throbber
Case 1:18-cv-07712-PAE Document 1 Filed 08/24/18 Page 1 of 29
`
`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF NEW YORK
`
`AIRBNB, INC.,
`
`Plaintiff,
`
`v.
`
`THE CITY OF NEW YORK,
`
`Defendant.
`
`
`
`CIVIL ACTION NO. 18-cv-_______
`
`
`
`COMPLAINT FOR DECLARATORY
`AND INJUNCTIVE RELIEF
`
`
`
`Plaintiff Airbnb, Inc. (“Airbnb”), by and through its undersigned counsel, for its
`
`Complaint against Defendant the City of New York (the “City”), alleges as follows:
`
`INTRODUCTION
`
`1.
`
`Local Law 2018/146, N.Y.C. Admin. Code § 26-2101–4 (the “Homesharing
`
`Surveillance Ordinance” or the “Ordinance”) is an extraordinary act of government overreach. It
`
`is also the product of a multi-million dollar campaign funded by the City’s powerful hotel lobby,
`
`which is intent on intimidating New Yorkers into abandoning homesharing.
`
`2.
`
`The Homesharing Surveillance Ordinance requires homesharing platforms to turn
`
`over an unprecedented amount of intimate personal data about their New York City hosts and
`
`whom they invite into their homes each month to a government enforcement agency—the Mayor’s
`
`Office of Special Enforcement—that works shoulder to shoulder with private investigators hired
`
`and paid by the hotel lobby. No probable cause, notice, or legal review is contemplated in
`
`connection with the bulk collection of this data, and no real restrictions are placed on its use or
`
`dissemination. As such, the Ordinance is an unlawful end-run around established restraints on
`
`governmental action and violates core constitutional rights under the First and Fourth Amendments
`
`to the U.S. Constitution and Article I, Section 12 of the New York Constitution, as well as the
`
`federal Stored Communications Act, 18 U.S.C. §§ 2701 et seq.
`
`

`

`Case 1:18-cv-07712-PAE Document 1 Filed 08/24/18 Page 2 of 29
`
`3.
`
`Under normal circumstances, government agencies may obtain private information
`
`about citizens only by following the strict legal processes that protect constitutional rights and
`
`provide for review and challenge. The Homesharing Surveillance Ordinance evades those
`
`protections by mandating—under threat of newly-created legal liability—that Internet platforms
`
`holding the sought-after data obtain blanket, advance “consent” from their users and then
`
`automatically surrender the demanded data to the City’s enforcement agency every month.
`
`Because users of these platforms have no opportunity to challenge this turnover of data to the
`
`Office of Special Enforcement, the City is betting that they will walk away from homesharing.
`
`4.
`
`More specifically, the Ordinance targets data concerning New Yorkers who share
`
`their homes with travelers on a short-term basis using an Internet homesharing platform like
`
`Airbnb. For each instance in which a New York City residence is rented on a short-term basis
`
`using such a platform, the Homesharing Surveillance Ordinance requires that the platform turn
`
`over to the City’s enforcement agency on a monthly basis:
`
`a.
`
`b.
`
`the address of the residence;
`
`the full legal name, address, telephone number, and email
`
`address of the host;
`
`c.
`
`the specific identifiers (name, number, and URL) of both the
`
`home and the host on the homesharing platform;
`
`a statement of when and how the residence was occupied;
`
`the total number of days the residence was rented;
`
`the fees received by the platform; and
`
`if the platform collects rent, the amount paid and host bank
`
`d.
`
`e.
`
`f.
`
`g.
`
`account information.
`
`-2-
`
`

`

`Case 1:18-cv-07712-PAE Document 1 Filed 08/24/18 Page 3 of 29
`
`5.
`
`Thus, the Ordinance requires Internet homesharing platforms to turn over personal
`
`information about their hosts, much of which is not made public through the platforms. The
`
`Ordinance also requires homesharing platforms to turn over their own non-public and
`
`commercially sensitive information, including detailed breakdowns of revenues and technical
`
`information about listings. To the extent a platform collects rent, it is also required to hand over
`
`highly sensitive bank account information about how guests choose to pay and how much. All of
`
`this is data the Office of Special Enforcement could not otherwise obtain without precompliance
`
`review, and the Ordinance permits that agency to use and share the data however and whenever it
`
`chooses, without any meaningful limitation. In so doing, the Ordinance breaches critical privacy
`
`protections both for homesharing platforms like Airbnb and for the New Yorkers who share their
`
`homes on these platforms.
`
`6.
`
`Put another way, the Homesharing Surveillance Ordinance requires Airbnb to
`
`report on a monthly basis volumes of otherwise private information about who New Yorkers
`
`choose to invite into their homes, where those homes are located, when and for how long the guests
`
`stay, and what the guests are doing there.
`
`7.
`
`As the Supreme Court has recognized, “when it comes to the Fourth Amendment,
`
`the home is first among equals. At the Amendment’s ‘very core’ stands ‘the right of a man to
`
`retreat into his own home and there be free from unreasonable governmental intrusion.’” Florida
`
`v. Jardines, 569 U.S. 1, 6 (2013) (quoting Silverman v. United States, 365 U.S. 505, 511 (1961)).
`
`Indeed, “the overriding respect for the sanctity of the home . . . has been embedded in our traditions
`
`since the origins of the Republic.” Payton v. New York, 445 U.S. 573, 590 (1980). The
`
`Homesharing Surveillance Ordinance is inconsistent with these fundamental principles.
`
`-3-
`
`

`

`Case 1:18-cv-07712-PAE Document 1 Filed 08/24/18 Page 4 of 29
`
`8.
`
`City Council members and other State and City officials claim that this extreme
`
`governmental surveillance is somehow necessary because housing is being taken off the market
`
`illegally for use as short-term rentals and thereby driving up housing costs. As of June 1, 2018,
`
`however, there are only about 28,000 “entire home” Airbnb listings spread across New York
`
`City—approximately 0.8 percent of New York City homes. Moreover, 95% of hosts listing an
`
`entire home on Airbnb have only a single home offered—hardly a threat to the City’s housing
`
`stock.
`
`9.
`
`City officials also claim that the Homesharing Surveillance Ordinance was
`
`designed to combat illegal hotel operators, but the Ordinance makes no distinction between
`
`commercial operators and the ordinary New Yorkers who use Airbnb’s homesharing platform to
`
`supplement their income so they can afford to remain in their homes and support their families.
`
`10.
`
`The reality is the Ordinance is the product of a lobbying campaign funded by the
`
`hotel industry, which believes it is being threatened by homesharing and has co-opted the very
`
`agency—the Office of Special Enforcement—that will receive and exploit the data.
`
`11.
`
`The Homesharing Surveillance Ordinance provides that enforcement agency with
`
`a complete picture into New York homesharing without the need for probable cause, notice, legal
`
`process, or review. The Office of Special Enforcement will be able to use the compelled
`
`information for whatever nefarious purpose it desires without a need to articulate a reasonable
`
`relation to any particular investigation. Office of Special Enforcement agents already are using
`
`data from servers purchased from data-mining company Palantir—including data collected and
`
`supplied to the agency by the hotel lobby’s private investigators—to turn up unannounced at New
`
`Yorkers’ private homes to harass homesharing hosts and guests and issue citations for alleged
`
`violations (many of which are subsequently dismissed upon challenge).
`
`-4-
`
`

`

`Case 1:18-cv-07712-PAE Document 1 Filed 08/24/18 Page 5 of 29
`
`12.
`
`Even worse, nothing in the Homesharing Surveillance Ordinance secures the data.
`
`For example, nothing in the Ordinance prevents the Office of Special Enforcement from sharing
`
`the data with other agencies or turning the data over to any member of the public—including
`
`individuals associated with the hotel lobby—who files a request under the Freedom of Information
`
`Law.
`
`13.
`
`Given the above, it should come as no surprise that this surveillance regime far
`
`exceeds in scope and severity the regulations imposed on any other industry in New York City.
`
`New York City hotels are not required to disclose this same information about all of their patrons’
`
`stays.
`
`14.
`
`In sum, the systematic, ongoing, bulk surveillance mandated by the Homesharing
`
`Surveillance Ordinance is illegal. The Ordinance requires Airbnb and other homesharing
`
`platforms to communicate a chilling message to their users under the guise of obtaining “consent”
`
`and then to surrender to the City an extraordinary amount of commercially sensitive and personal
`
`information about their hosts without cause or protection. This unprecedented end-run around
`
`restraints on governmental action warrants this Court’s intervention.
`
`OVERVIEW OF CLAIMS
`
`15.
`
`Plaintiff Airbnb brings this action under 42 U.S.C. § 1983, 18 U.S.C. § 2707 and
`
`28 U.S.C. § 2201 to declare unlawful Chapter 21 of Title 26 of the New York City Administrative
`
`Code and to enjoin its enforcement.
`
`16.
`
`The Homesharing Surveillance Ordinance violates the Fourth Amendment to the
`
`U.S. Constitution because it authorizes warrantless searches of Airbnb’s private business records
`
`without any opportunity for precompliance review. The information sought under the Ordinance
`
`is highly sensitive and proprietary commercial and personal data in which Airbnb has a reasonable
`
`expectation of privacy.
`
`-5-
`
`

`

`Case 1:18-cv-07712-PAE Document 1 Filed 08/24/18 Page 6 of 29
`
`17.
`
`For the same reasons, the Homesharing Surveillance Ordinance also violates
`
`Article I, Section 12 of the New York State Constitution.
`
`18.
`
`In addition, the Homesharing Surveillance Ordinance directly conflicts with, and is
`
`preempted by, the Stored Communications Act, 18 U.S.C. §§ 2701 et seq. (the “SCA”), because it
`
`compels Airbnb to disclose host information to the City without the legal process or consent
`
`required by the SCA. Indeed, one of Congress’ goals in enacting the SCA was to protect the
`
`privacy of data belonging to customers of electronic communication service providers like Airbnb.
`
`See S. Rep. No. 99-541, at 1 (1986). The Ordinance squarely conflicts with that Congressional
`
`objective.
`
`19.
`
`Finally, the Homesharing Surveillance Ordinance violates the First Amendment
`
`insofar as it “compel[s] [Airbnb] to speak a particular message.” Nat’l Inst. of Family & Life
`
`Advocates v. Becerra, 138 S. Ct. 2361, 2371 (2018). Airbnb will be forced to communicate a City-
`
`mandated message that users of Airbnb’s homesharing platform must consent to the production of
`
`their sensitive personal and financial information, that their mere use of the platform will constitute
`
`consent to the disclosure of that information, and that their information will be turned over to a
`
`special government agency that targets New Yorkers who participate in homesharing.
`
`THE PARTIES
`
`20.
`
`Plaintiff Airbnb is a corporation organized and existing under the laws of the state
`
`of Delaware, with its principal place of business in San Francisco, California. Airbnb is a
`
`homesharing platform; it maintains a website and mobile applications that provide access to an
`
`online marketplace for people to list, explore, and book both short-term and long-term housing
`
`accommodations.
`
`21.
`
`Defendant the City of New York is an incorporated municipality within the State
`
`of New York.
`
`-6-
`
`

`

`Case 1:18-cv-07712-PAE Document 1 Filed 08/24/18 Page 7 of 29
`
`JURISDICTION AND VENUE
`
`22.
`
`This Court has subject matter jurisdiction pursuant to 28 U.S.C. § 1331 and 42
`
`U.S.C. § 1983 because Airbnb alleges violation of its rights under the Constitution and laws of the
`
`United States.
`
`23.
`
`Pursuant to 28 U.S.C. § 1367, this Court has supplemental jurisdiction over
`
`Airbnb’s claims arising under the New York State Constitution because they are so related to the
`
`federal claims asserted in this action that they form part of the same case or controversy under
`
`Article III of the U.S. Constitution.
`
`24.
`
`The Court may declare the legal rights and obligations of the parties in this action
`
`pursuant to 28 U.S.C. § 2201 because the action presents an actual controversy within the Court’s
`
`jurisdiction.
`
`25.
`
`Venue is proper under 28 U.S.C. § 1391 because the defendant is located and
`
`resides in this judicial district and in the State of New York, and because a substantial part of the
`
`events giving rise to the claims for relief occurred in this judicial district, or in the alternative,
`
`because the defendant is subject to personal jurisdiction in this district.
`
`FACTUAL ALLEGATIONS
`
`Homesharing and Airbnb
`
`26.
`
`“Homesharing” is the renting of one’s own home to travelers. This is not a new
`
`concept, but the Internet has made it easier and more accessible for people around the globe.
`
`Websites and Internet applications provide a platform that facilitates the matching of travelers
`
`looking for a place to stay (guests) with local people looking to share their spaces (hosts) and then
`
`provides the means to enter into an agreement, securely communicate, and pay for the stay.
`
`-7-
`
`

`

`Case 1:18-cv-07712-PAE Document 1 Filed 08/24/18 Page 8 of 29
`
`27.
`
`Founded in 2008, Airbnb is a homesharing platform with the mission of creating a
`
`world where people can belong when they travel by being connected to local cultures and having
`
`unique travel experiences.
`
`28.
`
`As of June 1, 2018, there were approximately 27,500 “entire home” Airbnb listings
`
`spread across New York City. In terms of the overall housing stock, that amounts to approximately
`
`0.8 percent of New York City homes.
`
`29.
`
`The overwhelming majority of Airbnb hosts in New York City are individuals who
`
`have only one listing on the platform. Indeed, as of June 1, 2018, 95% of hosts who rent out full
`
`homes in New York City are individuals with just one listing.
`
`30.
`
`Often Airbnb listings are outside of the typical tourist zones and offer more
`
`affordable accommodations than traditional commercial options.
`
`31.
`
`Publicly-available data shows that Airbnb has a significantly positive impact on
`
`local communities, including those within New York City.
`
`32. More than 700,000 short-term rental bookings were made through Airbnb’s
`
`platform in New York City in 2016, generating roughly $2.8 billion in economic activity and
`
`supporting approximately 30,000 jobs in New York City.
`
`33.
`
`In many cases, the supplemental income hosts earn is what enables them to afford
`
`to remain in their homes. Indeed, in an annual survey, 77% of Airbnb hosts in New York reported
`
`that they use the money they earn sharing their homes to remain in their homes, 28% of hosts
`
`reported that homesharing has helped them avoid eviction, and another 18% reported that
`
`homesharing has helped them avoid foreclosure.
`
`34.
`
`The beneficial effects of the Airbnb platform are even more pronounced in low-
`
`income neighborhoods. The median supplemental income of an Airbnb host in New York City’s
`
`-8-
`
`

`

`Case 1:18-cv-07712-PAE Document 1 Filed 08/24/18 Page 9 of 29
`
`low-income neighborhoods was more than $4,500 for the year ending July 1, 2016—the equivalent
`
`of a 13% boost to median household income in these communities. A typical family in these
`
`communities can increase its median monthly income by 10% by renting out its apartment for a
`
`single three-day weekend.
`
`35.
`
`The beneficial effects of Airbnb are likewise more pronounced in minority
`
`communities. Homesharing through the Airbnb platform generated nearly $60 million in income
`
`for hosts in predominantly Hispanic neighborhoods in 2016, more than $70 million in income for
`
`hosts in predominantly African American neighborhoods in 2017 (which was up 63% from 2016),
`
`and more than $20 million in income for hosts in predominantly Chinese American neighborhoods.
`
`36.
`
`A National Bureau of Economic Research working paper published earlier this year
`
`estimated that in ten major U.S. cities, “consumer surplus would decrease by $276 million” in one
`
`year if not for Airbnb. Indeed, the working paper found an average of “a consumer surplus of $41
`
`per night for every Airbnb booking,” with New York City gaining a consumer surplus of $42 per
`
`night for every Airbnb booking.1
`
`Hosts and Guests Provide Sensitive Personal Information to Airbnb
`
`37.
`
`In using the Airbnb platform, hosts and guests input sensitive personal information
`
`into Airbnb’s systems.
`
`38.
`
`Before anyone can use the Airbnb platform, as a host or guest, they must first
`
`become a member of Airbnb. To sign up as a member on the Airbnb website, a user clicks the
`
`“Sign up” link at the top right of the homepage, www.airbnb.com. Users can also sign up using
`
`Airbnb’s mobile app.
`
`
`1 Chiarra Farronato & Andrey Fradkin, The Welfare Effects of Peer Entry in the Accommodation Market: The Case
`of Airbnb, National Bureau of Economic Research (February 2018) at 6, 50, http://www.nber.org/papers/w24361.
`
`-9-
`
`

`

`Case 1:18-cv-07712-PAE Document 1 Filed 08/24/18 Page 10 of 29
`
`39.
`
`In signing up, the user then submits certain identifying information (or enters their
`
`Facebook or Google credentials) and clicks “Sign up”:
`
`
`
`
`
`
`
`-10-
`
`

`

`Case 1:18-cv-07712-PAE Document 1 Filed 08/24/18 Page 11 of 29
`
`40.
`
`After clicking “Sign up,” the user is prompted to accept Airbnb’s Community
`
`Commitment, Terms of Service, Payments Terms of Service, Privacy Policy, and
`
`Nondiscrimination Policy, all of which are mandatory to use the platform. A user can read each
`
`of those documents by clicking the appropriate link.
`
`
`
`
`
`
`
`-11-
`
`

`

`Case 1:18-cv-07712-PAE Document 1 Filed 08/24/18 Page 12 of 29
`
`41.
`
`To become a “host,” a user creates a listing for their accommodation on the
`
`platform, and provides descriptions, images and videos, prices, and dates of availability for the
`
`space:
`
`42.
`
`A typical Airbnb listing shows the general location, basic description, and the host’s
`
`first name. Listings do not include a host’s full name, email address, or telephone number, nor do
`
`they disclose the listing address. All of that information is kept by Airbnb in its non-public
`
`
`
`systems.
`
`-12-
`
`

`

`Case 1:18-cv-07712-PAE Document 1 Filed 08/24/18 Page 13 of 29
`
`43.
`
`Thus, while guests can search listings by location, dates, or other criteria, in order
`
`to protect the privacy and security of the hosts, the platform does not disclose full host names or
`
`listing addresses in search results.
`
`44.
`
`Once guests have identified accommodations in which they may be interested,
`
`guests and hosts can use the platform to securely and privately message each other. Such
`
`communications may contain terms or conditions of the stay or other aspects of the agreement
`
`between the host and the guest.
`
`45.
`
`If a guest and a host reach an agreement, the platform then (and only then) securely
`
`discloses the listing address to the guest.
`
`46.
`
`The Airbnb platform also provides a secure payment-processing service through
`
`which the guest pays the host electronically.
`
`47.
`
`Airbnb keeps users’ sensitive personal information private and uses it for purposes
`
`of facilitating Airbnb transactions, such as to provide customer service, enable communications
`
`between users, and monitor for fraud. Airbnb discloses sensitive personal information to
`
`governmental entities only in response to valid legal requests. Given the above, Airbnb hosts and
`
`guests have a reasonable expectation of privacy in the non-public information they share with
`
`Airbnb.
`
`The Hotel Industry Views Homesharing as a Threat and Has Launched an Aggressive
`Attack to Stop It
`
`
`48.
`
`The popularity of homesharing platforms like Airbnb is viewed as a threat by the
`
`traditional hotel industry in New York City because homesharing provides travelers a unique and
`
`often less expensive alternative to the City’s high-priced hotels. This limits the ability of hotels to
`
`charge gouging rates at peak times and in areas of high concentration. In 2015, Jon Bortz, chief
`
`executive of Pebblebrook Hotel Trust, which at the time owned Embassy Suites, Doubletree, and
`
`-13-
`
`

`

`Case 1:18-cv-07712-PAE Document 1 Filed 08/24/18 Page 14 of 29
`
`other hotels, said that Airbnb limited the company’s “ability to price at what maybe the customer
`
`would describe as sort of gouging rates.”2
`
`49.
`
`As a recent Forbes article explained, “Airbnb is revolutionizing the lodging market
`
`by keeping hotel rates in check and making additional rooms available in the country’s hottest
`
`travel spots during peak periods when hotel rooms often sell out and rates skyrocket.”3 “That’s
`
`bad news for hotels . . . [a]nd it’s good news for travelers.”4
`
`50.
`
`As a result, while hotels are having some of their best years on record, the hotel
`
`lobby is spending millions to attack homesharing.
`
`51.
`
`One of the hotel lobby’s main tools for thwarting homesharing is exerting influence
`
`over the legislative process. In the hotel lobby’s own words: “Objective: Build on the success of
`
`2016 efforts to ensure comprehensive legislation in key markets around the country and create a
`
`receptive environment to launch a wave of strong bills at the state level while advancing a national
`
`narrative.” 5
`
`The Hotel Lobby Uses New York City Officials to Thwart Airbnb
`
`52.
`
`In New York City, since at least 2013, the hotel lobby has mounted an aggressive
`
`campaign to stamp out the competitive threat posed by Airbnb, spending vast sums of money
`
`
`2 Elizabeth Dwoskin, Hotel CEO openly celebrates higher prices after anti-Airbnb law passes, THE WASHINGTON
`POST (Oct. 26, 2016), https://www.washingtonpost.com/news/the-switch/wp/2016/10/26/hotel-executive-openly-
`celebrates-higher-prices-after-anti-airbnb-law-passes/.
`
`3 Dina Gerdeman, The Airbnb Effect: Cheaper rooms for Travelers, Less Revenue for Hotels, FORBES.COM (Feb. 27,
`2018), https://www.forbes.com/sites/hbsworkingknowledge/2018/02/27/the-airbnb-effect-cheaper-rooms-for-
`travelers-less-revenue-for-hotels/.
`
`4 Id.
`
`5 The Hotel Industry’s Plans to Combat Airbnb, Pages from a 2016 American Hotel and Lodging Association
`document outlining plans to fend off Airbnb in the coming year, N.Y. TIMES (Apr. 16, 2017),
`https://www.nytimes.com/interactive/2017/04/16/technology/document-hotel-industry-plans-to-combat-airbnb-
`excerpt.html.
`
`-14-
`
`

`

`Case 1:18-cv-07712-PAE Document 1 Filed 08/24/18 Page 15 of 29
`
`funding attacks against homesharing platforms, and supporting candidates for office whom it
`
`believes will push government efforts to obstruct homesharing. This powerful lobby has also
`
`focused its efforts on co-opting the Office of Special Enforcement.
`
`53.
`
`Created in 2006, the Office of Special Enforcement has responsibility for
`
`“overseeing response to conditions at properties throughout the City that threaten quality of life
`
`and require a coordinated response from multiple agencies or otherwise demand special attention”
`
`including inspections, investigations and “implementation of other remedies by such agency staff
`
`for violation of the City’s Building, Fire Prevention and Health Codes.” Mayor’s Exec. Order No.
`
`96 § 2 (NYC 2006).
`
`54.
`
`The Office of Special Enforcement originally was intended to be an expansion of a
`
`decades-old effort to improve public safety and quality of life in midtown Manhattan through the
`
`Office of Midtown Enforcement. In its early years, the Office of Special Enforcement cracked
`
`down on counterfeit products, went after video piracy, and enforced the City’s noise code.
`
`55.
`
`Beginning in 2013, however, the mission, budget, and practices of the Office of
`
`Special Enforcement changed dramatically, as the hotel lobby began to implement its strategy to
`
`have the agency target homesharing.
`
`56.
`
`Since 2013, the hotel lobby has given at least $460,217 to members of the New
`
`York City Council, as well as $235,404 to Mayor Bill de Blasio and $46,850 to Comptroller Scott
`
`Stringer. In the 2017 elections, the New York Hotel and Motel Trades Council (“HTC”) spent
`
`$395,498 on seven City Council races through its Hotel Workers for Stronger Communities
`
`group—the most of any independent group.
`
`57.
`
`Not long after the 2013 elections, the mission of the Office of Special Enforcement
`
`began to shift toward a focus on targeting homesharing. The transition was overseen by the
`
`-15-
`
`

`

`Case 1:18-cv-07712-PAE Document 1 Filed 08/24/18 Page 16 of 29
`
`agency’s Director at the time, Elan Parra. Under Parra’s leadership, the Office of Special
`
`Enforcement in 2014 issued approximately 1,200 violations relating to homesharing.
`
`58.
`
`Also, shortly after Mayor de Blasio took office, the City purchased 24 “Gotham”
`
`server cores from Palantir, Inc. (“Palantir”)—at a cost of nearly a million dollars. The Gotham
`
`server cores include highly sophisticated technology that aggregates and synthesizes data from
`
`various sources into a common format and a single database. The master Gotham database retains
`
`this aggregated data even if the original source data is later removed or deleted.
`
`59.
`
`After the City purchased the Gotham server cores, it acquired licenses for a Palantir
`
`mobile technology that allows users to access the master Gotham database from a smartphone.
`
`That technology was quickly rolled out to Office of Special Enforcement agents. In the words of
`
`one press report, this mobile technology “connect[s] them to everything the City knows about
`
`every place within it.” Another press report explained that Office of Special Enforcement agents
`
`use the technology to “catch Airbnb hosts.”
`
`60.
`
`In mid-June 2015, with the focus of the Office of Special Enforcement shifted to
`
`homesharing and with the Palantir technology in place, Parra left the agency and went to work for
`
`the hotel lobby. On July 20, 2015, a consulting firm named Lemire LLC announced that Parra had
`
`joined as Managing Director. Lemire was retained by and works on behalf of the Hotel
`
`Association of New York City (“HANYC”). The day after the announcement of Parra’s move to
`
`Lemire, the City announced that it was doubling the Office of Special Enforcement’s budget, in
`
`an effort to transform the agency into an active investigation and enforcement unit with a proactive
`
`mission targeted at homesharing.
`
`61.
`
`Parra maintained close ties with Office of Special Enforcement personnel after his
`
`move to Lemire. And as early as August 2015, Parra and the Office of Special Enforcement began
`
`-16-
`
`

`

`Case 1:18-cv-07712-PAE Document 1 Filed 08/24/18 Page 17 of 29
`
`coordinating their efforts to attack Airbnb and its homesharing hosts. For example, on August 10,
`
`2015, an Office of Special Enforcement official forwarded an invitation to an Airbnb Happy Hour
`
`to Parra with the subject line “Great U/C [undercover] Opportunity.” The official suggested to
`
`Parra that they could “infiltrate, get some insight and then vacate the party.”
`
`62.
`
`In November 2015, Jason Ortiz—a managing director at another hotel-industry-
`
`affiliated consulting firm, Metropolitan Public Strategies (“MPS”)—left MPS and rejoined HTC
`
`as its deputy director. Almost immediately, HTC gave $100,000 to HANYC for what public
`
`disclosures called a “BNB Campaign”—an apparent reference to Airbnb. The close coordination
`
`between hotel groups and the Office of Special Enforcement escalated.
`
`63.
`
`Upon information and belief, by 2017, the Office of Special Enforcement had
`
`effectively outsourced a substantial portion of its investigatory work to private hotel groups,
`
`including Lemire. The agency was, at the very least, relying on “dossiers” that Lemire
`
`investigators provided to the agency “wrapped in a bow.”6 And the agency reported in mid-2017
`
`that it was spending 95% of its time on enforcement efforts related to homesharing.
`
`64.
`
`The Office of Special Enforcement can and does serve subpoenas, warrants, and
`
`other legal process on Airbnb for information about hosts in connection with its enforcement
`
`efforts. As in all other cities in the United States, this general procedure is both constitutional and
`
`legal when done properly—it is targeted in nature, provides for precompliance review of such
`
`process, and generally allows notice to be provided to users who have the opportunity to object for
`
`themselves in advance of their information being produced.
`
`
`6 Josh Eidelson, Hotel Money Is Funding Anti-Airbnb Sting Operations, BLOOMBERG BUSINESSWEEK (July 12,
`2017), https://www.bloomberg.com/news/articles/2017-07-12/hotel-money-is-funding-anti-airbnb-sting-operations
`
`-17-
`
`

`

`Case 1:18-cv-07712-PAE Document 1 Filed 08/24/18 Page 18 of 29
`
`65.
`
`Airbnb complies with such legal process and provides information sufficient to
`
`meet the OSE’s investigative needs with appropriate precompliance review.
`
`66.
`
`Following legal process, however, apparently has not satisfied the Office of Special
`
`Enforcement and its hotel lobby allies.
`
`The Homesharing Surveillance Ordinance Threatens Private Information Without Cause
`or Protection
`
`
`67.
`
`The Homesharing Surveillance Ordinance is the latest chapter in the hotel lobby’s
`
`campaign against Airbnb and the everyday New Yorkers who use its platform. Indeed, the
`
`Ordinance is exactly the kind of “comprehensive legislation” that the hotel lobby identified as a
`
`priority in late 2016.
`
`68.
`
`The Homesharing Surveillance Ordinance was passed by the City Council on
`
`July 18, 2018, and signed into law by Mayor de Blasio on August 6, 2018. It is scheduled to go
`
`into effect in February 2019.
`
`69.
`
`Under the Ordinance, online homesharing platforms are required to “[s]ubmit to
`
`the [Office of Special Enforcement] . . . a report of transactions . . . on a monthly basis.” N.Y.C.
`
`Admin. Code § 26-2102(a). These monthly transaction reports must include, among other things,
`
`for every short-term rental through the platform:
`
`(1)
`
`(2)
`
`(3)
`
`(4)
`
`The physical address of the short-term rental associated with
`such transaction, including the street name, street number,
`apartment or unit number, borough or county, and zip code;
`
`The full legal name, physical address, phone number and
`email address of the host of such short-term rental and the
`uniform resource locator (URL) and the individualized name
`and number of such host on such booking service’s platform;
`
`The individualized name and number and the URL of such
`advertisement or listing;
`
`A statement as to whether such short-term rental transaction
`involved (i) short-term rental of the entirety of a dwelling
`
`-18-
`
`

`

`Case 1:18-cv-07712-PAE Document 1 Filed 08/24/18 Page 19 of 29
`
`(5)
`
`(6)
`
`(7)
`
`unit or housing accommodations in a building or (ii) short-
`term rental of part of such unit or housing accommodations;
`
`The total number of days that the dwelling unit, part thereof
`or housing accommodations in a building were rented as a
`short-term rental through such booking service’s platform;
`
`The total amount of fees received by such booking service
`for such short-term rental; and
`
`If such booking service collects rent for short-term rentals
`on behalf of such host, (i) the total amount of such rent
`received by such booking service and transmitted to such
`host and (ii) the account name and consistently anonymized
`identifier for the account number for the account used by
`such host to receive payments from such booking service or,
`if such booking service provides an explanation why such
`anonymized identifiers are unavailable, the account name
`and account number for such account.
`
`70.
`
`If allowed to go into effect, these provisions would require Airbnb to turn over
`
`personal information of its hosts that is not made publicly available through the platform, including
`
`the full legal names, home addresses, telephone numbers, and email addresses of hosts, as well as
`
`detailed information about how they use their private property and whether and when they invite
`
`others into their homes. To the extent a homesharing platform “collects rent,” the Ordinance also
`
`requires the production of sensitive bank account i

This document is available on Docket Alarm but you must sign up to view it.


Or .

Accessing this document will incur an additional charge of $.

After purchase, you can access this document again without charge.

Accept $ Charge
throbber

Still Working On It

This document is taking longer than usual to download. This can happen if we need to contact the court directly to obtain the document and their servers are running slowly.

Give it another minute or two to complete, and then try the refresh button.

throbber

A few More Minutes ... Still Working

It can take up to 5 minutes for us to download a document if the court servers are running slowly.

Thank you for your continued patience.

This document could not be displayed.

We could not find this document within its docket. Please go back to the docket page and check the link. If that does not work, go back to the docket and refresh it to pull the newest information.

Your account does not support viewing this document.

You need a Paid Account to view this document. Click here to change your account type.

Your account does not support viewing this document.

Set your membership status to view this document.

With a Docket Alarm membership, you'll get a whole lot more, including:

  • Up-to-date information for this case.
  • Email alerts whenever there is an update.
  • Full text search for other cases.
  • Get email alerts whenever a new case matches your search.

Become a Member

One Moment Please

The filing “” is large (MB) and is being downloaded.

Please refresh this page in a few minutes to see if the filing has been downloaded. The filing will also be emailed to you when the download completes.

Your document is on its way!

If you do not receive the document in five minutes, contact support at support@docketalarm.com.

Sealed Document

We are unable to display this document, it may be under a court ordered seal.

If you have proper credentials to access the file, you may proceed directly to the court's system using your government issued username and password.


Access Government Site

We are redirecting you
to a mobile optimized page.





Document Unreadable or Corrupt

Refresh this Document
Go to the Docket

We are unable to display this document.

Refresh this Document
Go to the Docket