“Love letters” will live a little longer in Oregon real estate transactions after the federal district court in Portland issued a preliminary injunction on a new state law banning the practice.
In a real estate market where multiple buyers compete for seemingly every home, creativity can afford an edge. So it is that real estate agents often encourage “love letters” from buyers to sellers—those hand-crafted notes explaining (more or less) that the seller’s home is the stuff of dreams and would receive care and affection only if sold to the letter writers.
Evidence suggests these letters do in fact give buyers an edge. It also suggests that they can inject discrimination against protected classes, as sellers, consciously or not, select buyers who share their own traits. Worried that love letters were perpetuating biases and historic discrimination, the Oregon legislature banned the practice in 2021, in a law that limited brokers to exchanging nothing more than the “customary documents.”
Real estate brokerage Total Real Estate Group challenged the law in federal court, alleging that it abridged the First Amendment’s free speech protections. Oregon agreed that it intended to clamp down on commercial speech that invited discrimination, but nonetheless argued that the ban survived the Central Hudson test for commercial speech restrictions. Total sought a preliminary injunction.
After holding an evidentiary hearing and wrestling with what it considered to be the statute’s laudable goals, the Court ultimately concluded that the ban failed the test. The speech at issue was neither misleading nor unlawful and therefore received protection. The government’s interest in stamping out discrimination was compelling, and the ban directly advanced that interest.
The ban foundered upon the last factor: whether it was narrowly drawn. A complete ban on love letters encompassed a vast swath of protected and unobjectionable speech (a love letter’s observation about the home’s lovely garden and the writer’s love of gardening for instance), and other viable means could achieve the same ends without so much collateral damage. The state could train real estate agents in nondiscrimination; it could ban buyer photographs; or it could require agents to redact offending material, among other options.
Those alternatives proved fatal, at least at the preliminary injunction stage. We will continue to follow the case to see whether the law lives to fight another day.