Airbnb, Inc. v. HomeAway.com, Inc., 010319 NYSDC, 18 Civ. 7712 (PAE)

Docket Nº:18 Civ. 7712 (PAE), 18 Civ. 7742 (PAE)
Opinion Judge:PAUL A. ENGELMAYER, UNITED STATES DISTRICT JUDGE
Party Name:AIRBNB, INC., Plaintiff, v. CITY OF NEW YORK, Defendant. HOMEAWAY.COM, INC., Plaintiff, v. CITY OF NEW YORK, Defendant.
Case Date:January 03, 2019
Court:United States District Courts, 2nd Circuit, Southern District of New York
 
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AIRBNB, INC., Plaintiff,

v.

CITY OF NEW YORK, Defendant.

HOMEAWAY.COM, INC., Plaintiff,

v.

CITY OF NEW YORK, Defendant.

Nos. 18 Civ. 7712 (PAE), 18 Civ. 7742 (PAE)

United States District Court, S.D. New York

January 3, 2019

OPINION & ORDER

PAUL A. ENGELMAYER, UNITED STATES DISTRICT JUDGE

This decision resolves motions by two home-sharing platforms, Airbnb, Inc. (“Airbnb”) and HomeAway, Inc. (“HomeAway”) (together, “plaintiffs” or “the platforms”) to preliminarily enjoin a New York City (the “City”) ordinance that would require them on a monthly basis to turn over voluminous data regarding customers who use their platforms to advertise short-term rentals (“hosts”). Absent an injunction, the ordinance, Local Law 2018/146, N.Y.C. Admin. Code § 26-2101-5 (“Local Law 146” or the “Ordinance”), is scheduled to take effect on February 2, 2019.

For the reasons that follow, the Court preliminarily enjoins the Ordinance from taking effect. This matter will now proceed expeditiously to discovery aimed at enabling the Court to rule on the platforms' application for permanent relief.

I. Factual Background1

A. Background on Airbnb and HomeAway

Airbnb and HomeAway are home-sharing services that provide an online marketplace for short- and long-term lodging, in which hosts lease or sublease their living space to guests. See Countryman Decl. ¶ 2; Furlong Decl. ¶¶ 4, 6. Airbnb and HomeAway do not offer their own real estate listings. Rather, they act as brokers and receive commissions for transactions executed over their platforms. Furlong Decl. ¶ 8.2

To use Airbnb, whether as a guest or host, an individual must register as a member. To register, Airbnb members submit identifying information and accept Airbnb's various terms and conditions. These include its Community Commitment, Terms of Service, Payments Terms of Service, Privacy, and Nondiscrimination Policies. Countryman Decl. ¶¶ 4-5.

Relevant here, Airbnb's Terms of Service Policy provides that Airbnb's “collection and use of personal information in connection with your access to and use of the Airbnb Platform is described in our Privacy Policy.” Id. ¶ 6; Id. Ex. A (“Airbnb Terms of Service”) at 3. Airbnb's Privacy Policy, in turn, provides that Airbnb will disclose users' personal information only in response to valid legal requests, including those from government agencies. Countryman Decl. ¶ 7; Id. Ex. B (“Airbnb Privacy Policy”) § 3.5. Acceptance of these terms and conditions is mandatory to use Airbnb's platform. Countryman Decl. ¶¶ 4-5.

To become an Airbnb host, a user must create a listing that includes a description of the property available for rental, images and videos of the property, rental price quotes, and dates of availability. Id. ¶ 11. Listings do not include a host's full name, email address, telephone number, or the rental property's exact address; Airbnb securely stores that information. Id. ¶ 12. Guests and hosts may privately communicate with each other over the platform. If they reach an agreement, Airbnb will disclose the listing address to the guest. Id. Airbnb also acts as a platform through which the guest electronically pays the host. Id.

The process of listing or renting real estate on HomeAway's platform is broadly similar. To list a rental property, a host registers for an account and provides identifying information, including a name, email, address, phone number, and other details. Furlong Decl. ¶¶ 9, 17.

To use HomeAway's platform, users must accept HomeAway's Terms and Conditions and Privacy Policy. HomeAway's Terms and Conditions Policy provides, inter alia, that hosts “are responsible for and agree to abide by all laws, rules, ordinances, or regulations applicable to the listing of their rental property and the conduct of their rental business.” Id. ¶ 13; Id. Ex. A (“HomeAway Terms and Conditions”) at 3. HomeAway's Privacy Policy provides, inter alia, that HomeAway “may disclose [users'] personal data to enforce our policies, or where we are permitted (or believe in good faith that we are required) to do so by applicable law, such as in response to a request by a law enforcement or governmental authority . . . .” Furlong Decl. Ex. B (“HomeAway Privacy Policy”) at 3.

HomeAway hosts provide information about the listings, including a description of the rental property, the length of stay, pricing and availability, and “house rules.” Furlong Decl. ¶ 9. As with Airbnb, HomeAway offers the option of an online payment feature, although such payments are handled by third-party processors. Id. ¶ 11.

HomeAway represents to hosts and guests that it “undertakes significant measures to protect and safeguard this private personal and financial information provided by its customers and users . . ., considers this information to be part of its business records . . . and guards such records from disclosure.” Id. ¶ 12.

B. Local Law 146

This case arises out of the City's efforts to regulate home-sharing platforms and the market for peer-to-peer apartment rentals.

In 2010, the New York State Legislature enacted a law prohibiting the rental of most apartments for a period of fewer than 30 days in “Class A” multiple dwellings-i.e., buildings occupied for permanent residence purposes by three of more families living independently- unless a permanent resident remains on the premises. See N.Y. Multiple Dwelling Law § 4(8). The law's stated purpose is to regulate the adverse effects of short-term rentals in residential buildings. These include “overcrowding of multiple dwelling rooms, inadequate provision for light and air, and insufficient protection against the defective provision for escape from fire, and improper sanitation of multiple dwellings.” Id. § 2. Similarly, City law prohibits the short-term rentals of entire multiple dwelling units and one- and two- family units occupied for permanent residence purposes. See N.Y.C. Admin. Code §§ 28-210.3, 28-118.3.2, 27-2004, 27-265; N.Y.C. Building Code §§ 310.1.2, 310.2. The City views these regulations as necessary on the grounds that short-term rentals (1) pose health and safety risks to permanent residents and guests; (2) reduce the availability of permanent housing; (3) drive up rents; and (4) adversely impact the character of residential neighborhoods. Klossner Decl. ¶¶ 3 n.1, 9, 12, 22, 40-41.

In July 2018, in an effort to crack down on short-term rentals that violate the Multiple Dwelling Laws and related regulations, the City Council's Committee on Housing & Buildings proposed the legislation that would become the Ordinance. The report accompanying the proposed legislation stated that the Ordinance would “further address the adverse effect[s], well-documented by a No. of reports issued and studies conducted by both governmental and nongovernmental organizations, resulting from conversion of permanent housing to rentals under 30 days.” Klossner Decl. Ex. G (“Committee Report”) at 2-3.

On July 18, 2018, the City Council unanimously approved the proposed legislation. On August 6, 2018, the Mayor signed it into law. Klossner Decl. ¶¶ 5, 24. The Ordinance is scheduled to take effect on February 2, 2019. Id. ¶ 5.

Under the Ordinance, “booking services” that, for a fee, provide “one or more online, computer or application-based platforms that individually or collectively can be used to (i) list or advertise offers for short-term rentals, and (ii) either accept such offers, or reserve pay for such rentals, ” will be required to submit, on a monthly basis, a report of transactions for which they receive fees. N.Y.C. Admin. Code §§ 26-2101, 26-2102(a). A “booking service” is defined as a “person who . . . (1) [p]rovides one or more online, computer or application-based platforms that individually or collectively can be used to (i) list or advertise offers for short-term rentals, and (ii) either accept such offers, or reserve or pay for such rentals; and (2) [c]harges, collects or receives a fee for the use of such a platform or for provision of any service in connection with a short-term rental.” Id.; § 26-2101. It is undisputed that Airbnb and HomeAway are “booking services” within the meaning of the Ordinance.

Each booking service's monthly transaction reports must include, for every short-term rental listed on the platform: (1) The physical address of the short-term rental associated with such transaction, including the street name, street number, apartment or unit number, borough or county, and zip code;

(2) The full legal name, physical address, phone No. and email address of the host of such short term rental and the uniform resource locator (URL) and the individualized name and No. of such host on such booking service's platform;

(3) The individualized name and No. and the...

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