The Missouri Supreme Court says a Web-based business that connects renters and landlords is breaking the law because the people who run it aren't licensed real-estate professionals.
Kansas City Premier Apartments is a free site that allows renters to search for apartments on both sides of the state line. The company makes its money from property owners, who pay for referrals. The business model hit a snag, however, when the Missouri Real Estate Commission objected to the fact that Kansas City Premier Apartments' principals didn't belong to the Guild of the Gold Blazer.
The case went to court. A judge in Platte County sided with the real estate commission and barred Kansas City Premier Apartments from accepting money from referrals. The company was also prevented from offering $100 gift cards to renters who verified to their new landlords that they had used kcpremieraparts.com.
Attorneys working for Kansas City Premier Apartments argued that the site was protected by the First Amendment. But the Supreme Court didn't buy it. In a 5-2 decision, the court ruled that Kansas City Premier Apartments crossed a line that separates protected commercial speech from activities that have been deigned to require a license.
The dissenters, Judge Michael A. Wolff and Chief Justice Richard Teitelman, felt that the free speech theory had merit. In their view, the real-estate profession was acting in the manner of a cartel. Wolff, who wrote the dissenting opinion, said occupational licensing provisions "can be analogized to the merchants' guilds of medieval times." This was not intended as a compliment.
The state's paternalistic view that only licensed real-estate agents somehow possess accurate and valid information may be insulting to consumers and unlicensed persons but that is not the point -- the point is that the regulation violates the First AmendmentKansas City Premier Apartments' business in Kansas is unaffected by the decision. The company's site continues to list information about Missouri-side apartments with the caveat that renters are ineligible to receive the $100 reward. According to a story in The Daily Record, even if Kansas City Premier Apartments' owners obtained Missouri real-estate licenses, the rules would prohibit them from issuing the gift cards.
Kansas City Premier Apartments' attorneys say they plan to appeal the decision to the U.S. Supreme Court.
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One of the important things to remember is that the U.S. Supreme Court has held that the First Amendment protects forms of speech such as nude dancing, flag burning, and depictions of small animals being crushed to death. In this case, the government offered no evidence whatsoever that the information KCPA was providing about apartments was likely to mislead or cause harm to anyone. Yet a majority of the Missouri Supreme Court ignored the U.S. Supreme Court's precedents to conclude that this truthful, harmless speech doesn't deserve constitutional protection. Judge Wolff and Chief Justice Teitelman got it right, and we are hopeful that the U.S. Supreme Court will agree to take up this case and clarify once and for all that if free speech means anything, it means the government can't make it a criminal offense to share truthful information that isn't hurting anybody.
Dave Roland
Freedom Center of Missouri
Attorney for Kansas City Premier Apartments
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