Airbnb Gets Mixed Results in Challenge to Boston’s Anti-Airbnb Law–Airbnb v. Boston

Boston enacted a law against short-term housing rentals that included these provisions: (1) a $300/violation/day fine for booking illegal short-term rentals (the “penalties” provision), (2) a city-wide ban on booking agents that don’t honor notice-and-takedown or verify vendor licenses (the “enforcement” provision), and (3) mandatory reporting about bookings (the “data” provision). Airbnb sought a preliminary injunction against these provisions, relying on Section 230 and other objections.

Endorsing Airbnb’s San Francisco (one of my top 10 Section 230 cases of all time) and Santa Monica decisions, the court says Section 230 does not preempt the penalties provision, which:

is aimed at regulating Airbnb’s own conduct, and not at punishing it for content provided by a third party….The fine is neither expressly tied to the content of the underlying listing, nor explicitly aimed at penalizing the manner in which Airbnb has structured its booking and payment services. It is triggered based on Airbnb’s own conduct as a participant in the rental transaction, and it simply requires Airbnb “to crossreference bookings against” the City’s list of ineligible units before collecting its fees, thereby “fairly charg[ing]” Airbnb “with keeping abreast of the law” governing its own behavior.

In my San Francisco and Santa Monica posts, I critiqued why courts are wrong to bifurcate between transactions and content and downplay the censorious effect of verification obligations. In response, the court invokes the “lawless no-man’s land” language that traces its origins to (even though I’ve noted repeatedly observed that a puppy has a bad day every time a court invokes the phrase):

This Court is not persuaded that Congress, in enacting the CDA, intended to grant blanket immunity to all of a multifaceted company’s conduct simply because the company can point to one part of its business involving publication of third-party content, and can then imagine ways in which regulation of its other conduct—no matter how attenuated from its online publication functions—will “force” it to make changes to the design of its platform. As a matter of law, the Court concludes that the Penalties provision reaches Airbnb in its capacity as a booking agent and payment processor. In doing so, it imposes no liability, nor requires any action, that necessarily arises from Airbnb’s publication of content provided by another.

In a footnote, the court emphasized “the threatened fine arises from Airbnb’s collection of a fee for booking an ineligible rental unit, and in no way depends on anything a unit’s owner says when advertising the rental.”

The court says that its result won’t require Airbnb to eliminate its transaction functions. Instead, the court thinks Airbnb can rely on the indemnity provision in its TOS (Seriously??? Yes, seriously) to make vendors pay what it characterizes as a “relatively modest fine.” What makes a fine of $300/violation/day modest? It’s less than the fines and criminal sanctions that other cities have tried to impose. Raise your hand if you can think Airbnb could actually get its vendors to indemnify it.

While the court’s result follows the San Francisco and Santa Monica decisions, Airbnb reasonably argued that, in light of the Doe v. Backpage opinion and others, the First Circuit’s Section 230 jurisprudence is broader than the Ninth Circuit’s. The court disagrees: “Having considered the relevant First and Ninth Circuit decisions, this Court perceives no material differences in how the two Courts of Appeals interpret the CDA. Indeed, the Jane Doe decision discusses Ninth Circuit precedent without distinguishing or questioning it, including with respect to the critical prong of the inquiry here.” If I were asking the Supreme Court to deny a Section 230 cert petition because there isn’t a circuit split, I’d cite this language.

The court adds: “To the extent Airbnb views the California decisions as ‘outliers,’ it mischaracterizes the state of the law. Those cases are the only other federal court decisions resolving CDA challenges to similar local ordinances. But see Airbnb, Inc. v. City of New York, Nos. 18 Civ. 7712 & 7742, 2019 WL 91990, at *23-24 (S.D.N.Y. Jan. 3, 2019) (enjoining a local datasharing requirement in a case not involving a related CDA challenge). All other cases upon which Airbnb relies involve materially distinct circumstances—civil claims explicitly seeking to impose tort liability on an online publisher for harm allegedly arising from postings made by third parties. ”

The court rejects Airbnb’s First Amendment challenge to the penalties provision, citing the Santa Monica ruling.

Airbnb has slightly more success with its Section 230 challenge to the enforcement provision. Boston conceded “that the Enforcement provision’s threat of banishment in the event of a Booking Agent’s failure to agree to monitor and remove listings constitutes, in the City’s view, a threat of liability arising from the publication of third-party content for purposes of the CDA.” I’m not sure how often other cities would make such concessions. While I believe this is the first time a judge has accepted Airbnb’s Section 230 sword against a city’s short-term lodging rules, it’s hard to celebrate this development too much. If a city can’t ban Airbnb for booking illegal transactions, but it can impose a substantial financial penalty for that conduct, what’s the difference? In other words, if Airbnb doesn’t win all facets of its legal challenge to the city ordinances, it probably doesn’t really obtain the results it wanted.

The court also partially grants an injunction on the data provision, enjoining the demands for any non-published data (a unit’s usage data, including the number of nights it was occupied in a given time period) but not enjoining the demands for published data (the location description the vendor provided in the listing, and whether the listed accommodation is a room or an entire unit).

While I appreciate Airbnb’s efforts to blaze new trails using Section 230 as a sword, I wonder if the campaign has been a net success for Airbnb or the Internet community generally. The Ninth Circuit’s Santa Monica ruling has cemented an anti-Airbnb/anti-Section 230 result as Ninth Circuit law (unless that result can be changed in further proceedings, which I think is unlikely). At this point, any future litigation success for Airbnb will likely require a bold judge willing to sidestep significant adverse precedent. Odds are better that other judges will conform to the burgeoning adverse precedent.

Case citation: Airbnb, Inc. v. City of Boston, 2019 WL 1981043 (D. Mass. May 3, 2019). The complaint.

Related Blog Posts on Airbnb and HomeAway:

* Ninth Circuit Chunks Another Section 230 Ruling—HomeAway v. Santa Monica (Catch-up Post)
* Fourth Amendment Limits NYC’s Demands for Airbnb Customer Records
* Racial Discrimination Lawsuit Against Airbnb Has the Potential to Change Online Marketplaces–Harrington v. Airbnb
* Challenge to Santa Monica’s “Anti-Airbnb” Law Dismissed–Homeaway v. Santa Monica
* VRBO’s Anti-Fraud Guarantee Doesn’t Support Claim Over Fraudulent Listing–Hiam v. HomeAway
* Airbnb Defeats Race Discrimination Claims–Harrington v. Airbnb
* Section 230 Doesn’t Prevent City Regulation of Short-Term Rental Services (Again)–HomeAway v. Santa Monica
* Airbnb Gets Crucial Section 230 Win Over Unauthorized Subleases–La Park La Brea v. Airbnb
* 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
* Court Upholds Airbnb’s Terms of Service–Selden v. Airbnb