Airbnb defends arbitration in push to dismiss discrimination suit
The National Law Journal
C. Ryan Barber,
12 October  2016

Lawyers for Airbnb Inc. defended the home-sharing platform’s terms of service Wednesday in Washington federal district court, arguing that a user who brought a discrimination case against the company should be forced into arbitration to resolve the dispute.

Hogan Lovells partner Ellen Kennedy said Airbnb’s sign-up page informs users, when they create an account, consent to the company’s terms of service. Airbnb, which recently outlined plans to combat discrimination and unconscious racial bias on its site, requires users to agree to the terms by checking the sign-up button rather than clicking a separate box.

seeking to force the plaintiff, Gregory Selden, to arbitrate his claims

In July, the company filed court papers seeking to force the plaintiff, Gregory Selden, to arbitrate his claims. Selden, who is African-American, claims he was rejected by an Airbnb host because of his race. He said he was later accepted by the host after creating phony profiles for white men, according to his complaint filed in the U.S. District Court for the District of Columbia.

The litigation over Airbnb’s terms of service comes amid intense regulatory and congressional scrutiny over forced-arbitration clauses. In May, the Consumer Financial Protection Bureau proposed banning forced-arbitration agreements from contracts for financial products and services such as credit cards and bank accounts, calling those clauses “contract gotchas” that block consumers from seeking redress in the courts.

U.S. District Judge Christopher Cooper on Wednesday briefly asked about concerns that arbitration agreements are forcing consumers to give up “important rights, including the fundamental right to a jury trial, simply by signing up for someone’s service without an explicit box to click agreeing to terms and conditions.” And he questioned whether Airbnb should require consumers click a separate box agreeing to the company’s terms of service.

very onerous and significant terms

“Wouldn’t the better practice be to have a more explicit mechanism for assenting to what are very onerous and significant terms?” Cooper asked.

“Your honor, we disagree that they are onerous,” Kennedy responded.

Cooper focused much of his questioning on whether the terms of service were adequately conspicuous on the sign-up page.

In July, U.S. District Judge Jed Rakoff in New York denied a motion to compel arbitration that Uber had filed int an antitrust suit in there. Rakoff ruled that the ride-hailing platform “did not adequately call users’ attention to the existence of terms of service, let alone to the fact that, by registering to use Uber, a user was agreeing to them.”

Kennedy focused on Selden’s multiple accounts to argue he must have seen the hyperlink to Airbnb’s terms of service and knowingly consented to them by signing up with the site, first through Facebook and then through email.

Kennedy earlier had filed court papers showing how the sign-up page would have appeared to Selden in March 2015, when he created the Airbnb accounts. The screenshots show red text above the sign-up button stating that, “By signing up, I agree to Airbnb’s Terms of Service,” along with other company policies.

Asked why Airbnb’s terms of service agreement is not clear enough to be considered valid, Selden’s lawyer, Ikechukwu Emejuru, argued that the options for signing up through Facebook, Google or by email could be misconstrued by Airbnb users.

“If you look at the sign-up mechanism, it’s ‘Sign up with Facebook.’ ‘Sign up with Google.’ ‘Sign up with email.’ There’s nothing there that says, ‘Sign up with Airbnb,’” said Emejuru, of the Maryland-based Emejuru and Nyombi.

Cooper responded skeptically. “But before you get there, I assume you go to the Airbnb site, www.airbnb.com,” the judge said.


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