A Cook County judge has shut the door on an attempt by the owner of a luxury high-rise apartment building in Chicago’s Theater District to make Airbnb pay for allowing tenants to use the online short-term vacation rental platform to find tourists willing to sublet their apartments, which, the apartment building owners said, violate the terms of the leases, while disrupting life in the apartment building.

In his 33-page opinion, Cook County Circuit Judge Moshe Jacobius on Feb. 14 dismissed all of the counts against Airbnb in the lawsuit brought last July by MDA City Apartments LLC, owner of what they describe as a “historic building” at 63 E. Lake St., at the corner of East Lake and North Wabash Avenue, in Chicago’s North Loop. The building contains 190 apartments, ranging from studio units to three bedrooms. The units are listed for rent from about $1,600-$3,600 per month.

Leonard Gail
Leonard Gail | Massey & Gail LLP

The lawsuit named as defendants Airbnb and another company, TempHomes Chicago, which the complaint said specializes in providing “temporary living and corporate housing” and which the complaint asserts holds several apartments in the 63 E. Lake building.

According to the lawsuit, many tenants, including TempHomes, list units for short-term rent through Airbnb, even though their leases and building rules prohibit them from doing so. MDA City’s lawsuit alleged this has led to  “security issues” in the building, including noise complaints, vandalism and “trespass.” The landlord further alleged the stream of unauthorized sublessors through Airbnb has also led to a number of tenants declining to renew their leases.

They argued Airbnb should be held liable because MDA informed Airbnb of the lease terms and rules barring apartment tenants from listing their units for sublease, but the short-term vacation rental service refused to take down the listings, encouraging the tenants in their actions, “aiding and abetting trespass” and other damage, and interfering with MDA’s business relationships.

In response, Airbnb asked Judge Jacobius to dismiss the counts leveled against it in the lawsuit, arguing, under the federal Communications Decency Act, it could not be held responsible for tenants’ decisions to list rental opportunities that violate their lease or building rules, and that MDA could not actually demonstrate how Airbnb’s online listings had actually harmed them.

In his ruling, Jacobius entirely sided with Airbnb.

Time and again in the written decision, Jacobius noted MDA had not offered any specific evidence to back its assertions concerning disruption or destruction in its building caused by Airbnb. He noted MDA’s lawsuit and supporting motions have not identified “with any specificity … persons who have trespassed on the property” or “any specific tenant that failed to renew a lease.”

And the judge said the law does not allow him to hold Airbnb responsible for the actions of others using their service to locate short-term rental or vacation housing.

“… The Court does not find that advertising short-term rentals on a website equates to Airbnb controlling what the Airbnb guests did on rented properties,” Jacobius wrote. “There are no allegations that Airbnb controlled or attempted to control any guests’ actions on rented properties.”

The judge also supported Airbnb’s assertions it was protected under the CDA, saying Airbnb met the definition of “interactive computer service,” rather than “information content provider,” and thus could not be held liable for the listings posted by its users.

While MDA argued Airbnb offers a host of services to users, including “verification of the identities of hosts and guests, a secure platform to collect and transfer payments, a $1 million ‘Host Guarantee’ for damage to the property, Host Protection Insurance, ‘Guidebooks’ which provide prospective guests with the ‘best’ places to rent, etc.,” the judge noted “none of these services involve … Airbnb … actually developing any of the information in the listings.”

“In this action, MDA is ultimately taking issue with the content that Airbnb publishes in listings that were created by third-party users and which Airbnb played no active role in creating,” Jacobius wrote. “It is the content of the listings that MDA claims violates its leases.”

He said Airbnb should be treated in this instance as “the publisher/speaker of information that was provided by another information content provider,” and thus, shielded from liability under the CDA.

Jacobius dismissed this element of the complaint against Airbnb, alleging Airbnb’s listing service causes trespass and property damage, with prejudice – meaning MDA is barred from amending their lawsuit to raise it again.

“There are not circumstances under which MDA could replead its claims against the Airbnb defendants to avoid preemption” under the CDA, Jacobius wrote.

MDA City Apartments is represented in the Chicago case by attorneys Chrisopher Kentra, Jeffrey Greenspan and Corey Hickman, of the law firm of Cozen O’Connor, of Chicago.

Representing Airbnb are attorneys Leonard Gail, Suyash Agrawal and Paul Berks, of the firm of Massey & Gail LLP, of Chicago.

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