Judge Orders Oregon To Pause Its Homebuyer Love-Letter Ban

A U.S. district judge agreed these letters can lead to discrimination, but said the state law goes too far in restricting free speech.

Seller’s agents in Oregon may resume passing so-called “love letters” from homebuyers to their clients — at least for now — as a legal challenge to the law continues to work its way through the courts.

U.S. District Judge Marco A. Hernandez on Thursday granted a preliminary injunction against Oregon’s first-of-its-kind ban on love letters, ordering a temporary halt to enforcement of the law. Lawmakers behind the policy argued these letters opened the door for illegal housing discrimination by sellers.

In the court order, Hernandez wrote that the group suing the state was “likely to succeed” on the merits of its claim that the Oregon law violates the First Amendment of the U.S. Constitution.

“It is not in the public interest to enforce a law that is likely unconstitutional, even one aimed at the laudable goal of reducing unlawful discrimination in housing,” Hernandez wrote in the opinion.

The law went into effect in January. The injunction marks the next stage of the lawsuit filed in November by Oregon-based Total Real Estate Group. The brokerage’s attorney, Daniel Ortner of Pacific Legal Foundation, said the decision marks a victory for free speech.

“Today’s ruling preserves the opportunity of home-buyers to speak freely to sellers and make the case why their purchase offers should win out,” Ortner said in a statement. “Love letters communicate information that helps sellers select the best offer. The state cannot ban important speech because someone might misuse it.”

A spokesperson for the Oregon Real Estate Agency confirmed to Inman that the state will not enforce the law “unless a further court order allows the law to go into effect.” The Oregon attorney general’s office declined to comment on the case. 

In previous conversations with Inman, agents in Oregon had a range of experiences with love letters. Some said they saw how the information in the letters could empower sellers to act on biases. Others said the strength of the offer was usually what won the day, not the personal appeals from the buyer.

The judge ordered the suspension of the law’s enforcement despite concurring with the state of Oregon’s argument that these letters can contribute to discrimination.

While the state could not identify specific examples of a seller discriminating based on the information in a love letter, Hernandez said there was “significant circumstantial evidence” supporting the idea.

“Accordingly, Oregon legislators drew a reasonable inference that prohibiting the transmission of love letters through seller’s agents will reduce unlawful discrimination in homeownership,” Hernandez wrote.

Still, the specter of discrimination was not enough to tip the scales in favor of the state law. Hernandez said the law could have been tailored more narrowly to achieve its objective, without affecting the protected forms of speech in these letters.

“As its means, the government chose an approach that has the effect of significantly limiting truthful, nonmisleading speech,” Hernandez said.

In a news release Friday, the libertarian legal group representing Total Real Estate Group said the law harmed the brokerage’s ability to find the right homes for its clients.

“The letters often prompt sales below the top monetary offer, creating opportunities for first-time homeowners and giving sellers peace of mind that their home ends up in caring hands,” Pacific Legal Group said in the release.

The preliminary injunction ensures the law will remain unenforced as the lawsuit winds its way through the courts. The law’s ultimate fate has yet to be decided.

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