California Internet Real Estate Restrictions

ForSaleByOwner.com v. Zinneman
IJ Challenges California's Licensing Requirement for Internet Ads of Homes for Sale By Owner

IJ clients and entrepreneurs, Colby Sambrotto and Damon Giglio, founders of ForSaleByOwner.com, a New York Internet advertising and information service.

May the government restrict the speech of real estate advertising websites by forcing them to become licensed?  The Institute for Justice doesn’t think so.  It filed a federal court lawsuit in U.S. District Court in Sacramento challenging California’s onerous licensing regime on behalf of two Internet real estate advertising companies — ForSaleByOwner.com and a California affiliate that publishes ForSaleByOwner.com magazine in Sacramento.  California requires Internet advertising companies, like ForSaleByOwner.com, to become licensed real estate brokers in order to provide their service.  The First Amendment guarantees not only that Americans may speak their minds without having to obtain approval of government censors, but that they may send and receive information vital to their daily lives as well.  Laws such as California’s that require a license to distribute such information or otherwise unreasonably impede its flow should be struck down.

This is an important test case with broad implications for e-commerce and First Amendment jurisprudence. At a time when information is more important to the economy than ever before, government remains a serious impediment to the free flow of information and the economic benefits it promises.