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Airbnb Financing Host's Litigation Against NYC

By George Khoury, Esq. on August 06, 2018 | Last updated on March 21, 2019

The short-term rental service, Airbnb, is no stranger to litigation. However, it stands to reason that most of Airbnb's hosts aren't as familiar with the inside of a courtroom.

Nevertheless, Airbnb has decided to financially stand behind one of its hosts who is challenging a $32K fine issued by New York City, which has some of the most restrictive rules in the nation on short-term rentals. The Airbnb host, Stanley Karol, alleges that he was targeted for the fine in retaliation for speaking out against the latest local legislation requiring Airbnb to give the city a list of names and addresses for every host offering a rental in the city.

What's the Case About?

NYC is likely to argue that Karol publicly identified himself as a host and was in violation of certain laws and earned his fine fair and square because he wasn't following the rules. However, the fact is that there are over 23,000 Airbnb hosts still in NYC, and less than 140 have been fined. Karol was dinged for the fines in relation to a bedroom and a basement until he rents out on Airbnb.

But, like Peter Thiel investing in the Hulk Hogan Gawker case, Airbnb likely has ulterior motives beyond helping this one host fight this one fine.

Financing Litigation for Business Reasons

When a goliath-sized business is up against a government, or another goliath-sized entity, turning up the pressure can be achieved by helping others go after your adversary as well. It is no secret that Airbnb has been fighting against the NYC government for years now. And it makes sense that the deep-pocketed organization would go to bat for one of their hosts that has been vocal in expressing support for the service. Doing so encourages hosts to continue using the service, and it also ensures that the host bringing the challenge can afford to pay for some scorched earth litigation.

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