Bad news for Airbnb. A federal judge rejected its lawsuit challenging a 2015 San Francisco city ordinance requiring all hosts to register with the city or face a fine of $1k/day per citation.

Airbnb claimed this ordinance violated the Communications Decency Act of 1996, which protects online businesses from being sued for user-produced content. HomeAway was a co-plaintiff in the lawsuit, reports the San Francisco Business Times.

While Federal District Court Judge James Donato dismissed Airbnb’s claims, he also said the ordinance should be suspended since there is no clear way to enforce it. He told Airbnb and the city to try to work on a joint proposal for how to enforce the law before a Nov. 17 hearing.

Airbnb has been trying to work with San Francisco’s concerns and recently restricted users to renting out a single property per user in San Francisco and banned any discrimination against renters. But San Francisco Supervisor David Campos, who authored the city's ordinance, previously told us this doesn't address the city's main grievances.

“While no one in San Francisco’s city government wants to see a homegrown company like Airbnb go out of business, it’s our job to protect the housing stock of our citizens,” Campos told the Business Times regarding the ruling. “And while San Franciscans appreciate tech and innovation, they also appreciate not being evicted from their homes so landlords can Airbnb."

So far only about 1,700 houses are registered through the city out of 8,000 to 10,000 homes listed on Airbnb. The city has been working fast to catch up. [SFBT]