Airbnb Gets Crucial Section 230 Win Over Unauthorized Subleases–La Park La Brea v. Airbnb

[It’s impossible to blog about Section 230 without reminding you that it remains highly imperiled.]

Many of Airbnb’s short-term rental listings are illegal. For example, some listings violate local ordinances regulating short-term rentals. Also, apropos to this case, some listings constitute unauthorized sublease. Airbnb has no idea which listings violate their leases. If Airbnb is liable for such listings, it faces substantial exposure and its inventory will undoubtedly shrink.

The plaintiffs own thousands of apartment units in Los Angeles. The landlords allegedly have express no-Airbnb clauses in their leases. The landlords complain about various ill-effects attributable to unauthorized Airbnb rentals. As usual, because Airbnb does not disclose its vendors’ names or exact addresses, the landlords can’t easily find and punish the lease-breakers. Further, Airbnb told the landlords “that it does not review lease agreements or mediate disputes between hosts and property owners regarding leases.” However, Airbnb tries to divert angry landlords and HOAs into its “Friendly Buildings Program,” which cuts them into some revenue if they consent to the listings.

The landlords sued Airbnb using several state law theories. The court grants Airbnb’s 12(b)(6) dismissal motion based on Section 230, noting such early dismissals are proper per Kimzey and Barnes.

The landlords argued that Airbnb constituted an information content provider of the lease-breaking listings. The court says that Airbnb doesn’t “develop” those listings. Per, “development” only occurs if the defendant materially contributes to the alleged illegality of the content. The court concludes Airbnb doesn’t do that by (1) requiring “prospective hosts to include information such as home type, room type, location, description, name, email address, and phone number,” (2) offering “ancillary services such as user information verification, messaging systems, photography, local occupancy tax collection and remittance, a pricing tool, host insurance, a guest refund policy, or an autocomplete search function,” and (3) offering its Friendly Buildings Program. The court says:

what allegedly makes the listings “unlawful,” “illegal,” or “offending” is that they advertise rentals that violate Aimco’s lease agreements. Airbnb hosts—not Airbnb—are responsible for providing the actual listing information. Airbnb “merely provide[s] a framework that could be utilized for proper or improper purposes.”…Aimco does not explain how Airbnb’s failure to cease engaging in rental transactions with tenants whom Airbnb learns are violating their lease agreements, or Airbnb’s complaints to Aimco when Airbnb guests are denied access to Aimco’s properties, transforms Airbnb into an information content provider.

The landlords also argued that Airbnb profits from illegal subleases. The court responds that “Courts have granted CDA protection to websites that process payments and transactions in connection with third-party listings, including Airbnb.” It cites a Maine state court case that never showed up in my Westlaw alerts,  Donaher, III v. Vannini, 2017 WL 4518378 (Me. Super. Ct. Aug. 18, 2017), which held that Section 230 protected Airbnb from failing to remove listings and for processing payments. (That opinion also has some garbled and dubious discussion about Accusearch saying that if a user develops content in part, Airbnb categorically cannot also be a partial developer of that content). The court also cites StubHub v. Hill and several other cases. Finally, the court distinguishes Airbnb v. San Francisco because “Airbnb’s website features are central to Aimco’s claims” instead of the claims targeting only Airbnb’s booking services.

Section 230’s immunization of Airbnb here isn’t surprising. And it’s nice to see courts continue to read the term “develop” narrowly. Still, I can understand why the plaintiffs might be frustrated by this ruling. First, the plaintiffs could feel like they did focus on Airbnb’s booking services, just like the SF case did. Second, the ruling seemingly makes it very difficult for the landlords to crack down on subleasing tenants. They don’t know who is listing apartments on Airbnb, and Airbnb won’t tell them. Finally, they might feel like Airbnb’s Friendly Buildings Program tries to bribe landlords into acquiescence (and punish dissenting landlords by withholding the cash).

At the same time, there really is no way for Airbnb to determine when a sublease is permissible. Most landlords aren’t experts at contracts management, so even finding the right version of a lease sounds like an onerous challenge in many cases. There are good policy reasons not to make Airbnb an adjudicator of complicated fact questions that it lacks the facts (and possible expertise) to resolve.

Still, I have to wonder if this ruling will turn into a tactical win and strategic loss for Airbnb. First, the case may be appealed to the Ninth Circuit, always a risky proposition. Second, large landlords like the plaintiffs have many local regulator friends who can dream up new ways to make life difficult for Airbnb vendors and possibly Airbnb itself. So, I doubt we’ve heard the last of this issue.

Case citationLa Park La Brea A LLC v. Airbnb, Inc.2017 WL 6799241 (C.D. Cal. Dec. 29, 2017). The first amended complaint.

Some Related Posts:

Section 230 Helps VRBO Defeat Claim Over Fraudulent Listing–Hiam v. Homeaway
Another Collision of Housing Regulations and Online Innovation–SF Housing Rights Committee v. HomeAway
Section 230 Ruling Against Airbnb Puts All Online Marketplaces At Risk–Airbnb v. San Francisco