B.W. v. Airbnb

Background

B.W., a Montana citizen suing through his father as his next friend, alleged that he suffered carbon-monoxide poisoning while staying at an Airbnb rental in Santa Fe, New Mexico. The opinion states that B.W. was an infant at the time and suffered a permanent brain injury along with related cognitive, physiological, behavioral, and social abnormalities. He sued Airbnb for negligence.

B.W. alleged that Airbnb knew about the dangers of carbon-monoxide poisoning and knew that carbon-monoxide alarms could prevent exposure and poisoning. He also alleged that Airbnb had promised to require hosts to confirm that smoke and carbon-monoxide detectors were installed but never required or verified that hosts had such alarms. Airbnb moved to dismiss the negligence claim and to strike the request for punitive damages.

Judicial Notice

Airbnb asked the court to take judicial notice of its Terms of Service, Version 11, which Airbnb represented were in effect when B.W. was injured. The court’s request was GRANTED IN PART AND DENIED IN PART: the court took notice of the existence of the terms but not the truth of assertions contained in them.

Choice of Law

Because the case was in federal court based on diversity jurisdiction, the court applied California’s choice-of-law rules. Under California’s governmental-interest test, the court found that California and New Mexico law differed on legal duty, punitive damages, and the burden of proof. It also found a true conflict because New Mexico had an interest in applying its law to an injury occurring within New Mexico, while California had an interest in setting the liability rules for Airbnb, which the complaint identified as a California corporation with its principal place of business in San Francisco.

The court applied California law by default. It explained that B.W., as the party seeking application of New Mexico law, had not shown that New Mexico’s interests would be more impaired if California law applied. The court therefore used California law to decide whether B.W. adequately alleged that Airbnb owed him a duty of care.

Negligence and Duty of Care

Under California law, negligence requires a duty of care, a breach of that duty, and a legally caused injury. Whether a duty exists is a threshold legal question for the court. California’s general duty rule is subject to a multifactor analysis that considers whether the defendant’s conduct created a risk of harm and whether public-policy factors justify narrowing or eliminating the duty.

The court held that B.W. adequately alleged that Airbnb’s conduct created a risk of harm. According to the complaint, Airbnb knew about carbon-monoxide risks, knew that alarms could prevent poisoning, and nevertheless did not require hosts to install alarms or have hosts or guests confirm that alarms were present. The court reasoned that Airbnb’s platform facilitated rental transactions on a large scale and that Airbnb’s alleged decision not to implement controls increased the risk that guests would stay at properties without carbon-monoxide detectors.

The court rejected Airbnb’s argument that it could not owe a duty because it did not own or control the rental property or heater. It concluded that Airbnb’s overall conduct, including how it operated its platform, allegedly created a risk of harm. The court also found that foreseeability, the connection between Airbnb and B.W.’s injury, certainty of harm, public-policy concerns, the burden of precautions, prevention of future harm, alleged blameworthiness, and insurance considerations did not justify limiting the duty at the motion-to-dismiss stage.

Punitive Damages

California law permits punitive damages in a noncontract action when the defendant is proven by clear and convincing evidence to have acted with oppression, fraud, or malice. Airbnb argued under Rule 12(b)(6), the rule allowing dismissal for failure to state a legally sufficient claim, that B.W. had not alleged facts supporting punitive damages.

The court considered B.W.’s allegations as true and in the light most favorable to him. It found sufficient allegations for the punitive-damages request, including Airbnb’s alleged knowledge of carbon-monoxide dangers, its alleged knowledge that alarms could prevent poisoning, its prior public promise to require alarms, its failure to require or verify alarms, and the allegation that it chose not to do so because removing noncompliant listings could hurt its bottom line.

Disposition

The court concluded that the motion to dismiss should be denied. It denied Airbnb’s motion to dismiss and DENIED Airbnb’s request to strike B.W.’s request for punitive damages.