## Facts

- Chicago enacted the Residential Landlord and Tenant Ordinance (RLTO) in September 1986 to protect public health, safety, and welfare and to define landlord and tenant rights and duties.
- The RLTO applied to most residential rental units, with exceptions including certain owner-occupied small buildings and specified institutional or transient housing.
- The ordinance imposed maintenance and habitability duties on landlords and provided tenant remedies, including mechanisms tied to repairs, essential services, and security-deposit protections, with statutory damages and attorney-fee provisions.
- A group of property owners, managers, and related organizations sued the City and the Mayor, seeking to block the RLTO as unconstitutional; tenants and tenant organizations intervened in support of the City.
- The district court issued a temporary restraining order on the eve of the RLTO’s effective date, then denied a preliminary injunction and dissolved the order, finding plaintiffs had not shown a sufficient likelihood of success on the merits.
- Plaintiffs took an interlocutory appeal from the denial of preliminary injunctive relief; the court of appeals expedited the matter and declined interim relief pending appeal.

## Issues

1. Whether the district court abused its discretion in denying a preliminary injunction on the ground that plaintiffs failed to show a likelihood of success on their constitutional challenges to the RLTO.
2. Whether the RLTO was so arbitrary or irrational as to violate substantive due process under rational-basis review.
3. Whether the RLTO’s classifications and targeted regulation of residential landlords violated equal protection under rational-basis review.
4. Whether plaintiffs made a sufficient showing, at the preliminary-injunction stage, that the RLTO’s regulatory burdens were confiscatory or otherwise constitutionally impermissible.

## Decision

- The Seventh Circuit affirmed the denial of a preliminary injunction.
- The court held that plaintiffs had not demonstrated a sufficient likelihood of success on the merits of their due process and equal protection claims under rational-basis review.
- The court concluded the RLTO could reasonably be viewed as furthering legitimate municipal interests in housing quality and in regulating landlord-tenant relations.
- Judges Posner and Easterbrook concurred in the judgment, agreeing that preliminary injunctive relief was unwarranted under governing constitutional doctrine while criticizing the ordinance’s likely economic effects.

## Legal Principles

- Social and economic regulation by a municipality is reviewed under deferential rational-basis scrutiny when no fundamental right or suspect classification is implicated.
- Under rational-basis review, legislation is upheld if any conceivable rational relationship exists between the law’s provisions and legitimate governmental objectives.
- Equal protection permits incremental regulation; a legislature may address perceived problems step by step and need not regulate all related conduct or actors at once.
- Courts do not invalidate economic regulation merely because it may be inefficient or unwise as a matter of policy; constitutional review is not a vehicle for reweighing legislative costs and benefits.
- A preliminary injunction requires the moving party to make a strong showing on likelihood of success; speculative or undeveloped constitutional objections ordinarily do not justify pre-enforcement injunctive relief.

## Conclusion

The court of appeals upheld the district court’s refusal to preliminarily enjoin Chicago’s landlord-tenant ordinance, ruling that the challengers had not shown a probability of success under highly deferential rational-basis review, even though concurring judges questioned the ordinance’s economic consequences.


Chicago Board of Realtors, Inc. v. City of Chicago, 819 F.2d 732 (7th Cir. 1987)