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D.C. Circuit Affirms Online Terms of Service Are Binding

Joel Levine


  • The D.C. Circuit affirmed that an arbitration clause in Airbnb’s online sign-in wrap agreement was binding in the case of Selden v. Airbnb, Inc.
  • Gregory Selden signed up for Airbnb, agreeing to its Terms of Service, which included an arbitration clause. The district court compelled arbitration, and the arbitrator ruled in favor of Airbnb.
  • Selden argued on appeal that he was not adequately notified of the arbitration clause during sign-up.
  • The court reviewed Airbnb’s sign-up process and found that it provided reasonable notice of the Terms of Service, including the arbitration clause.
D.C. Circuit Affirms Online Terms of Service Are Binding
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On July 13, 2021, the D.C. Circuit affirmed a ruling that an arbitration clause in Airbnb’s online sign-in wrap agreement was binding. Selden v. Airbnb, Inc., No. 19-7168 (D.C. Cir. July 13, 2021).

Gregory Selden signed up and “agreed” to the Airbnb’s Terms of Service which included a clause that all disputes be resolved by arbitration. The district court compelled arbitration of Selden’s claims, and the arbitrator ruled in favor of Airbnb. Thereafter, the district court confirmed the award, rejecting Selden’s arguments that it should be vacated.

On appeal, Selden argued that he did not agree to arbitrate because Airbnb’s sign-up screen failed to put him on notice of the arbitration clause in its Terms of Service. The court of appeals explained that Airbnb provides an online “community marketplace” for people to list and rent accommodations around the world. A “host” with a property to rent creates a listing on Airbnb’s website. A “guest” who wants to rent a property can sign up and use Airbnb’s marketplace to communicate directly with a property’s host to request a booking. If the host accepts, the host and guest enter into an agreement. Airbnb facilitates the marketplace for property rentals and payment for bookings but is otherwise not involved in the interaction between a host and guest. Airbnb does not operate the accommodations, set their price, or determine their availability. Those decisions are made exclusively by the host, who decides whether to rent his property and on what terms.

The court reviewed Airbnb’s sign-up process, including screen shots of what the user sees when enrolling. The user is given sign-up options and told in all caps that the Terms of Service “contain important information regarding [a user’s] legal rights, remedies and obligations,” including “various limitations and exclusions, a clause that governs the jurisdiction and venue of disputes, and obligations to comply with applicable laws and regulations.” The “Dispute Resolution” section includes an arbitration provision in which a user and Airbnb “agree that any dispute, claim or controversy arising out of or relating to these Terms . . . or to the use of the Services or use of the Site . . . will be settled by binding arbitration.” The section also includes a class action waiver in which a user and Airbnb “agree that [they] 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.” Any arbitration is to be administered by the American Arbitration Association in accordance with its rules with California law governing any disputes.

Selden inquired about a listing in Philadelphia and was told by the host that the property was not available. Selden is African American, and any host could see his picture posted as part of the registration process. Suspecting he was rejected because of his race, Selden created two fake Airbnb accounts with pictures of white individuals. The host accepted their requests.

Selden sued Airbnb in District Court in the District of Columbia alleging violations the Civil Rights and Fair Housing Acts. Based on the arbitration clause in the Terms of Service, the district court granted Airbnb’s motion to compel arbitration. The district court determined that Airbnb’s sign-up screen placed Selden on reasonable notice of the Terms of Service, and therefore he had agreed to those terms when he signed up. Concluding that Selden’s discrimination claims were arbitrable, the district court ordered the parties to arbitrate.

The appellate opinion details various procedural and other matters which should be of interest to those concerned with legal claims for racial discrimination. Focusing on the arbitrability issue, the court noted that the Federal Arbitration Act and case law favors upholding arbitration provisions as a matter of policy and contract. California law requires mutual consent, and though noting that mutual consent is determined by objective rather than subjective criteria and that not all agreements to arbitrate would be enforced, the appellate court held that in this case the sign-in wrap agreement provided reasonable notice of its terms and was therefore enforceable. The court cited to Meyer, 868 F.3d at 76, and stated “We look to the ‘layout and language of the site’ to decide whether it would provide a ‘reasonably prudent smartphone user’ with ‘reasonable notice that a click’—i.e., signing up—'will manifest assent to an agreement.’”

The court concluded that Airbnb’s sign-up screen placed Selden on reasonable notice that by signing up he agreed to the Terms of Service, including its arbitration agreement, and it upheld the arbitration award.