The opinion
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF ARKANSAS
FAYETTEVILLE DIVISION
BRITTON ESPOSITO; CHRISTIAN FRESNO;
BENJAMIN KUTYLO; ALLYSON ESPOSITO;
and ALLYSON ESPOSITO, as mother and
next friend of JANIE DOE, a minor PLAINTIFFS
V. CASE NO. 5:20-CV-5204
AIRBNB ACTION, LLC; AIRBNB PAYMENTS,
INC.; AIRBNB, INC.; PUERTO PANAL FARM
CLUB PROPERTY ASSOCIATION AND
ASSOCIATION BOARD; MATIAS JOSE
FERNANDEZ; LINDSAY OLSON; and OTHER
OWNER(S) AND/OR AIRBNB HOSTS OF FARM
HOUSE CHAKRA 82, BUENOS AIRES, ARGENTINA DEFENDANTS
OPINON AND ORDER GRANTING MOTION
TO COMPEL ARBITRATION AS TO AIRBNB
Defendants Airbnb Action, LLC; Airobnb Payments, Inc.; and Airbnb, Inc.
(collectively, “Airbnb”) filed a Motion asking the Court to stay the proceedings and compel
Plaintiffs to arbitrate their claims against Airbnb. See Docs. 60 & 61. The Motion also
seeks dismissal of claims by Plaintiffs Britton Esposito and Christian Fresno. Plaintiffs
have not filed a response. However, Airobnb previously made a similar motion before the
case was transferred to this Court, and that motion was fully briefed. Therefore, the Court
has considered Plaintiffs’ response in opposition to the prior motion (Doc. 38) and
Airbnb’s reply (Doc. 41). For the reasons below, the Court GRANTS IN PART AND
DENIES IN PART Airbnb’s Motion (Doc. 60).
In November 2019, Plaintiff Allyson Esposito used the Airbnb platform to make a
reservation at a property outside of Buenos Aires referred to as the Farm House, located
in the Puerto Panal neighborhood. Allyson and the other Plaintifis—Britton Esposito,
Christian Fresno, Benjamin Kutylo, and Allyson’s minor daughter—were all guests at the
Farm House on the night of November 21, 2019, when four masked, armed men
assaulted and robbed them.
Plaintiffs initially filed suit in the District Court for the Northern District of Illinois.
Airbnb filed a motion seeking various alternative forms of relief—dismissal, stay pending
arbitration, or transfer to this district. The District Court for the Northern District of Illinois
granted the motion to transfer and denied the other relief without prejudice to Airbnb
renewing such a motion before this Court.
Airbnb now renews its motion to stay proceedings and compel arbitration and to
dismiss the claims brought by Britton and Christian. To its Motion, Airbnb attached a copy
of the Airbnb Terms of Service (“TOS”) that Plaintiff Allyson Esposito accepted before
making the reservation at the Farm House. See Doc. 61-2, pp. 2, 27-49. These TOS
contain the following language:
You and Airbnb mutually agree that any dispute, claim or controversy
arising out of or relating to these Terms or the applicability, breach,
termination, validity, enforcement or interpretation thereof, or to the use of
the Airbnb Platform, the Host Services, the Group payment Service, or the
Collective Content (collectively, “Disputes”) will be settled by binding
individual arbitration (the “Arbitration Agreement’).
Id. at p. 46, J 19.4.
The Federal Arbitration Act (“FAA”) permits private parties to agree that disputes
between them will be resolved through arbitration rather than the courts. See 9 U.S.C.
§ 2. Where the parties have made a written agreement to arbitrate, a court's only inquiry
is whether the contract is validly formed. /d. Additionally, parties may contract to delegate
decisions regarding these threshold issues of validity and arbitrability to an arbitrator. See
Rent-A-Center, West, Inc. v. Jackson, 561 U.S. 63, 68-69 (2010). So long as there is
“clear and unmistakable evidence” that the parties intended to arbitrate questions of
arbitrability, a court must leave such determinations to the arbitrator as well. Henry
Schein, Inc. v. Archer and White Sales, Inc., 139 S. Ct. 524, 530 (2019) (internal quotation
marks omitted). Where the arbitration agreement contains a delegation clause, a party
opposing a motion to compel must specifically challenge the validity of the delegation
clause under contract-formation principles. See Rent-A-Center, West, 561 U.S. at 72. It
is not sufficient to challenge the validity of the contract generally. See id.
The language in the TOS quoted above explicitly delegates disputes regarding the
applicability, validity, enforcement, and interpretation of the arbitration agreement to the
arbitrator, so the Court may only consider challenges to the validity of the delegation
clause. Plaintiffs filed no briefing before this Court in response to Airbnb’s renewed
Motion, but their response to Airbnb’s previous motion makes two arguments in
opposition to arbitration. First, Plaintiffs argue that Airbnb’s failure to comply with the
requirements of 15 U.S.C. § 7001, which imposes requirements for the legal effect and
validity of electronic records, makes the contract unenforceable. This argument focuses
not on the TOS, but on Airbnb’s failure to provide a copy of Allyson’s contract with the
owners of the Farm House. Plaintiffs’ second argument is that Airbnb failed to comply
with the TOS by seeking to compel arbitration without having first engaged in informal
dispute resolution directly with the customer as described in paragraph 19.2 of the TOS.
Both of these arguments challenge the applicability and validity of the arbitration
agreement generally, which is delegated to the judgment of the arbitrator. Pursuant to
paragraph 19.4 of the TOS, the arbitrator must be the one to decide whether there is
another contract that governs the relationship between the parties, whether the
requirements for a valid electronic contract are satisfied, and whether preconditions for
arbitration have been met. Since Plaintiffs have not raised any challenges to the
delegation clause specifically, the Court is bound to enforce the agreement and let an
arbitrator decide Plaintiffs’ challenges to the validity and applicability of the arbitration
agreement generally.
For the same reason, the Court will not dismiss Britton and Christian's claims but
will refer all claims against Airbnb to arbitration. There are clearly some threshold issues
that will need to be decided—whether Britton and Christian’s claims are governed by
Allyson’s TOS because she acted as their agent in making the reservation or if they
consented to the TOS in their own right and whether they are subject to different terms
because they are residents of Argentina—but each of these is a question of the
applicability of the TOS that is entrusted to the arbitrator.
In conclusion, Airbnb’s Motion (Doc. 60) is GRANTED IN PART AND DENIED IN
PART. Insofar as the Motion seeks to stay the proceedings and compel arbitration, it is
GRANTED. These proceedings are STAYED pending arbitration as to Counts V, VI, XI,
XIl, XVI, XVI, XX, XXIV, and XXIX—XXXI. Counts XXXII and XXXIll are also STAYED
as to Defendants Airbnb Action, LLC; Airbnb Payments, Inc.; and Airbnb, Inc. These
counts as to these Defendants are COMPELLED to arbitration. Insofar as the Motion
seeks the dismissal of claims brought by Plaintiffs Britton Esposito and Christian Fresno,
itis DENIED. The other claims (Counts I-IV, VII-X, XIII-XVI, XIX—XXII, and XXV—XXVIII)
remain before this Court, as do Counts XXXII and XXXiIll as to the non-Airbnb Defendants
(Puerto Panal Farm Club Property Association and Association Board, Matias Jose
Fernandez, and Lindsay Olson).
IT IS SO ORDERED on this A day of January, 2021.
IC
TIMOTAY L. BROOKS
UNITED STALES DISTRICT JUDGE