(With apologies to our Canadian friends, and you know who you are!)
Airbnb is at war with New York officials. Even though ThePopTort lives in New York, we take no official position on the law that the company is challenging in court because it’s not our fight. But we’ll make up for it here.
One of the biggest stories this election season is about “The Millennials.” A key observation about this generation can be summed up as follows: “Millennials seem to have a more refined radar for political BS talk—things that sound cliché and political get tuned out.” Although we’re not exactly Millennials over here, we do have our own BS detector and it works pretty well - especially when it comes to those who interact with the civil justice system. Let’s just say, Airbnb has loudly set if off.
We earlier addressed Airbnb’s hypocritical litigation behavior. Specifically, Airbnb requires its customers to waive their right to sue, or to join in any class-action lawsuit or class-action arbitration. These “forced arbitration” rip off clauses are so anti-consumer that the Consumer Financial Protection Bureau has proposed a rule to prevent companies (like banks and lenders) from imposing “class action bans” on customers. (Since then, the Center for Medicare and Medicaid Services has gone further with a rule to completely ban forced arbitration clauses in nursing home admission forms.) But Airbnb runs straight to court when its own rights need protecting (as they have done in New York.)
OK bad enough. But let’s drill down a little into how Airbnb’s hypocritical behavior is now being used to shut down application and enforcement of this nations’ civil rights laws at the same time the company tries to promote the idea that it cares deeply about civil rights. I don’t think so.
Here’s the problem, as described by The Consumerist:
In March 2015, a man named Gregory Selden was planning a visit to Philadelphia and signed up for Airbnb on his iPhone. He created his account and uploaded a photo of himself to the site. Selden, an African-American, then says he tried to rent a listed home from a host named Paul, only to have Paul give him the bad news that this room was no longer available.
However, Selden says that he soon noticed that this same listing was still posted as available to rent on Airbnb. Curious to find out if he’d been rejected by the host because of the color of his skin, Selden created copycat accounts under the name of “Jessie,” a white male whose profile was otherwise no different from Selden’s, and “Todd,” an older white male. Both accounts tried to reserve the same listing and same time period for which Selden had been rejected, and he says both fictional guests’ requests were accepted by Paul.
Selden claims that he repeatedly tried, with no success, to bring this incident to Airbnb’s attention, and so he ultimately filed a lawsuit [PDF], alleging violations of the Civil Rights Act of 1964 and the Fair Housing Act. He hoped to represent all Airbnb users who may have been similarly wronged.
I don't know if the case has merit but Mr. Selden and the class he represents have a right to be heard. However, in July, Airbnb moved to throw the case out of court based on the fiction that Mr. Selden “agreed to” (i.e., by clicking Airbnb’s non-negotiable terms of service) resolve all disputes in secret arbitration via the kind of clause the CFPB and CMS have found unconscionable. And yesterday, a judge used their argument to throw the case out of court, preventing any class action at all.
To understand how dangerous this development is, consider how critical class action lawsuits have historically been for proper enforcement of our nation’s civil rights laws. For example, read the amicus brief filed by the NAACP Legal Defense & Educational Fund, Inc. in the AT&T Mobility LLC v. Concepcion case or see this fact sheet. Gretchen Carlson knows something about this, too. (See here.) Just like Airbnb, Fox News and Roger Ailes argued for months that her sexual harassment case should be buried in secret arbitration and kept out of court. They eventually settled but Carlson is not keeping quiet about this. In a recent Time Magazine cover story, she said: “[F]orced arbitration … is a huge problem. Because it’s secret. And it plays into why we think that we’ve come so far in society and we probably really haven’t—because we don’t hear about it.”
One might imagine a hip tech company like Airbnb would respect their aggrieved customers’ civil rights enough to hear them out in a court of law (as Congress intended) instead of trying this issue in the media with an orchestrated PR campaign. But disrespect is what Airbnb customers are getting. Few media outlets covered Airbnb’s legal maneuvers to force Mr. Selden’s case into arbitration, but the company made sure that many covered its hiring of high-priced discrimination consultant, former AG Eric Holder (like here). Holder may have a fine reputation in some areas but not when it comes to defending misconduct by corporate clients of his law firm, Covington & Burling. Covington also happens to be one of the principal architects of the “tort reform” movement, limiting the legal rights of everyday people who have been injured, cheated or otherwise wronged. So pardon my cynicism.
What would I like to see? I’d like to see Airbnb get rid of its biased forced arbitration rip off clause. Fat chance. The company just updated its terms of service and the following clause is the first thing you see - in bold:
Terms of Service
IF YOU RESIDE IN THE UNITED STATES, PLEASE NOTE: SECTION 34 OF THESE TERMS OF SERVICE CONTAINS AN ARBITRATION CLAUSE AND CLASS ACTION WAIVER. IT AFFECTS HOW DISPUTES WITH AIRBNB ARE RESOLVED. BY ACCEPTING THESE TERMS OF SERVICE, YOU AGREE TO BE BOUND BY THIS ARBITRATION PROVISION. PLEASE READ IT CAREFULLY.
I’m sure AG Holder and his hip client couldn’t be happier. But all we hear is the deafening sound of our BS detector.