The Racism Lawsuit Against Airbnb May Have Just Hit A Dead End

A binding arbitration clause was used to throw out a civil rights lawsuit against Airbnb.

Nov 02, 2016 at 10:26 AM ET

A black man’s class action lawsuit against Airbnb appears to have hit an unsurmountable snag: the terms of service.

A federal judge ordered on Tuesday that Gregory Selden, who sued the home-sharing network last May, must enter arbitration with Airbnb, as per its user agreement. Selden alleged that when he tried to book rooms using his real identity, he was told it wasn’t available. When he tried again using two fictional white male identities, both were able to book the room during those “unavailable” dates. Attempts to contact the host and then Airbnb to complain about this, he said, were met with hostility and indifference, respectively. He took the matter public, and many more black people chimed in with their own, similar stories about what it was like to use Airbnb’s platform for them. Selden then filed a lawsuit, accusing Airbnb of civil rights violations.

Airbnb responded by announcing changes that it hoped would prevent discrimination by its users, including a new “community commitment” all users must sign, effective on Tuesday. But users already signed a binding arbitration agreement — it’s mandatory to do so in order to use Airbnb if you live in America — that says they must settle any disputes through arbitration instead of suing the company.

That means customers must argue their cases individually before an independent third party (the arbitrator) behind closed doors instead of before a judge and jury in public. These agreements are pretty typical now and perfectly legal, thanks to a Supreme Court decision allowing them. Many companies, like Airbnb, make them a condition of using their services, as they would much rather enter arbitration than go in front of a jury: it’s cheaper, easier, and prevents class action lawsuits like the one Selden was trying to bring.

“No matter one’s opinion of the widespread and controversial practice of requiring consumers to relinquish their fundamental right to a jury trial — and to forego class actions — as a condition of simply participating in today’s digital economy, the applicable law is clear,” Judge Christopher Cooper wrote in his decision that dismissed Selden’s case. Even a civil rights complaint was not compelling enough to override the arbitration agreement.

Selden’s lawyer told The New York Times he plans to appeal. Part of his argument against Airbnb’s motion to dismiss the case was that Selden didn’t have to check a box saying he read and agreed to the terms of service; there was just some fine print when he signed up saying he agreed to them.

“Airbnb cannot and should not be able to avoid complying with historic public accommodations and housing laws put in place for decades with mere computer software,” Selden’s lawyer told the Consumerist.