Parker Madison Partners v. Airbnb, Inc.
Parker Madison Partners v. Airbnb, Inc.
Opinion of the Court
Plaintiff Parker Madison Partners brings this putative class action on behalf of itself and a class of licensed real estate brokers seeking injunctive and declaratory relief preventing Defendant Airbnb from engaging in alleged unfair competition and conduct violating section 349 of the New York General Business Law ("GBL") by virtue of providing real estate brokerage services in New York without the licenses mandated by the New York Real Property Law ("RPL"). (Doc. 18.) Before me is Defendant Airbnb's motion to dismiss the Amended Complaint. (Doc. 23.) Because I find that Plaintiff lacks Article III standing *177to pursue its claims, Defendant's motion to dismiss is GRANTED.
I. Background
Airbnb was founded in 2008 and is a "marketplace for people to list, discover, and book unique accommodations around the world-online or from a mobile phone or tablet." (Am. Compl. ¶ 32.)
Airbnb also processes rental payments and takes a percentage of the payment as a fee and/or commission from the Hosts and Guests. (Id. ¶ 4.) Specifically, Airbnb charges Hosts three percent of the rental payments received, and processes that percentage prior to distributing the balance of the payments to the Hosts. (Id. ¶¶ 35-36.) Airbnb also charges Guests a commission. (Id. ¶ 37.) Airbnb does not disclose the precise percentage of those commissions, but rather states that they fall somewhere between six percent and twelve percent of the rental contract. (Id. ¶ 38.)
Airbnb does not avoid conflicts of interest and does not provide the standard disclosures and waivers provided by real estate brokers. (Id. ¶¶ 8, 42, 46.) Plaintiff claims that as a result, "licensed brokers ... are harmed by a massive-scale market competitor that performs real estate brokerage services without a license and without oversight." (Id. ¶ 9.) Plaintiff states that it and the putative class "have an interest in not being subject to competition in a commercial arena reserved exclusively for licensed brokers, and in maintaining the integrity of the licensed real estate broker profession." (Id. ¶ 10.) Plaintiff further claims that by not following the RPL, "Airbnb takes unfair advantage of the real estate rental market and the consumers who are entitled to the protections afforded by licensed and regulated real estate brokers," and that allowing Airbnb to continue operating in this way "will have severe repercussions for the commercial space reserved for licensed real estate brokers *178and render the protections of [the RPL] meaningless." (Id. ¶¶ 48-49.)
II. Procedural History
On November 17, 2016, Plaintiff filed this action, (Doc. 1), as well as a statement of relatedness, (Doc. 3), and on November 29, 2017, the case was accepted as related to a matter pending before me. (Dkt. Entry Nov. 29, 2017). Soon after the case was assigned to my docket, on December 7, 2016, Plaintiff filed a motion for summary judgment. (Doc. 4.) Defendant filed a letter addressing Plaintiff's motion for summary judgment on December 8, 2016, (Doc. 10), and Plaintiff responded later that same day, (Doc. 11). I directed the parties to appear for a conference, (Doc. 12), which was held on December 20, 2016. During the conference, after Defendant expressed its desire to file a motion to dismiss for lack of subject matter jurisdiction based on a lack of standing, I noted-and Plaintiff's counsel agreed-that if I do not have jurisdiction I would not "reach the summary judgment issue." (Doc. 21 at 4:2-13). Based upon my discussion with counsel at the conference, I stayed briefing on the summary judgment motion, stayed discovery, and set a briefing schedule for Defendant's motion to dismiss. (Id. at 11:8-12:18.)
Plaintiff then filed an amended putative class action complaint on December 26, 2016. (Doc. 18.) Thereafter, in accordance with the briefing schedule set at the December 20 conference, Defendant submitted its motion to dismiss on January 31, 2017, (Doc. 23), along with accompanying papers, (Docs. 24-25), Plaintiff submitted its opposition on March 3, 2017, (Doc. 26), and Defendant submitted a reply on March 17, 2017, (Doc. 27). Plaintiff further filed a letter motion for leave to file a sur-reply, (Doc. 28), which I denied, (Doc. 30).
III. Legal Standard
A. Rule 12(b)(1)
A claim may be "properly dismissed for lack of subject matter jurisdiction under Rule 12(b)(1) when the district court lacks the statutory or constitutional power to adjudicate it." Makarova v. United States ,
B. Rule 12(b)(6)
To survive a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), "a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.' " Ashcroft v. Iqbal ,
In considering a motion to dismiss brought under Rule 12(b)(6), a court must accept as true all well-pleaded facts alleged in the complaint and must draw all reasonable inferences in the plaintiff's favor. Kassner v. 2nd Ave. Delicatessen Inc. ,
IV. Discussion
Defendant proffers a number of arguments in support of its motion to dismiss, including that Plaintiff lacks Article III standing to proceed with this action. (See Def.'s Mem. 11-15.)
A. Article III Standing
1. Applicable Law
Article III of the Constitution circumscribes a court's authority to hear cases, limiting the jurisdiction of federal courts to "cases" or "controversies." U.S. Const. art. III, § 2. To meet the minimum constitutional threshold, a plaintiff must establish "first, that it has sustained an 'injury in fact' ...; second, that the injury was in some sense caused by the opponent's action or omission; and finally, that a favorable resolution of the case is 'likely' to redress the injury." Cortlandt St. Recovery Corp. v. Hellas Telecomms., S.Á.R.L. ,
Injury-in-fact is the "first and foremost" of the three standing elements.
2. Application
Upon examining the allegations in Plaintiff's Amended Complaint, it is clear that Plaintiff does not allege any actual injury tied to Airbnb's actions. Rather, Plaintiff's allegations consist of conclusory statements and untethered assertions culminating in the claim that Airbnb's continued operation would have "severe repercussions to the commercial space reserved for licensed real estate brokers and render the protections of RPL § 440, et seq. meaningless." (Am. Compl. ¶ 48.)
Specifically, Plaintiff alleges that: (1) "licensed brokers ... are harmed by a massive scale market competitor that performs real estate brokerage services without a license and without oversight," (id. ¶ 9); (2) Plaintiff and the putative class "will continue to suffer harm to their business interests and to the integrity of the licensed real estate broker industry," (id. ¶ 55); and (3) Plaintiff and the putative class have an "interest" both in "protecting their business interests and customer base," (id. ¶ 54), and "in not being subject to competition in a commercial arena reserved exclusively for licensed brokers and in maintaining the integrity of the licensed real estate broker profession," (id. ¶ 10). These conclusory statements are insufficient to establish injury-in-fact. See Robainas v. Metro. Life Ins. Co. , No. 14CV9926 (DLC),
*181Ross v. AXA Equitable Life Ins. Co. ,
The most specific allegation contained in Plaintiff's Amended Complaint related to any purported injury is found in Count II, where Plaintiff claims that: "As a result of Airbnb's conduct, Plaintiff and the putative class have suffered, and will continue to suffer, damage to their business, including but not limited to substantial lost revenues, threats to their industry and the professional standards thereof, and abrogation of the importance of licensing and regulatory compliance." (Am. Compl. ¶ 60.) Plaintiff's general allegations of "damage to their business," "threats to their industry and the professional standards" of that industry, and "substantial lost revenues"-not directly tied to injury suffered by Plaintiff-do not establish any cognizable injury as they do "not include a single example" or give any details whatsoever as to any actual injury to Plaintiff connected to Airbnb's activities. See Treiber v. Aspen Dental Mgmt., Inc. ,
In its opposition, Plaintiff does not respond or address these points, or in any way offer how it has been actually injured by Airbnb's actions. The fact that Plaintiff-despite having the opportunity to do so-fails to point to any specific fact supporting its injury or to connect that purported injury to the members of the putative class it seeks to represent is fatal to Plaintiff's claims. Indeed, Plaintiff's failure to point to any such facts is particularly telling given that Airbnb has been in business since 2008, and one would expect that if, in fact, Plaintiff suffered harm, it would be able to articulate that harm with a modicum of detail.
Ultimately, any alleged "injury" derives solely from Airbnb's purported violation of the RPL by acting as a real estate broker without procuring the proper license. (See, e.g. , Am. Compl. ¶¶ 2-3, 5-10.) In other words, Plaintiff does not point to specific improper acts of Defendant that have caused actual harm to it or its customers other than the alleged violation of the RPL. However, Plaintiff cannot establish a cognizable injury based solely on an alleged statutory violation, particularly a practice that " 'is not inherently [problematic] but becomes problematic only' because it [allegedly] violates a 'provision of New York law.' " Treiber ,
Plaintiff has not established an injury-in-fact that was caused by Airbnb's actions *182sufficient to support Article III standing. Therefore, Defendant's motion to dismiss the Amended Complaint is granted.
B. Failure to State a Claim
Because I find that Plaintiff lacks standing to pursue its claims, I do not reach Defendant's arguments under Rule 12(b)(6), nor do I reach its "statutory standing" arguments. See Kelen v. Nordstrom, Inc. ,
V. Conclusion
For the foregoing reasons, Defendant's motion to dismiss the Amended Complaint for lack of Article III standing is GRANTED. The Clerk of Court is directed to terminate the open motion at Document 23 and close this case.
SO ORDERED.
The following facts are taken from the amended complaint and are assumed to be true for purposes of this motion. See Swierkiewicz v. Sorema N.A. ,
"Am. Compl." refers to the Amended Class Action Complaint filed on December 26, 2016 (the "Amended Complaint"). (Doc. 18.)
"Def.'s Mem." refers to the Memorandum of Law in Support of Defendant's Motion to Dismiss. (Doc. 24.)
As the Supreme Court recently clarified, what has been dubbed "statutory standing" and previously "prudential standing" is a misnomer, as the true question is whether there is an "absence of a valid (as opposed to arguable) cause of action [that] does not implicate subject-matter jurisdiction, i.e. , the court's statutory or constitutional power to adjudicate the case." Lexmark Int'l, Inc. v. Static Control Components, Inc. , --- U.S. ----,
Reference
- Full Case Name
- PARKER MADISON PARTNERS, Individually and on behalf of all others similarly situated v. AIRBNB, INC.
- Cited By
- 7 cases
- Status
- Published