Selden v. Airbnb, Inc. ( 2016 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
GREGORY SELDEN, et al.,
Plaintiffs,
Case No. 16-cv-00933 (CRC)
v.
AIRBNB, INC.,
Defendant.
MEMORANDUM OPINION
All of us who have signed up for an online service recently will recall the experience.
After entering the service provider’s website, we were presented with a “sign up” or “create
account” button prominently displayed on the screen. Next to the button—less prominent, no
doubt—was the ubiquitous advisory that, by signing up, we would be accepting the provider’s
“terms of service.” Perhaps there was a separate check-box prompting us to indicate our
agreement to those terms. Regardless, eager to begin using the service and realizing that the
provider’s contractual terms are non-negotiable, most of us signed up without bothering to click
the accompanying link to reveal the contractual terms. Those who did undoubtedly found
numerous pages of legalese. The intrepid few who actually read all the terms almost certainly
learned that one of them requires users to relinquish their right to have a jury resolve any dispute
with the provider. And that another bars class actions. This experience, shared by countless
people each day, gives rise to the dispute presently before the Court.
Plaintiff Gregory Selden, who is African American, signed up with the popular
residential rental service Airbnb in advance of a weekend getaway to Philadelphia. He created
the required user profile, including his photograph, and contacted an Airbnb “host” about a
promising listing. The host allegedly responded that the residence was not available. Smelling a
rat, Selden created a second account under a pseudonym, with a photograph of a white person in
the user profile, and contacted the same host about the same accommodation. This time, Selden
claims, the host was only too happy to rent the residence.
Selden filed suit against Airbnb for race discrimination on behalf of himself and fellow
African-American travelers who have reported similar treatment on Airbnb. See, e.g., Elaine
Glusac, As Airbnb Grows, So Do Claims of Discrimination, N.Y. Times (June 26, 2016),
http://www.nytimes.com/2016/06/26/travel/airbnb-discrimination-lawsuit.html. Likening
Airbnb to a hotel and its hosts to rental agents or hotel employees, Selden seeks to hold the
company responsible under federal civil rights laws for the discriminatory conduct of those who
offer accommodations on its website. Airbnb contests liability, although that issue is not before
the Court because the company’s standard Terms of Service—which it claims Selden accepted
by signing up to use the site—contain a clause requiring all disputes to be resolved by an
arbitrator. Civil lawsuits with a potential jury trial are prohibited. As are class actions.
Invoking this clause, Airbnb moves to compel arbitration of Selden’s claims. Selden
responds that no contract exists—and therefore the arbitration clause does not apply—because
the sign-up process did not place him on adequate notice that he was agreeing to Airbnb’s
Terms of Service, including mandatory arbitration. He further argues that, even if a contract was
formed, the arbitration provision does not apply to discrimination suits and is unconscionable in
any event.
The Court must grant Airbnb’s motion. No matter one’s opinion of the widespread and
controversial practice of requiring consumers to relinquish their fundamental right to a jury
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trial—and to forego class actions—as a condition of simply participating in today’s digital
economy, the applicable law is clear: Mutual arbitration provisions in electronic contracts—so
long as their existence is made reasonably known to consumers—are enforceable, in commercial
disputes and discrimination cases alike. And Airbnb’s sign-up procedures were sufficiently clear
to place Mr. Selden on notice that he was agreeing to the company’s Terms of Service when he
created an account. While that result might seem inequitable to some, this Court is not the
proper forum for policy objections to mandatory arbitration clauses in online adhesion contracts.
Such objections should be taken up with the appropriate regulators or with Congress.
I. Background & Procedural Posture
A. Selden’s Use of Airbnb
Gregory Selden and a friend planned a trip to Philadelphia in March 2015. Second
Amend. Compl. ¶¶ 28–35. To book their accommodations, Selden turned to Airbnb, which
describes itself as “a trusted community marketplace for people to list, discover, and book unique
accommodations all around the world.” About Us, Airbnb, http://www.airbnb.com/about/about-
us (last visited Oct. 24, 2016). Airbnb allows property owners or their representatives—“hosts”
in the company’s parlance—to list their accommodations on the platform, where travelers then
attempt to book them. Def.’s Mot. Compel Arbitration (“MCA”), Decl. of Kyle Miller ¶ 2.
While Airbnb facilitates the transactions, the hosts, alone, are responsible for deciding to whom
they will offer their homes for short-term stays. Id.
Selden first created his Airbnb account in March 2015, using an iPhone mobile device.
Pl.’s Opp’n MCA, Decl. of Gregory Selden ¶ 2; Supp. Decl. of Kyle Miller ¶¶ 2, 4. Airbnb’s
mobile sign-up screen, attached as an appendix to this Memorandum Opinion, presented Selden
with three options in descending order: “Sign up with Facebook,” “Sign up with Google,” and
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“Sign up with Email.” See Appendix. Below the “Sign up with Email” button was text that
read: “By signing up, I agree to Airbnb’s Terms of Service, Privacy Policy, Guest Refund Policy,
and Host Guarantee Terms.” Id. The text contained hyperlinks to these various agreements. Id.
Airbnb’s Terms of Service include, among other provisions, a mandatory arbitration clause.
Def.’s MCA, Ex. B, 16–18. Selden clicked “Sign up with Facebook” at the top of the page, and
proceeded to create his Airbnb profile in order to use the service. Decl. of Gregory Selden ¶ 6.
Selden’s profile included a photograph of his face, along with other details like his name,
age, and education. Shortly after creating his account, he inquired with a host about the
availability of a listing that met his needs. Id. at ¶¶ 6–7. According to Selden, the host informed
him that the accommodation was not available. Id. at ¶ 7. While browsing Airbnb later that day,
however, Selden noticed that the listing was still posted. Id. at ¶ 8. Suspecting that he was
denied accommodations due to his race, Selden created two fictitious Airbnb accounts with
profile photos depicting white men. Id. He then used those accounts to apply to the same listing,
and, he claims, the host accepted both. Id. Selden later took to social media with his claims of
discrimination, and the hashtag “#airbnbwhileblack” quickly went viral. Second Amend. Compl.
¶ 50.
B. Airbnb’s Terms of Service
Airbnb’s Terms of Service at the time Selden signed up for Airbnb spanned seventeen
single-spaced pages and began with the following statement:
PLEASE READ THESE TERMS OF SERVICE CAREFULLY AS THEY
CONTAIN IMPORTANT INFORMATION REGARDING YOUR
LEGAL RIGHTS, REMEDIES AND OBLIGATIONS. THESE INCLUDE
VARIOUS LIMITATIONS AND EXCLUSIONS, A CLAUSE THAT
GOVERNS THE JURISDICTION AND VENUE OF DISPUTES, AND
OBLIGATIONS TO COMPLY WITH APPLICABLE LAWS AND
REGULATIONS.
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Pl.’s MCA, Ex. B, 2. The “Dispute Resolution” clause, by which Airbnb seeks to compel
arbitration, appeared on page fifteen of the document:
You and Airbnb agree that any dispute, claim or controversy arising out of or
relating to these Terms or the breach, termination, enforcement, interpretation or
validity thereof, or to the use of the Services or use of the Site or Application
(collectively, “Disputes”) will be settled by binding arbitration, except that each
party retains the right to seek injunctive or other equitable relief in a court of
competent jurisdiction to prevent the actual or threatened infringement,
misappropriation or violation of a party’s copyrights, trademarks, trade secrets,
patents, or other intellectual property rights. You acknowledge and agree that you
and Airbnb 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. If this
specific paragraph is held unenforceable, then the entirety of this “Dispute
Resolution” section will be deemed void. Except as provided in the preceding
sentence, this “Dispute Resolution” section will survive any termination of these
Terms.
Def.’s MCA, Ex. B, 16 (emphasis added). The section continued that any arbitration
proceedings shall be administered by the American Arbitration Association and offered general
details about the arbitration process. Id. at 16–18.
C. Procedural History
Selden filed a putative class action suit against Airbnb in this Court on May 17, 2016, and
has since twice amended his Complaint. He is the sole named Plaintiff. See Second Amend.
Compl. Selden alleges that Airbnb violated Title II of the Civil Rights Act of 1964, 42 U.S.C.
§ 2000a, which prohibits race discrimination in public accommodations; the Civil Rights Act of
1866, 42 U.S.C. § 1981, which prohibits race discrimination in the formation of contracts; and
the Fair Housing Act, 42 U.S.C. § 3604, which prohibits race discrimination in the sale or rental
of housing. Id. at ¶¶ 53–72. Airbnb moved to compel arbitration on July 13, 2016. See Def.’s
MCA. The Court heard oral argument on the motion on October 12, 2016.
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II. Legal Standards
The Federal Arbitration Act (“FAA”) provides that a provision in a contract requiring the
arbitration of disputes related to the contract “shall be valid.” 9 U.S.C. § 2. The D.C. Circuit has
held that “any doubts concerning the scope of arbitrable issues should be resolved in favor of
arbitration.” Wolff v. Westwood Mgmt., LLC, 558 F.3d 517, 520 (D.C. Cir. 2009).
Notwithstanding a prior agreement to arbitrate, plaintiffs often attempt to resolve disputes in
federal court. Section 4 of the FAA provides a remedy for the defendant: “A party aggrieved by
the alleged failure, neglect, or refusal of another to arbitrate under a written agreement for
arbitration may petition any United States district court . . . for an order directing that such
arbitration proceed in the manner provided for in such agreement.” 9 U.S.C. § 4.
Such a petition is often called a motion to compel arbitration, and is properly resolved
under the summary judgment standard. Aliron Intern., Inc. v. Cherokee Nation Indus., Inc., 531
F.3d 863, 865 (D.C. Cir. 2008). The Court may consider evidence outside of the Complaint and
shall grant the motion if “there is no genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). And in making this
determination, the Court shall view the facts “in the light most favorable to the nonmoving
party.” Chambers v. U.S. Dept. of Interior, 568 F.3d 998, 1000 (D.C. Cir. 2009).
III. Analysis
Airbnb’s Motion to Compel Arbitration presents three questions: (1) did Selden agree to
Airbnb’s Terms of Service; (2) if so, does the mandatory arbitration clause apply to his claims of
race discrimination; and (3) if the clause applies to his claims, is it enforceable? For the reasons
explained below, the Court finds that Selden agreed to the Terms of Service, that those terms
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require the arbitration of unlawful race discrimination claims, and that the agreement is
enforceable.
A. Whether Selden Agreed to Airbnb’s Terms of Service
1. Online Adhesion Contracting
Arbitration is a matter of contract law. Thus, whether Selden agreed to arbitrate depends
on whether a valid contract was formed.1 Airbnb’s Terms of Service agreement can be described
as an online adhesion contract. Courts and commentators have identified a number of variations
of these electronic agreements, including “browsewraps,” “clickwraps,” “scrollwraps,” and
“sign-in-wraps.” See, e.g., Nguyen v. Barnes & Noble, Inc., 763 F.3d 1171, 1175–77 (9th Cir.
2014); Berkson v. Gogo LLC, 97 F. Supp. 3d 359, 366–67 (E.D.N.Y 2015). A “browsewrap”
agreement is one in which an internet user accepts a website’s terms of use merely by browsing
the site. A “clickwrap” agreement is one in which an internet user accepts a website’s terms of
use by clicking an “I agree” or “I accept” button, with a link to the agreement readily available.
A “scrollwrap” agreement is like a “clickwrap,” but the user is presented with the entire
agreement and must physically scroll to the bottom of it to find the “I agree” or “I accept”
button. Finally, many internet websites—including Airbnb during the relevant time period—
now use “sign-in-wraps” (although “sign-up-wrap” is a more appropriate name). “Sign-in-wrap”
agreements are those in which a user signs up to use an internet product or service, and the sign-
1
The Court will apply California law in deciding the issue of contract formation. Contrary
to Airbnb’s argument, Def.’s MCA 7, the California choice-of-law clause in Airbnb’s Terms of
Service does not govern this question, as the Court must assess whether Selden agreed to the
Terms of Service in the first place. See, e.g., McMullen v. Synchrony Bank, 164 F. Supp. 3d 77
(D.D.C. 2016) (“Applying the choice-of-law clause to resolve the contract formation issue would
presume the applicability of a provision before its adoption by the parties has been established.”)
(internal quotations omitted). After considering the relevant choice-of-law rules, however, the
Court is satisfied—and the parties agree—that California law applies to this threshold dispute.
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up screen states that acceptance of a separate agreement is required before the user can access the
service. While a link to the separate agreement is provided, users are not required to indicate
that they have read the agreement’s terms before signing up. See Barnes & Noble, 763 F.3d at
1177–79; Cullinane v. Uber Technologies, 2016 WL 3751652 at *5–7 (D. Mass. July 11, 2016).
While the relevant terminology continues to evolve, the Court’s inquiry into contract
formation does not. See Register.com, Inc. v. Verio, Inc., 356 F.3d 393, 403 (2d Cir. 2004)
(“While new commerce on the Internet has exposed courts to many new situations, it has not
fundamentally changed the principles of contract.”). “Mutual manifestation of assent”—the
“touchstone of contract”—must still be present. Barnes & Noble, 763 F.3d at 1175 (quoting
Specht v. Netscape Commc’ns Corp., 306 F.3d 17, 29 (2d Cir. 2002) (applying California law)).
But because this case concerns a type of “sign-in-wrap” agreement, the consumer’s assent is
“largely passive.” Berkson, 97 F. Supp. 3d at 393 (applying California law). As a result, “the
contract-formation question will often turn on whether a reasonably prudent offeree would be on
inquiry notice of the terms at issue.” Schnabel v. Trilegiant Corp., 697 F.3d 110, 126–27 (2d
Cir. 2012) (holding that under California law, consumers were not on inquiry notice of an
arbitration provision when the relevant terms were sent to them by e-mail following enrollment
in an online service). As then-Judge Sotomayor explained in assessing online adhesion contracts
generally, “[c]larity and conspicuousness of [the] terms are important” in making this
determination. Specht, 306 F.3d at 30 (applying California law).
Applying these principles to sign-in-wrap agreements specifically, Judge Weinstein noted
in an extensive discussion on the issue that district courts tend to uphold the agreements under
three circumstances. Berkson, 97 F. Supp. 3d at 400–01. First, the agreements tend to be
enforced if “the hyperlinked ‘terms and conditions’ is next to the only button that will allow the
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user to continue use of the website.” Id. (citing Crawford v. Beachbody, LLC, 2014 WL
6606563, at *3 (S.D. Cal. Nov. 5, 2014) (finding a forum selection clause binding when the
“terms and conditions” statement was directly above the “Place Order” button)); Starke v. Gilt,
2014 WL 1652225, at *2–3 (S.D.N.Y. Apr. 24, 2014) (finding an arbitration clause binding
when the “terms of use” statement was right next to the “Shop Now” button); Swift v. Zynga
Game Network, Inc., 805 F. Supp. 2d 904, 908, 912 (N.D. Cal 2011) (finding an arbitration
clause binding where the “terms of service” statement was directly below the “Accept” button).
Second, courts tend to uphold sign-in-wrap agreements if “the user ‘signed up’ to the website and
was presented with hyperlinks to the terms of use on subsequent visits.” Berkson, 97 F. Supp. 3d
at 401 (citing Nicosia v. Amazon.com, Inc., 84 F. Supp. 3d 142, 151–53 (E.D.N.Y. Feb. 4, 2015)
(finding an arbitration clause binding when the user clicked a box acknowledging the terms at
the initial signup to the website and was presented with a hyperlink at the top of the webpage to
terms of use multiple times after making purchases)). And third, sign-in-wrap agreements are
usually upheld if “notice of the hyperlinked terms and conditions is present on multiple
successive webpages of the site.” Berkson, 97 F. Supp. 3d at 401 (citing Major v. McCallister,
302 S.W.3d 227, 230–31 (Mo. Ct. App. 2009) (finding a forum selection clause binding when
the hyperlink to the terms and conditions was presented on multiple successive webpages and on
the final page of the website’s sign-up process)).
Finally, courts that have assessed the validity of sign-in-wrap agreements since Berkson
have cited factors such as the size of the font, the possibility that other visual elements on the
screen might obscure the “terms and conditions” statement, and whether the user signed up for
the agreement using a mobile device. Compare Meyer v. Kalanick, 2016 WL 4073012 at *4, *6
(S.D.N.Y. July 29, 2016) (Rakoff, J.) (finding Uber’s terms-of-service agreement not binding
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when the terms-of-service statement “was in a font that was barely legible on [a] smartphone
device . . . [and] beneath two additional buttons”) with Cullinane, 2016 WL 3751652 at *7
(finding Uber’s terms-of-service agreement binding because of the “prominent” placement of the
terms-of-service statement).
2. Application of the Law to Airbnb’s Terms of Service Agreement
The Court finds that Airbnb’s mobile sign-up screen adequately placed Selden on notice
of Airbnb’s Terms of Service, and that he assented to those terms by clicking the sign-up box
and using the service. The text “By signing up, I agree to Airbnb’s Terms of Service” is
conspicuous. See Appendix. It is placed in roughly the middle of the page, in close proximity to
all three sign-up buttons. The text also appears in dark font, in sharp contrast to the white
background. It is, moreover, clearly legible, appropriately sized, and unobscured by other visual
elements. Although the text is not directly under the first or second alternative sign-up buttons,
any reasonably-observant user would notice the text and accompanying hyperlinks. So even if
Selden only clicked “Sign up with Facebook” at the top of the page, he would have seen the
relevant text from a quick glance down the rest of the page. Thus, by choosing to sign up for
Airbnb, Selden manifested his assent to the Terms of Service.2
There is also a wider point to be made, as illustrated at the outset of this opinion. The act
of contracting for consumer services online is now commonplace in the American economy.
Any reasonably–active adult consumer will almost certainly appreciate that by signing up for a
2
Airbnb further asserts that Selden also agreed to the Terms of Service when he created
his two fictitious accounts. Def.’s MCA 9. Selden contends that because he created those
accounts for test purposes only, they did not result in valid agreements. Pl.’s Opp’n MCA 14.
Because the Court finds that Selden agreed to Airbnb’s Terms of Service when he created his
initial account in March 2015, the Court need not reach these arguments.
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particular service, he or she is accepting the terms and conditions of the provider. Notifications
to that effect—be they check boxes or hyperlinks—abound. To be sure, few people may take
time to actually read the user agreements. But ignorance of the precise terms does not mean that
consumers are unaware they are entering contracts by signing up for internet-based services. So,
while the record is silent as to Mr. Selden’s particular history with e-commerce, the prevalence
of online contracting in contemporary society lends general support to the Court’s conclusion
that Selden was on notice that he was entering a contract with Airbnb in this case.
B. Whether Airbnb’s Arbitration Agreement Encompasses Selden’s Discrimination
Claims
Having found that Selden agreed to Airbnb’s Terms of Service, including the mandatory
arbitration clause, the Court next turns to whether the arbitration provision encompasses Selden’s
claims. Again, the provision states that “[the user] and Airbnb agree that any dispute, claim or
controversy arising out of or relating to these Terms or the breach, termination, enforcement,
interpretation or validity thereof, or to the use of the Services or use of the Site or Application
(collectively, ‘Disputes’) will be settled by binding arbitration.” Def.’s MCA, Ex. B, 17
(emphasis added).
Courts applying California law interpret the language “arising out of or relating to” very
broadly.3 California, like most jurisdictions, “embrace[s] a judicial policy strongly in favor of
enforcing arbitration contracts.” Bos Material Handling, Inc. v. Crown Controls Corp., 137 Cal.
App. 3d 99, 105 (Cal. Ct. App. 1982). Courts applying California law “have held such
3
Since the Court finds that a valid agreement exists between Selden and Airbnb, the
choice-of-law clause in Airbnb’s Terms of Service becomes effective and governs the Court’s
interpretation of the agreement’s terms. See Def.’s MCA, Ex. B, 16 (“These Terms will be
interpreted in accordance with the laws of the State of California.”).
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arbitration agreements sufficiently broad” to include claims that “have their roots in the
relationship between the parties which was created by the contract.” Id. at 105–06 (internal
quotations omitted). This language “reaches every dispute between the parties having a
significant relationship to the contract and all disputes having their origin or genesis in the
contract.” Rice v. Downs, 247 Cal. App. 4th 1213, 1224 (Cal. Ct. App. 2016). “To require
arbitration, the factual matters need only touch matters covered by the contract containing the
arbitration clause and all doubts are to be resolved in favor of arbitrability.” Id. (emphasis
added).
Supreme Court precedent instructs federal courts to take the same approach. See Dowley
v. Dewey Ballantine, LLP, 2006 WL 1102768 at *8 (D.D.C. Apr. 26, 2006) (noting that “when
an arbitration agreement contains the dual phrases ‘arising out of or relating to,’ it is proper to
interpret the agreement broadly to cover matters that touch upon the contract to be arbitrable”)
(citing Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 624 (1985)); see
also Prima Paint Corp. v. Flood & Conklin Mgf. Co., 388 U.S. 395, 406 (1967) (noting that the
words “arising out of or relating to” in an arbitration clause are “easily broad enough to
encompass” the asserted claims).
Applying this broad interpretation, it is clear that Selden’s claims of unlawful race
discrimination “arise out of or relate to” his use of the Airbnb service. They therefore fall within
the scope of the mandatory arbitration clause.
C. Whether Airbnb’s Arbitration Agreement is Enforceable
Having concluded that Selden agreed to the mandatory arbitration clause and that the
clause encompasses his claims of unlawful discrimination, the Court must next determine if the
clause is enforceable in this suit. Selden’s numerous objections to enforcing the arbitration
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clause can be boiled down to two main arguments: first, that federal civil rights claims are not
subject to arbitration; and second, that the arbitration clause is unconscionable. Pl.’s Opp’n
MCA 14–28. The Court rejects both arguments.
1. Federal Civil Rights Laws and Arbitration
Federal policy dictates that doubts about the applicability of an arbitration agreement
should be resolved in favor of arbitration. Congress enacted the FAA in 1925 “to reverse the
longstanding judicial hostility to arbitration agreements that had existed at English common law
and had been adopted by American courts, and to place arbitration agreements upon the same
footing as other contracts.” Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 24 (1991).
There is no exception for statutory claims. The Supreme Court “has been quite specific in
holding that arbitration agreements can be enforced under the FAA without contravening the
policies of congressional enactments giving [individuals] specific protection against
discrimination prohibited by federal law.” Circuit City Stores, Inc. v. Adams, 532 U.S. 105, 123
(2001). As then-Judge Roberts noted, courts will enforce an agreement to arbitrate a statutory
claim “so long as the agreement does not require the claimant to forgo substantive rights
afforded under the statute.” Booker v. Robert Half Intern., Inc., 413 F.3d 77, 79 (D.C. Cir.
2005).
“If Congress did intend to limit or prohibit waiver of a judicial forum for a particular
claim, such an intent will be deducible from the statute’s text or legislative history, or from an
inherent conflict between arbitration and the statute’s underlying purposes.” Shearson/American
Exp., Inc. v. McMahon, 482 U.S. 220, 227 (1987) (internal quotations omitted). Selden makes a
specific argument that arbitration is inconsistent with the text of Title II, as well as a broader
argument that none of his statutory civil rights claims can be arbitrated. Pl.’s Opp’n MCA 21–
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26. With respect to Title II, Selden emphasizes the following provisions of the statute
concerning jurisdiction and remedies:
(a) The district courts of the United States shall have jurisdiction of proceedings
instituted pursuant to this subchapter and shall exercise the same without regard to
whether the aggrieved party shall have exhausted any administrative or other
remedies that may be provided by law.
(b) The remedies provided in this subchapter shall be the exclusive means of
enforcing the rights based on this subchapter, but nothing in this subchapter shall
preclude any individual or any State or local agency from asserting any right
based on any other Federal or State law not inconsistent with this subchapter,
including any statute or ordinance requiring nondiscrimination in public
establishments or accommodations, or from pursuing any remedy, civil or
criminal, which may be available for the vindication or enforcement of such right.
42 U.S.C. §2000a–6 (emphasis added). Selden argues that “the Congressional intent for ‘where
and how’ [he] can bring his Title II suit is clearly codified” in this portion of the statute. Pl.’s
Opp’n MCA 25. Not so.
The phrase “the district courts of the United States shall have jurisdiction” in the statute
“neither guarantees a right to a federal court trial nor forbids arbitration as an alternate forum.”
Garrett v. Circuit City Stores, Inc., 449 F.3d 672, 678 (5th Cir. 2006); see also Gilmer, 500 U.S.
at 29 (rejecting the argument that “compulsory arbitration is improper because it deprives
claimants of the judicial forum provided by the [statute]”). Nor is arbitration precluded by the
phrase “the remedies provided . . . shall be the exclusive means of enforcing the rights [of Title
II].” Plaintiffs may still vindicate their statutory rights in arbitration. Any arbitration agreement
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that prevents them from doing so is invalid. Booker, 413 F.3d at 79. The cited text therefore
does not support Selden’s argument that Title II claims are not subject to arbitration.4
Selden’s broader argument is that there is an inherent conflict between arbitration and the
anti-discrimination objectives of the civil rights statutes under which he brings his claims. He
argues that arbitration is not a neutral proceeding, because businesses are “repeat-player[s]” who
are familiar with arbitration. Pl.’s Opp’n MCA 26. The imbalance of knowledge and experience
favors businesses in the selection of arbitrators, Selden claims, because employees and
consumers “lack financial resources to research arbitrator[s’] past decisions.” Id. (citing Lewis
Maltby, Paradise Lost—How the Gilmer Court Lost the Opportunity for Alternative Dispute
Resolution to Improve Civil Rights, 12 N.Y. L. Sch. J. Hum. Rts. 1 (1994)). The Supreme
Court, however, has repeatedly rebuffed these arguments as insufficient to preclude arbitration.
Mitsubishi, 473 U.S. at 634 (“We decline to indulge the presumption that the parties and arbitral
body conducting a proceeding will be unable or unwilling to retain competent, conscientious,
and impartial arbitrators.”); Gilmer, 500 U.S. at 30 (same).
Moreover, while “judicial review of arbitral awards is extremely limited,” Teamsters
Local Union No.61 v. United Parcel Serv., Inc., 272 F.3d 600, 604 (D.C. Cir. 2001) (internal
citation omitted), safeguards still exist. There are five grounds on which a federal court can
vacate an arbitration award. The FAA itself provides the first four:
4
As for Selden’s remaining statutory claims, he does not identify—and the Court is not
aware of—any case in which a court has found that Fair Housing Act or Section 1981 claims are
not subject to arbitration. The sparse amount of case law on the matter actually holds otherwise.
See Davis v. Fenton, 26 F. Supp. 3d 727, 742 (N.D. Ill. 2014) (ordering arbitration and noting
that “even if the Court had doubts as to whether the arbitration clause includes Plaintiff’s FHA
claim, the Court would be required to resolve those doubts in favor of arbitration”) (citing Moses
H. Cone, 460 U.S. at 24-25); Fordjour v. Washington Mut. Bank, 2008 WL 295092 (ordering
arbitration of plaintiff’s FHA and § 1981 claim) (N.D. Cal. Feb. 1, 2008).
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(1) [W]here the award was procured by corruption, fraud, or undue means; (2)
where there was evident partiality or corruption in the arbitrators, or either of them;
(3) where the arbitrators were guilty of misconduct in refusing to postpone the
hearing, upon sufficient cause shown, or in refusing to hear evidence pertinent and
material to the controversy; or of any other misbehavior by which the rights of any
party have been prejudiced; or (4) where the arbitrators exceeded their powers, or
so imperfectly executed them that a mutual, final, and definite award upon the
subject matter submitted was not made.
9 U.S.C.A. § 10(a). Courts have supplied the fifth: “In addition to the statutory grounds,
arbitration awards can be vacated . . . if they are in manifest disregard of the law.” Kurke v.
Oscar Gruss and Son, Inc., 454 F.3d 350, 354 (D.C. Cir. 2006) (internal citations omitted). The
lack of judicial support for Selden’s argument that arbitration inherently undermines the purpose
of Title II, along with the existence of these safeguards, require the Court to enforce Airbnb’s
mandatory arbitration clause.
2. Unconscionability
Selden’s argument of last resort is that the arbitration agreement is unconscionable.
“Whether an arbitration agreement is unconscionable is primarily a question of state contract
law.” Ruiz v. Millennium Residential Association, 156 F. Supp. 3d 176, 180 (D.D.C. 2016)
(citing Perry v. Thomas, 482 U.S. 483, 492 n.9 (1987)). Under California contract law, a court
must find that a contract is both procedurally and substantively unconscionable in order to
invalidate it. Armendariz v. Foundation Health Psychcare Services, Inc., 6 P.3d 669, 690 (Cal.
2000). A contract is procedurally unconscionable if “an inequality of bargaining power”
precludes the chance for “real negotiation or a meaningful choice on the part of the weaker
party.” Kinney v. United HealthCare Services, Inc., 70 Cal. App. 4th 1322, 1329 (Cal. Dist. Ct.
App. 1999). A contract is substantively unconscionable if its terms “are so one-sided as to shock
the conscience.” Soltani v. Western & Southern Life Ins. Co., 258 F.3d 1038, 1043 (9th Cir.
16
2001) (applying California law) (emphasis in original) (quoting Kinney, 70 Cal. App. 4th at
1330).
Selden argues that the Airbnb agreement is procedurally unconscionable simply because
it is an adhesion contract. But adhesion contracts are not per se unconscionable under California
law. E.g., Serafin v. Balco Properties Ltd., 235 Cal. App. 4th 165, 179 (Cal. Dist. Ct. App. 2015)
(“[T]he fact that the arbitration agreement is an adhesion contract does not render it
automatically unenforceable as unconscionable.”). Selden claims that the arbitration clause is
substantively unconscionable because it “lack[s] mutuality.” Pl.’s Opp’n MCA 17. Indeed, the
California Supreme Court, and other courts applying California law, have held that mandatory
arbitration clauses in adhesion contracts are unconscionable when only one party is required to
arbitrate. See Armendariz, 6 P.3d at 769-70; Nyulassy v. Lockheed Martin Corp., 120 Cal. App.
4th 1267, 1282 (Cal. Dist. Ct. App. 2004) (“The employment agreement requires plaintiff only to
arbitrate any and all of his employment claims.); Kinney, 70 Cal. App. 4th at 1332 (“Faced with
the issue of whether a unilateral obligation to arbitrate is unconscionable, we conclude that it
is.”). Airbnb’s Terms of Service, however, clearly subject both parties to arbitration. See Def.’s
MCA, Ex. B, 16 (“You acknowledge and agree that you and Airbnb are each waiving the right to
a trial by jury . . . .”). Seldon also argues that the arbitration clause is substantively
unconscionable because the costs of arbitration are too high for the consumer. This argument,
too, is without merit. Plaintiff’s arbitration fees are paid for by Airbnb, unless the arbitrator
“finds that either the substance of [the] claim or the relief sought . . . was frivolous or was
brought for an improper purpose.” Def.’s MCA, Ex. B, 17. In sum, Airbnb’s arbitration clause
does not meet the high bar for unconscionability set by the case law.
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APPENDIX
The screenshot below depicts Airbnb’s sign-up screen as it would appear on an iPhone 5.
Airbnb provided this image in a supplemental affidavit. See Supp. Decl. of Kyle Miller, Ex. 1.
Airbnb’s records indicate—and Selden does not dispute—that he used an Apple device to sign
up for Airbnb. Supp. Decl. of Kyle Miller ¶ 4.
iPhone 5
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