East Hampton Judge Throws Out Airbnb Subpoena Towns Had Hoped Could Be a New Weapon Against Short-Term Rental Violators

East Hampton Town Justice Lisa Rana has ruled that Airbnb records that showed a Montauk property owner had rented his property 59 separate times in 10 months cannot be used as evidence against the man, because the records were acquired by an improperly issued and executed subpoena.

The town attorney’s office had asked for and was granted a subpoena issued by Justice Stephen Tekulsky and sent to Airbnb’s headquarters in California, demanding that the company submit the records of payment for rentals of the cottages at 65 South Elroy Drive in Montauk, which is owned by Harvey Elgart.

The company complied with the subpoena and handed over payment records showing dozens of rentals, in stark violation of the town’s residential rentals law, which allow just two rentals in a season, of 14 days or less.

Elgart was charged in the town justice court with a multitude of violations and town officials said they hope that using subpoenas to uncover records of extensive violations of town rental laws could be a key to overcoming previously complicated and drawn-out methods of proving that someone has violated the town’s restrictions on short-term rentals.

But Elgart’s attorney, Lawrence Kelly, argued that the subpoena that revealed proof of the illegal rentals was issued improperly and that the evidence received from it should be suppressed and the case against Elgart thrown out.

The veteran town justice, who is retiring at the end of the year, agreed, in part, saying that except in rare specified instances a subpoena may not be used as an investigative tool and may only be issued with relation to an already pending court proceeding.

She also said the assistant town attorney who was handling the prosecution, David McMaster, had improperly served the subpoena outside of New York State and directed the subpoenaed information to be sent to him, when it otherwise must be submitted directly to a grand jury or a court officer.

“[The] law clearly states that subpoenas … are not to be used for investigative purposes,” Rana wrote in her decision, which was released last week. “In short, while it may be a difficult task for a prosecutor or law enforcement agency to gather evidence that is adequate to commence charges in cases similarly situated, the court cannot condone improper criminal practices in their efforts to do so, nor will the court turn a blind eye and disregard such conduct.”

Rana noted that there are specific circumstance in which a municipality has been given the power to issue investigative subpoenas — including in an almost identical instance to the local matter, wherein New York City was given the power to subpoena Airbnb records in its investigation of rental violations to address quality of life issues. But Rana said the town has not shown that it has been given the same such authority by the state.

Rana did not dismiss the charges against Elgart, which remain. McMaster resigned from the town attorney’s office last week.

Nonetheless, Kelly applauded her ruling. “This is an important capstone to Judge Rana’s judicial career,” he said. “It reinforces the role the judiciary has in enforcing guard rails against prosecution misconduct.”

Town Attorney Robert Connelly said that the town is considering appealing the decision and how it may proceed regarding employing subpoenas in short-term-rental cases in the future.

“Obviously, the town disagrees with the decision and is weighing an appeal,” he said in a message.