Another Court Rejects Turo’s Eligibility for Section 230–Turo v. Los Angeles

As I previously blogged:

Turo is a peer-to-peer marketplace for car rentals. “Colloquially put, Turo is the ‘Airbnb’ of private motor vehicles.” Though Turo doesn’t dictate where the buyer and seller exchange the car, Turo facilitates matches at airports, either by the seller leaving the car in the parking garage or doing curbside delivery.

The last time I blogged about Turo, Logan Airport in Boston successfully shut them down despite Turo’s invocation of Section 230 to strike down the airport’s regulations. In the latest ruling, LAX Airport similarly overcomes a Section 230 claim to shut Turo down as well.

This is a pretty easy case after the Ninth Circuit’s HomeAway v. Santa Monica ruling. The court says:

Consistent with the holding in, recent decisions by federal courts across the country have also denied Section 230 immunity to platform services where it was only the platforms’ commercial transaction-facilitating functions that were subject to regulation.

Cites to Airbnb v. Boston, State Farm v. Amazon, Oberdorf v. Amazon.

To get around the adverse HomeAway precedent, Turo argued that regulating peer-to-peer transactions forces Turo to verify its users’ information. This argument is correct, but the HomeAway opinion essentially rejected the same argument regarding Airbnb’s responsibility to verify its landlords’ licenses. The court then says Turo could exclude LAX listings, without further monitoring of user content, through geofencing:

any obligation on Turo to “remove offending content” could also be “satisfied without changes to content posted by the website’s users” by, for example, eliminating an owner’s ability to post a vehicle for rent at an address (or with geographic coordinates) that fall within the LAX excludable area in the first place

Due to the nature of its service, Turo must “know” the geographic location of the cars at issue. As a result, this kind of geofencing is more feasible for Turo than many other Internet services. However, in general, telling Internet services to geofence around problematic local regulations opens up a Pandora’s Box. Most services that lack enough geographic information to do this, and the oppressive cost of navigating the panoply of ever-changing local regulations conflicts with Section 230’s efforts to lower entry barriers and compliance costs.

I keep seeing chatter inside the DC echo chamber (a/k/a “Crazytown”) that Section 230 should be amended to reduce its applicability to online marketplaces. Anyone who takes that position publicly demonstrates their clear ignorance of how courts are already interpreting Section 230. The better Q is: do we even value peer-to-peer marketplaces like eBay? Because if we do, the elimination of Section 230 for online marketplaces should be corrected, not celebrated.

Case citation: Turo v. City of Los Angeles, 2020 WL 3422262 (C.D. Cal. June 19, 2020)