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Selden v. Airbnb Inc.

United States District Court, District of Columbia

November 1, 2016

GREGORY SELDEN, et al., Plaintiffs,
v.
AIRBNB, INC., Defendant.

          MEMORANDUM OPINION

          CHRISTOPHER R. COOPER United States District Judge.

         All of us who have signed up for an online service recently will recall the experience. After entering the service provider's website, we were presented with a “sign up” or “create account” button prominently displayed on the screen. Next to the button-less prominent, no doubt-was the ubiquitous advisory that, by signing up, we would be accepting the provider's “terms of service.” Perhaps there was a separate check-box prompting us to indicate our agreement to those terms. Regardless, eager to begin using the service and realizing that the provider's contractual terms are non-negotiable, most of us signed up without bothering to click the accompanying link to reveal the contractual terms. Those who did undoubtedly found numerous pages of legalese. The intrepid few who actually read all the terms almost certainly learned that one of them requires users to relinquish their right to have a jury resolve any dispute with the provider. And that another bars class actions. This experience, shared by countless people each day, gives rise to the dispute presently before the Court.

         Plaintiff Gregory Selden, who is African American, signed up with the popular residential rental service Airbnb in advance of a weekend getaway to Philadelphia. He created the required user profile, including his photograph, and contacted an Airbnb “host” about a promising listing. The host allegedly responded that the residence was not available. Smelling a rat, Selden created a second account under a pseudonym, with a photograph of a white person in the user profile, and contacted the same host about the same accommodation. This time, Selden claims, the host was only too happy to rent the residence.

         Selden filed suit against Airbnb for race discrimination on behalf of himself and fellow African-American travelers who have reported similar treatment on Airbnb. See, e.g., Elaine Glusac, As Airbnb Grows, So Do Claims of Discrimination, N.Y. Times (June 26, 2016), http://www.nytimes.com/2016/06/26/travel/airbnb-discrimination-lawsuit.html. Likening Airbnb to a hotel and its hosts to rental agents or hotel employees, Selden seeks to hold the company responsible under federal civil rights laws for the discriminatory conduct of those who offer accommodations on its website. Airbnb contests liability, although that issue is not before the Court because the company's standard Terms of Service-which it claims Selden accepted by signing up to use the site-contain a clause requiring all disputes to be resolved by an arbitrator. Civil lawsuits with a potential jury trial are prohibited. As are class actions.

         Invoking this clause, Airbnb moves to compel arbitration of Selden's claims. Selden responds that no contract exists-and therefore the arbitration clause does not apply-because the sign-up process did not place him on adequate notice that he was agreeing to Airbnb's Terms of Service, including mandatory arbitration. He further argues that, even if a contract was formed, the arbitration provision does not apply to discrimination suits and is unconscionable in any event.

         The Court must grant Airbnb's motion. No matter one's opinion of the widespread and controversial practice of requiring consumers to relinquish their fundamental right to a jury trial-and to forego class actions-as a condition of simply participating in today's digital economy, the applicable law is clear: Mutual arbitration provisions in electronic contracts-so long as their existence is made reasonably known to consumers-are enforceable, in commercial disputes and discrimination cases alike. And Airbnb's sign-up procedures were sufficiently clear to place Mr. Selden on notice that he was agreeing to the company's Terms of Service when he created an account. While that result might seem inequitable to some, this Court is not the proper forum for policy objections to mandatory arbitration clauses in online adhesion contracts. Such objections should be taken up with the appropriate regulators or with Congress.

         I. Background & Procedural Posture

         A. Selden's Use of Airbnb

         Gregory Selden and a friend planned a trip to Philadelphia in March 2015. Second Amend. Compl. ¶¶ 28-35. To book their accommodations, Selden turned to Airbnb, which describes itself as “a trusted community marketplace for people to list, discover, and book unique accommodations all around the world.” About Us, Airbnb, http://www.airbnb.com/about/about-us (last visited Oct. 24, 2016). Airbnb allows property owners or their representatives-“hosts” in the company's parlance-to list their accommodations on the platform, where travelers then attempt to book them. Def.'s Mot. Compel Arbitration (“MCA”), Decl. of Kyle Miller ¶ 2. While Airbnb facilitates the transactions, the hosts, alone, are responsible for deciding to whom they will offer their homes for short-term stays. Id.

         Selden first created his Airbnb account in March 2015, using an iPhone mobile device. Pl.'s Opp'n MCA, Decl. of Gregory Selden ¶ 2; Supp. Decl. of Kyle Miller ¶¶ 2, 4. Airbnb's mobile sign-up screen, attached as an appendix to this Memorandum Opinion, presented Selden with three options in descending order: “Sign up with Facebook, ” “Sign up with Google, ” and “Sign up with Email.” See Appendix. Below the “Sign up with Email” button was text that read: “By signing up, I agree to Airbnb's Terms of Service, Privacy Policy, Guest Refund Policy, and Host Guarantee Terms.” Id. The text contained hyperlinks to these various agreements. Id. Airbnb's Terms of Service include, among other provisions, a mandatory arbitration clause. Def.'s MCA, Ex. B, 16-18. Selden clicked “Sign up with Facebook” at the top of the page, and proceeded to create his Airbnb profile in order to use the service. Decl. of Gregory Selden ¶ 6.

         Selden's profile included a photograph of his face, along with other details like his name, age, and education. Shortly after creating his account, he inquired with a host about the availability of a listing that met his needs. Id. at ¶¶ 6-7. According to Selden, the host informed him that the accommodation was not available. Id. at ¶ 7. While browsing Airbnb later that day, however, Selden noticed that the listing was still posted. Id. at ¶ 8. Suspecting that he was denied accommodations due to his race, Selden created two fictitious Airbnb accounts with profile photos depicting white men. Id. He then used those accounts to apply to the same listing, and, he claims, the host accepted both. Id. Selden later took to social media with his claims of discrimination, and the hashtag “#airbnbwhileblack” quickly went viral. Second Amend. Compl. ¶ 50.

         B. Airbnb's Terms of Service

         Airbnb's Terms of Service at the time Selden signed up for Airbnb spanned seventeen single-spaced pages and began with the following statement:

PLEASE READ THESE TERMS OF SERVICE CAREFULLY AS THEY CONTAIN IMPORTANT INFORMATION REGARDING YOUR LEGAL RIGHTS, REMEDIES AND OBLIGATIONS. THESE INCLUDE VARIOUS LIMITATIONS AND EXCLUSIONS, A CLAUSE THAT GOVERNS THE JURISDICTION AND VENUE OF DISPUTES, AND OBLIGATIONS TO COMPLY WITH APPLICABLE LAWS AND REGULATIONS.

         Pl.'s MCA, Ex. B, 2. The “Dispute Resolution” clause, by which Airbnb seeks to compel arbitration, appeared on page fifteen of the document:

You and Airbnb agree that any dispute, claim or controversy arising out of or relating to these Terms or the breach, termination, enforcement, interpretation or validity thereof, or to the use of the Services or use of the Site or Application (collectively, “Disputes”) will be settled by binding arbitration, except that each party retains the right to seek injunctive or other equitable relief in a court of competent jurisdiction to prevent the actual or threatened infringement, misappropriation or violation of a party's copyrights, trademarks, trade secrets, patents, or other intellectual property rights. You acknowledge and agree that you and Airbnb are each waiving the right to a trial by jury or to participate as a plaintiff or class member in any purported class action or representative proceeding. If this specific paragraph is held unenforceable, then the entirety of this “Dispute Resolution” section will be deemed void. Except as provided in the preceding sentence, this “Dispute Resolution” section will survive any termination of these Terms.

         Def.'s MCA, Ex. B, 16 (emphasis added). The section continued that any arbitration proceedings shall be administered by the American Arbitration Association and offered general details about the arbitration process. Id. at 16-18.

         C. Procedural History

         Selden filed a putative class action suit against Airbnb in this Court on May 17, 2016, and has since twice amended his Complaint. He is the sole named Plaintiff. See Second Amend. Compl. Selden alleges that Airbnb violated Title II of the Civil Rights Act of 1964, 42 U.S.C. § 2000a, which prohibits race discrimination in public accommodations; the Civil Rights Act of 1866, 42 U.S.C. § 1981, which prohibits race discrimination in the formation of contracts; and the Fair Housing Act, 42 U.S.C. § 3604, which prohibits race discrimination in the sale or rental of housing. Id. at ¶¶ 53-72. Airbnb moved to compel arbitration on July 13, 2016. See Def.'s MCA. The Court heard oral argument on the motion on October 12, 2016.

         II. Le ...


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