interests. 11 STR licenses did not exist until 2017, when the City adopted its

           8
             Old Code § 26-613(a); cf. Melancon, 703 F.3d at 273–74 (holding a taxi license
   was not a property interest under the Takings Clause because it was understood as a
   “privilege”).
           9
              Old Code §§ 26-614 (stating requirements for a STR licenses), 26-615 (provid-
   ing that licenses “may issue” after the requirements were satisfied).
           10
                Id. § 26-613(a).
           11
            Cf. Phillips, 524 U.S. at 167 (“[A] State may not sidestep the Takings Clause by
   disavowing traditional property interests long recognized under state law.” (emphasis
   added)).

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   original licensing regime. And that regime existed for only a year before the
   City made temporary changes to its policies, anticipating the major changes
   enacted in 2019. The short lifespan of the original regime shows that the
   plaintiffs’ licenses were not so rooted in custom and practice that they
   amounted to property.
           Together, those two factors yield one conclusion: The plaintiffs didn’t
   have property interests in the renewal of their licenses. We thus affirm the
   summary judgment on this claim.

                                              III.
           Next, the plaintiffs say the district court erred in granting summary
   judgment to the City on their challenge to the residency requirement. They
   say that the requirement violates the dormant Commerce Clause because it
   discriminates against interstate commerce. We agree. 12
           The Commerce Clause authorizes Congress “[t]o regulate Commerce
   with foreign Nations, and among the several States, and with the Indian
   Tribes.” U.S. Const. art I, § 8, cl. 3. “Although the Constitution does not
   in terms limit the power of States to regulate commerce,” the Supreme Court
   has “long interpreted the Commerce Clause as an implicit restraint on state
   authority, even in the absence of a conflicting federal statute.” 13 Those
   implicit restraints apply to municipalities, too. See, e.g., C & A Carbone, Inc.

           12
             Once again, we must dismiss five of the plaintiffs—White Spider, Garrett
   Majoue, Russell Frank, Samantha McRaney, and Bob McRaney—because they lack stand-
   ing. White Spider doesn’t claim to own rentable property and hasn’t alleged that the resi-
   dency requirement injures it in other ways. Majoue, Frank, and the McRaneys have home-
   stead exceptions, so the residency requirement isn’t what caused their injuries.
           13
             United Haulers Ass’n v. Oneida-Herkimer Solid Waste Mgmt. Auth., 550 U.S. 330,
   338 (2007); see also Tenn. Wine & Spirits Retailers Ass’n v. Thomas, 139 S. Ct. 2449, 2461
   (2019) (“reiterat[ing] that the Commerce Clause by its own force restricts state
   protectionism”).

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   v. Town of Clarkstown, 511 U.S. 383, 390 (1994).
          “[T]wo primary principles . . . mark the boundaries of a [s]tate’s
   authority to regulate interstate commerce”: A state (1) “may not discrim-
   inate against interstate commerce” and (2) may not “impose undue burdens
   on interstate commerce.” South Dakota v. Wayfair, Inc., 138 S. Ct. 2080,
   2090 (2018). But those principles do not apply with equal force.
          If a law discriminates against interstate commerce, it is in big trouble
   because “[a] discriminatory law is virtually per se invalid.” Dep’t of Revenue
   v. Davis, 553 U.S. 328, 338 (2008) (quotation omitted). It may be upheld
   “only if it advances a legitimate local purpose that cannot be adequately
   served by reasonable nondiscriminatory alternatives.” Ibid. (quotation omit-
   ted). If there are “any available alternative methods for enforcing [the gov-
   ernment’s] legitimate policy goals,” the law is unconstitutional. Dickerson v.
   Bailey, 336 F.3d 388, 402 (5th Cir. 2003) (emphasis added).
          In contrast, if a law merely imposes an incidental burden on interstate
   commerce, it faces much smoother sailing. Under Pike v. Bruce Church, Inc.,
   such a law will be upheld “unless the burden imposed on interstate commerce
   is clearly excessive in relation to the putative local benefits.” United Haulers,
   550 U.S. at 346 (plurality opinion) (alteration adopted) (quoting Pike, 397 U.S.
   at 142). “State laws frequently survive this Pike scrutiny, though not always,
   as in Pike itself.” Davis, 553 U.S. at 339 (citations omitted).
          The district court held that the residency requirement discriminated
   against interstate commerce. That was the right call. But the court then
   applied the Pike test to uphold the law. That was a mistake; it should have
   asked whether the City had reasonable nondiscriminatory alternatives to
   achieve its policy goals. Because there are many such alternatives, the resi-
   dency requirement is unconstitutional under the dormant Commerce Clause.

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                                                A.
           The City’s residency requirement discriminates against interstate
   commerce. A law is discriminatory when it produces “differential treatment
   of in-state and out-of-state economic interests that benefits the former and
   burdens the latter.” United Haulers, 550 U.S. at 338 (quotation omitted). A
   law may discriminate on its face, in purpose, or in effect. See Wal-Mart Stores,
   Inc. v. Tex. Alcoholic Beverage Comm’n, 945 F.3d 206, 213 (5th Cir. 2019);
   Allstate Ins. Co. v. Abbott, 495 F.3d 151, 160 (5th Cir. 2007). But the only form
   of discrimination that implicates the dormant Commerce Clause is discrim-
   ination between “substantially similar entities.” Davis, 553 U.S. at 342 (quo-
   tation omitted).
           The residency requirement discriminates on its face against out-of-
   state property owners. The City doesn’t just make it more difficult for them
   to compete in the market for STRs in residential neighborhoods; it forbids
   them from participating altogether. The City prohibits anyone from using a
   property as an STR unless the owner has a permit. 14 And the City does not
   offer permits for STRs in residential neighborhoods unless the STR is
   “located on the same lot of record as the owner’s primary residence” and the
   owner has a homestead exemption for that property. 15 The upshot is that only
   residents of the City may enter the market for STRs in residential
   neighborhoods. 16

           14
           New Code §§ 26-615(a), 26-617(a); CZO § 20.3.LLL.1(b), (f ). In this context,
   “owner” means the person who owns at least 50% of an STR. See New Code § 26-614;
   CZO § 20.3.LLL.3(h).
           15
                New Code § 26-617(c)(6)(v); CZO § 20.3.LLL.3(h).
           16
               That makes Rosenblatt v. City of Santa Monica, 940 F.3d 439 (9th Cir. 2019),
   inapposite. That case upheld an STR regulation requiring someone to live on the property
   full time, but that person did not need to be the owner of the property. Id. at 450–51. Thus,
   the challenged regulation permitted out-of-staters to enter Santa Monica’s STR market on

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           Residents and out-of-state property owners are also “substantially
   similar.” Davis, 553 U.S. at 342 (quotation omitted). Both are private bus-
   inesses, not public entities carrying out traditional government functions. See
   id. at 341–43; United Haulers, 550 U.S. at 342–45. And both seek to compete
   in the market for lodging in the City’s residential neighborhoods. See Gen.
   Motors Corp. v. Tracy, 519 U.S. 278, 299 (1997). Out-of-staters want to offer
   the same services to the same customers in the same locations as the City’s
   residents. The only difference between them is that one group doesn’t live in
   the City. That means the residency requirement discriminates against inter-
   state commerce for purposes of the dormant Commerce Clause.
           The City objects to that conclusion on three grounds, but none is
   persuasive.
           First, the City maintains that it did not adopt the residency require-
   ment to protect its residents from interstate competition. Instead, it wanted
   to address the nuisances created by STRs by making sure that a responsible
   adult lived on the property full-time. But even if that account is true, the
   dormant Commerce Clause prohibits more than laws with protectionist pur-
   poses. It also prohibits laws that discriminate against interstate commerce on
   their face. Wal-Mart, 945 F.3d at 213. And “the purpose of, or justification
   for, a law has no bearing on whether it is facially discriminatory.” Or. Waste
   Sys., Inc. v. Dep’t of Env’t Quality of Or., 511 U.S. 93, 100 (1994). As we have
   already explained, the residency requirement is just such a law.
           Second, the City observes that it allows out-of-staters to own STRs in
   nonresidential neighborhoods. From there, it reasons that the residency
   requirement does not “entirely prohibit interstate commerce” in the citywide
   market for temporary lodging. There is good reason to reject the City’s mar-

   equal terms as residents.

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   ket definition. Its own study recognized that residential STRs offer guests
   unique opportunities to immerse themselves in the City and have an authen-
   tic “New Orleans” experience. As the saying goes, “location, location, loca-
   tion” is what really matters in property markets. But in any event, even if the
   residency requirement merely imposes a discriminatory burden on interstate
   commerce, it still qualifies as discriminatory. See, e.g., Or. Waste Sys., 511 U.S.
   at 99–100.
           Finally, the City emphasizes that the residency requirement discrim-
   inates against other Louisianans, not just out-of-staters. Residents of Baton
   Rouge and Shreveport are just as forbidden from participating in the STR
   market as are residents of Houston and Jackson. Indeed, the residency
   requirement even discriminates against other residents of the City—
   specifically, those who live in non-residential zones. But none of that matters.
   As the Supreme Court has repeatedly held, local ordinances that discriminate
   against interstate commerce are not valid simply because they also discrimin-
   ate against intrastate commerce. 17
           C & A Carbone provides the most recent example. That case involved
   a municipality that sought to finance the construction of a new waste-transfer
   station. C & A Carbone, 511 U.S. at 386. To do so, the town let the builder
   run the station for five years while charging above-market prices. Id. at 387.
   The town guaranteed that the station would continue to receive waste despite
   the uncompetitive prices by passing a “flow control ordinance” that “re-
   quire[d] all nonhazardous solid waste within the town to be deposited at the
   [new] transfer station.” Ibid.

           17
               C & A Carbone, 511 U.S. at 391; Fort Gratiot Sanitary Landfill, Inc. v. Mich. Dep’t
   of Nat. Res., 504 U.S. 353, 361 (1992); Dean Milk Co. v. City of Madison, 340 U.S. 349, 354 n.4
   (1951); cf. Brimmer v. Rebman, 138 U.S. 78, 82–83 (1891).

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          A legal battle between the town and a waste-processing firm that vio-
   lated the ordinance ultimately made its way to the Supreme Court. Id. at 387–
   89. The Court held that the flow ordinance violated the dormant Commerce
   Clause because it “deprive[d] out-of-state businesses of access to a local
   market”—i.e., the market for processing the town’s trash—and thus “dis-
   criminate[d] against interstate commerce.” Id. at 389–90. The Court didn’t
   care that the flow ordinance also discriminated against nonlocal trash facili-
   ties within the same state. “The ordinance is no less discriminatory because
   in-state or in-town processors are also covered by the prohibition.” Id. at 391.
          Thus, the fact that the residency requirement also discriminates
   against intrastate interests doesn’t change a thing. The residency require-
   ment still discriminates on its face against interstate commerce. That means
   it can be upheld only if it satisfies the dormant Commerce Clause’s stringent
   test for discriminatory laws, not the Pike test.

                                          B.
          Our conclusion that the residency requirement is discriminatory puts
   it on death’s doorstep. Recall that “[a] discriminatory law is virtually per se
   invalid.” Davis, 553 U.S. at 338 (quotation omitted). This case is no excep-
   tion. The residency requirement can “survive only if it advances a legitimate
   local purpose that cannot be adequately served by reasonable nondiscrimin-
   atory alternatives.” Id. (quotation omitted).
          On appeal, the City offers three interests served by the residency
   requirement: preventing nuisances, promoting affordable housing, and pro-
   tecting neighborhoods’ residential character. There’s no question that those
   are legitimate local purposes. But all those objectives can adequately be
   served by reasonable nondiscriminatory alternatives, so none of them can
   justify the requirement.
          First, the City claims that the homestead requirement is necessary to

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   address the nuisances that were associated with STRs under the initial
   regime. The homestead requirement targets those problems by requiring an
   STR’s owner to live on the premises, thus increasing the chance that
   nuisances are nipped in the bud and encouraging owners to rent to quieter
   guests in the first place.
          The residency requirement might help the City achieve that goal, but
   there are many other reasonable alternatives that the City could adopt. Take
   enforcement policies. The City could step up its enforcement efforts,
   increasing the chance that owners face punishment for disorderly guests and
   strengthening their incentive to monitor their rentals. It could also increase
   the magnitude of penalties it imposes on owners for guests who violate
   quality-of-life regulations. That would similarly give owners stronger incen-
   tives to prevent nuisances and help to fund increased enforcement. The City
   could even strip repeat offenders of their STR licenses, thus eliminating the
   STRs most likely to negatively impact their neighbors.
          There are also several other options beyond enforcement. For exam-
   ple, the City could increase taxes on STRs.          That would discourage
   younger—and rowdier—guests from renting them and provide additional
   funds that could also be used to mitigate nuisances. The City could give STR
   owners the alternative of having an operator stay on the property during the
   night—thus acting as the “adult supervision” that the City ostensibly hopes
   live-in owners will provide.
          Second, the City says that the residency requirement helps to preserve
   affordable housing. That might be true, given that the provision reduces
   demand—and therefore the price—for housing by restricting the number of
   persons who can participate in the STR market. But the City could reduce
   the demand for housing in other ways, such as increasing the price of an STR
   license for owners or capping the number of licenses available for any given

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                                          No. 21-30643

   neighborhood. Moreover, if the City is serious about protecting affordable
   housing, there’s an obvious alternative to reducing demand: increasing sup-
   ply. The City could eliminate price controls, reduce housing regulations, and
   provide additional incentives for homebuilders to construct more housing.
          Indeed, given the fact that the City itself found that “[t]here are a
   number of broader factors which have affected the housing market over the
   past decade which have led to increased costs,” it’s difficult to believe that it
   could show that residency requirement is necessary to address affordable
   housing problems. Remember that if there are “any available alternative
   methods for [achieving the government’s] legitimate policy goals,” the resi-
   dency requirement is invalid. Dickerson v. Bailey, 336 F.3d 388, 402 (5th Cir.
   2003). Because the City has many other options to promote affordable hous-
   ing, that objective can’t sustain the residency requirement.
          Finally, the City appears to claim that the homestead requirement is
   necessary to preserve neighborhood character. The City’s position appears
   to be that the old regulatory regime permitted too many housing units to be
   converted into rental units—thus beginning to change the residential char-
   acter of some neighborhoods. But once again, there’s an obvious and
   straightforward alternative to discrimination: cap the share of housing units
   that can be used as STRs. That would achieve the City’s objective without
   engaging in discrimination, so the residency requirement is unconstitutional.
                                          * * * *
          The City has many options to address the problems caused by STRs
   in residential neighborhoods. But it chose one the Constitution forbids. So
   we vacate the summary judgment for the City on this claim. 18

          18
               We do not reverse the judgment because the plaintiffs did not move for summary

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                                            No. 21-30643

                                                 IV.
           That leaves the City’s cross-appeal. It challenges the district court’s
   “holding” that the plaintiffs’ prior-restraint claim is “viable.” But we lack
   jurisdiction to resolve it because that “holding” is not a final judgment.
           Recall that the plaintiffs requested a declaration and a permanent
   injunction in connection with their prior-restraint claim. When they did not
   move for summary judgment on that claim, the district court sua sponte
   instructed the parties to brief it. Based on that briefing, it held that the prior
   restraint claim was “viable.”
           The plaintiffs then moved for partial entry of judgment under
   Rule 54(b) on all their claims, save their requests for attorneys’ fees under
   42 U.S.C. § 1988. The district court granted that motion in an order that
   stated that it had “decided” the plaintiffs’ prior restraint claims. The court
   also entered a “judgment” that “dismissed” all of their claims “except for
   any 42 U.S.C. [§] 1988 claims arising from First Amendment prior restraint
   violations.” But that judgment did not grant the plaintiffs a declaration or a
   permanent injunction, as they had requested in their complaint.
           As relevant here, we have jurisdiction to review only “final decisions
   of the district courts.” 28 U.S.C. § 1291. Although the district court called
   its order a “judgment,” its label does not determine finality. Sullivan v.
   Finkelstein, 496 U.S. 617, 628 n.7 (1990). Instead, “[a] final decision is one
   by which a district court disassociates itself from a case” and “terminate[s]
   an action.” Gelboim v. Bank of Am. Corp., 574 U.S. 405, 408–09 (2015)
   (quotations omitted). Accordingly, a final order must also specify the remedies
   that the victorious plaintiffs will receive. 19 Because the judgment did not

   judgment in the district court.
           19
                See Riley v. Kennedy, 553 U.S. 406, 419 (2008) (“We have long held that an order

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                                            No. 21-30643

   resolve the plaintiffs’ requests for a declaration or permanent injunction, it is
   not final for purposes of § 1291.
           The story is the same even if we generously construed the district
   court’s “holding” as a declaration. The plaintiffs’ request for a permanent
   injunction would still remain. For a claim to be final after being severed under
   Rule 54(b), a district court must have “disposed of that claim entirely.” 20 And
   that means that if some of the plaintiff’s requests for relief are “left unre-
   solved,” the district court’s order is not yet final. 21 Hence, we previously
   have rejected claims of finality when a district court granted a declaration but
   failed to resolve the plaintiff’s requests for other relief. 22 So too here.

   resolving liability without addressing a plaintiff’s requests for relief is not final.”); see also
   15B Charles Alan Wright & Arthur R. Miller, Federal Practice &
   Procedure § 3914.28 (2d ed.), Westlaw (Apr. 2022 update) (“[A] summary judgment
   that determines liability but leaves damages or other relief open for further proceedings is
   not final.”).
           20
              Tetra Techs., Inc. v. Cont’l Ins. Co., 755 F.3d 222, 228 (5th Cir. 2014) (quotation
   omitted and alteration adopted). Note, however, that a plaintiff’s request for costs and
   attorneys’ fees “does not prevent . . . [a] judgment from becoming final for purposes of
   appeal.” See Ray Haluch Gravel Co. v. Cent. Pension Fund of Int’l Union of Operating Eng’rs,
   571 U.S. 177, 179 (2014).
           21
               Liberty Mutual Ins. Co. v. Wetzel, 424 U.S. 737, 740–42 (1976); see also
   15B Charles Alan Wright & Arthur R. Miller, Federal Practice &
   Procedure § 3915.2 (2d ed.), Westlaw (Apr. 2022 update) (“Partial determinations of
   relief do not establish finality any more than a determination of liability alone.”). Granted,
   Wetzel’s discussion of that issue is only dicta under binding precedent. See United States v.
   Miss. Power & Light Co., 638 F.2d 899, 904 (5th Cir. Unit A Mar. 1981). Still, as dicta from
   a unanimous Supreme Court, it is entitled to great weight. Cf. Campaign for S. Equal. v.
   Bryant, 791 F.3d 625, 627 n.1 (5th Cir. 2015).
           22
              See Lucas v. Bolivar Cnty., 756 F.2d 1230, 1234–35 (5th Cir. 1985) (per curiam).
   A later case suggests that a declaration can be immediately reviewable even when a district
   court has not addressed all forms of relief requested by the parties. See St. Paul Mercury Ins.
   Co. v. Fair Grounds Corp., 123 F.3d 336, 338 & nn.5, 9 (5th Cir. 1997). But Lucas predates
   that case and therefore controls. Newman v. Plains All Am. Pipeline, L.P., 23 F.4th 393,
   400 n.28 (5th Cir. 2022). And although Lucas’s analysis of that issue is an alternative hold-

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                                            No. 21-30643

           Given our suspicions that we lacked jurisdiction, we asked the parties
   to be prepared to discuss this issue at oral argument. There, the City ap-
   peared to concede that the district court’s order was not final because it had
   not resolved the plaintiffs’ requests for relief. So far, so good.
           But the City then claimed that even if the district court’s holding were
   not final, we nonetheless have appellate jurisdiction to review whether it had
   jurisdiction over the case. It maintained that we have recognized as much in
   International Association of Machinists, Local 2121 v. Goodrich Corp., 410 F.3d
   204 (5th Cir. 2005). But that case said no such thing. Goodrich noted that
   even if we “[a]rguably” had that sort of appellate jurisdiction, it was not
   implicated in that case because the district court did not “wholly lack[ ] jur-
   isdiction.” See id. at 211–14. Because that case merely assumed, for the sake
   of argument, that such jurisdiction existed, its discussion is dicta. Today, we
   hold that we have no interlocutory appellate jurisdiction for policing a district
   court’s jurisdictional holdings beyond what this court or the Supreme Court
   has already recognized. 23 And that means we do not have jurisdiction over
   the City’s cross-appeal.
           The judgment is AFFIRMED in part and VACATED in part. The
   cross-appeal is DISMISSED for want of jurisdiction.

   ing, “[t]his circuit follows the rule that alternative holdings are binding precedent and not
   obiter dictum.” Texas v. United States, 809 F.3d 134, 178 n.158 (5th Cir. 2015) (quotation
   omitted), aff’d by an equally divided Court, 579 U.S. 547 (2016).
           23
               See, e.g., Shepherd v. Int’l Paper Co., 372 F.3d 326, 328–29 (5th Cir. 2004) (citing
   Phillips v. Negley, 117 U.S. 665, 671–72 (1886), for the rule that we have jurisdiction to review
   whether a district court had jurisdiction to vacate a judgment).

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