Airbnb received some good news in New York today, as the State Supreme Court quashed a subpoena issued by the attorney general there. The decision puts an end to the first part of a legal battle there between the peer-to-peer lodging marketplace and local officials.
Last fall, the NY AG’s office issued a subpoena demanding thousands of records related to hosts in an effort to identify bad actors and illegal activity happening on the platform. That request included a spreadsheet with the name, physical and email address, and other personal information of hosts, as well as a full list of all dates, duration of guest stays, and rates charged by the host, among other things.
Airbnb argued that the request was overly broad and filed a motion seeking to block what it called a “fishing expedition” on the part of the attorney general. It also claimed that the subpoena asked for personal or confidential information about its users.
After several months, State Supreme Court Judge Gerald Connolly ruled in Airbnb’s favor, generally siding with the company’s argument that the subpoena was overly broad. (Full decision embedded below.) Connolly writes:
While petitioner bears the burden of demonstrating that the subpoena is overbroad, as petitioner argues, a plain reading of the subpoena in light of Multiple Dwelling Law §4 and the tax provisions and materials at issue meet such burden. Based upon the foregoing, the subpoena at issue, as drafted, seeks materials that are irrelevant to the inquiry at hand and accordingly, must be quashed.
The decision is a victory in a market in which Airbnb has faced continued regulatory pressure. On the weekend ahead of its initial court date, the attorney general’s office released a list of hosts who had dozens of listings on the service and were clearly not renting their own residences. Airbnb, in response, said that it was shutting down listings of those who appeared in that list of hosts.
The Attorney General’s office pointed out that the judge actually sided with it on most of Airbnb’s arguments, and said it would narrow and reissue the subpoena. It pointed to the following quotes as support for that claim:
1. “[Airbnb's] assertions that a factual predicate has not been established are without merit as there is evidence that a substantial number of Hosts may be in violation of the Multiple Dwelling Law and/or New York State and/or New York City tax provisions…”
2. “[t]he record before the Court indicates that there are Hosts regularly using their apartments to provide lodging to guests who may not be complying with the state and local tax registration and/or collection requirements.”
3. “[Airbnb] has failed to demonstrate that the subpoena is unduly burdensome.”
4. “[Airbnb] has failed to demonstrate that the requested information is confidential…”
5. “All other remaining arguments were denied as “unpersuasive or unnecessary.”
As a result, it’s likely that Airbnb still has a long way to go before convincing regulators and lawmakers to come around in New York. But it’s hoping to.
The company issued the following statement after the decision was announced:
This decision is good news for New Yorkers who simply want to share their home and the city they love. Now, it’s time for us to work together. Airbnb hosts and the Attorney General share a common goal: we all want to make New York a better place to live, work and visit. We look forward to continuing to work with the Attorney General’s Office to make New York stronger for everyone.
Meanwhile Matt Mittenthal, spokesperson for Attorney General Eric Schneiderman, issued the following statement:
The judge’s decision specifically found evidence that a ‘substantial’ number of Airbnb hosts may be violating the tax laws and the law that prohibits illegal hotels. This comes as no surprise, given that Airbnb itself removed some 2,000 New York-based listings from its site. Our office is committed to enforcing a law that provides vital protections for building residents and tourists alike. The judge rejected all of AirBnb’s arguments except for a narrow technical issue, and we will reissue the subpoena to address it.