Selden v. Airbnb, Inc.

• Citation: 4 F.4th 148
• Decision Date: 13 July 2021
• Docket Number: No. 19-7168,19-7168
• Parties: Gregory SELDEN, Appellant v. AIRBNB, INC., Appellee
• Court: United States Courts of Appeals. United States Court of Appeals (District of Columbia)

4 F.4th 148

Gregory SELDEN, Appellant

v.AIRBNB, INC., Appellee

No. 19-7168

United States Court of Appeals, District of Columbia Circuit.

Argued October 13, 2020

Decided July 13, 2021

Ikechukwu Emejuru argued the cause for appellant. With him on the briefs was Andrew Nyombi.

Sean Marotta argued the cause for appellee. With him on the brief were Michelle A. Kisloff and Matthew J. Higgins.

Before: Katsas and Rao, Circuit Judges, and Edwards, Senior Circuit Judge.

Rao, Circuit Judge

This case involves the arbitrability of discrimination claims brought against Airbnb, an online home rental platform. When Gregory Selden signed up for Airbnb, he was presented with a sign-in wrap—a webpage that informs the user he is agreeing to certain terms by signing up. Airbnb's Terms of Service included a clause requiring that all disputes be resolved by arbitration. The district court held that Selden agreed to those Terms of Service by signing up for Airbnb and so compelled arbitration of his claims. The arbitrator ruled in favor of Airbnb and the district court refused to vacate the arbitration award. On appeal, Selden argues that he did not agree to arbitrate because Airbnb's sign-up screen failed to put him on notice of the arbitration clause in its Terms of Service and regardless, that his discrimination claims were not arbitrable. He also maintains the arbitrator committed misconduct by failing to provide for sufficient discovery and by refusing to consider his expert report.

We affirm. Airbnb's sign-up screen put Selden on reasonable notice that by signing up to use the platform he agreed to Airbnb's Terms of Service; and Selden's discrimination claims were arbitrable. Selden also failed to establish that he was prejudiced by the arbitrator's alleged misconduct.

I.

Airbnb provides an online "community marketplace" for people to list and rent accommodations around the world. A "host" with a property to rent creates a listing on Airbnb's website. A "guest" who wants to rent a property can sign up and use Airbnb's marketplace to communicate directly with a property's host to request a booking. If the host accepts, the host and guest enter an agreement. Airbnb facilitates the marketplace for property rentals and payment for bookings, but is otherwise not involved in the interaction between a host and guest. Airbnb does not operate the accommodations, set the price, or determine availability. Those decisions are made exclusively by a host, who decides whether to rent his property and on what terms.

To use Airbnb, a new user must create an account and profile through Airbnb's website. During the time relevant to this suit, an iPhone user would see this screen when signing up:

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J.A. 231.

The screen presents three options to sign up for Airbnb: using a Facebook account, a Google account, or an email. Directly below these options, the screen states: "By signing up, I agree to Airbnb's Terms of Service, Privacy Policy, Guest Refund Policy, and Host Guarantee Terms." J.A. 231. The terms and policies appear in red and are hyperlinks to the relevant document.

The Terms of Service begin with a warning, in all caps, that they "contain important information regarding [a user's] legal rights, remedies and obligations," including "various limitations and exclusions, a clause that governs the jurisdiction and venue of disputes, and obligations to comply with applicable laws and regulations." J.A. 69 (capitalization altered). The "Dispute Resolution" section includes an arbitration clause in which, as relevant here, a user and Airbnb "agree that any dispute, claim or controversy arising out of or relating to these Terms ... or to the use of the Services or use of the Site ... will be settled by binding arbitration."¹ J.A. 83. This section also includes a class action waiver in which a user and Airbnb "agree that [they] are each waiving the right to a trial by jury or to participate as a plaintiff or class member in any purported class action or representative proceeding." J.A. 83. Any arbitration would be administered by the American Arbitration Association ("AAA") in accordance with its rules. California law governs any disputes.

This case arose when Gregory Selden created an Airbnb account in March 2015. When Selden went to the sign-up page on his iPhone, he chose to sign up with his Facebook account. At the time, Airbnb required a user to provide a profile picture, which hosts could view.² Selden's Facebook profile picture became his Airbnb profile picture.

After Selden signed up for Airbnb, he inquired about a listing in Philadelphia to rent a single room in a property occupied by the owner. The host told Selden the property was not available. Later that day, Selden noticed the property was still listed. Selden, an African American man, suspected the host had denied his request because of his race, which the host could see from Selden's profile picture.

Two days later, Selden created two fake Airbnb accounts with profile pictures of white individuals. Selden then used his fake accounts to request renting the same property for the same dates. According to Selden, the host accepted both requests. Selden posted his claims of discrimination on social media with the hashtag "#airbnbwhileblack," which went viral.

Selden filed a complaint in the District Court for the District of Columbia against Airbnb asserting claims under three statutes. First, he alleged that Airbnb violated Title II of the Civil Rights Act of 1964, Pub. L. No. 88-352, § 201, 78 Stat. 241, 243 (codified at 42 U.S.C. § 2000a ), which prohibits discrimination on the basis of race in public accommodations.³ Second, he alleged that Airbnb violated the Civil Rights Act of 1866, 14 Stat. 27 (codified as amended at 42 U.S.C. § 1981 ), which prohibits discrimination on the basis of race in the formation of contracts. Third, he alleged that Airbnb violated the Fair Housing Act, Pub. L. No. 90-284, § 804, 82 Stat. 73, 81 (1968) (codified as amended at 42 U.S.C. § 3604 ), which prohibits discrimination on the basis of race in the sale or rental of housing. To support these discrimination claims, Selden asserted that two Airbnb policies had a disparate impact on African Americans: its photo policy, requiring a user to provide a profile picture that hosts could view, and its true name policy, requiring a user to use his true name that hosts could see. Selden asserted his discrimination claims individually and on behalf of a class, seeking damages and injunctive relief.

Based on the arbitration clause in the Terms of Service, the district court granted Airbnb's motion to compel arbitration. The district court determined that Airbnb's sign-up screen placed Selden on reasonable notice of the Terms of Service, and therefore he agreed to the Terms when he signed up. Concluding that Selden's discrimination claims were arbitrable, the district court ordered the parties to arbitrate and stayed the case pending the arbitration.

Selden filed an arbitration demand with the AAA. The arbitrator first ordered a voluntary document exchange and explained that he would consider subsequent formal discovery requests. Selden later requested interrogatories and depositions, but the parties instead agreed to try mediation, which failed. A month later, the arbitrator approved of the parties sending document requests but also explained that he was willing to consider renewed requests for additional discovery after completing the document production. Selden's counsel followed up with an email expressly "reserv[ing] the right to seek testimony by way of depositions ... prior to [the] close of discovery," but never requested any interrogatories or depositions prior to the close of discovery.

Airbnb filed a dispositive motion to have Selden's claims dismissed. Selden opposed the motion, in part by submitting an expert report from Dr. Dan Svirsky. In his report, Dr. Svirsky explained a study he coauthored about racial discrimination in the sharing economy and posited that Airbnb's true name policy had a disparate impact on African Americans. During arguments, Selden requested depositions of Airbnb employees before the arbitrator decided the motion. A few days later, the arbitrator granted Airbnb's motion.

Although the arbitrator noted that the allegations against the host were "serious" and "involve[d] totally inappropriate ... conduct," the arbitrator dismissed Selden's claims against Airbnb as a matter of law. J.A. 320. He determined that the host's property—a room in an owner-occupied, single-family residence—was not a public accommodation, so it did not fall under the protection of Title II. He also concluded that Airbnb's online marketplace was not a public accommodation. Relatedly, a single-family residence like the host's property is not a dwelling that qualifies for the Fair Housing Act's protection. See 42 U.S.C. § 3603(b)(1). Because Airbnb was not a party to the contract between Selden and the host, and had no agency relationship with the host, the Civil Rights Act of 1866 did not apply. The arbitrator entered an award in favor of Airbnb.

Selden then filed a motion to vacate the arbitrator's award in the district court, arguing the arbitrator erred by denying his discovery requests for interrogatories and depositions and by ignoring his expert report. According to Selden, these errors amounted to misconduct and a refusal to consider evidence, justifying vacatur of the award.

The district court denied the motion. As to the discovery requests, the court determined the error was Selden's, because he failed to request interrogatories or depositions prior to the close of discovery. With respect to the expert report, the court held that Selden failed to show the arbitrator refused to consider it because the arbitrator permitted Selden to submit the report. In any event, Selden failed to establish that he was prejudiced by the lack of discovery because the arbitrator's decision was based on the legal conclusion that neither...