A court decision that threw out the New York attorney general's subpoena of Airbnb may also signal an upcoming major loss for the lodging rental service.
In a filing issued by the state's supreme court, a judge tossed out AG Eric Schneiderman's attempt to force Airbnb to release information about its hosts, but not before stating there was sufficient evidence of illegal activity.
"A general factual predicate for the issuance of the subpoena has been established," the judge wrote in the decision.
The New York attorney general had filed the subpoena seeking records of Airbnb hosts that may have broken housing laws by renting their apartments or not paying taxes from income earned through the rentals. The case kicked off a war of words between the rental company and the state's top lawmaker.
The attorney general erred in seeking too many files, with the judge noting that the request could end up with records for hosts that are not affected by the New York's multiple dwelling law. The judge said the bulk of the subpoena met the necessary legal qualifications for acceptance but needed to be tweaked.
"The subpoena at issue, as drafted, seeks materials that are irrelevant to the inquiry at hand and accordingly, must be quashed," the judge wrote.
A spokesperson for the New York attorney general said a new subpoena would be issued that addressed the issue brought up by the judge. "The judge rejected all of AirBnb’s arguments except for a narrow technical issue, and we will reissue the subpoena to address it," the spokesperson wrote in an email to Mashable.
The decision is a blow to Airbnb, which has also faced legal challenges in San Francisco and Portland. The company's rapid growth in the past two years has attracted the attention of authorities as well as the hotel industry.
It is a setback for Airbnb, but it may be just a bump in what has otherwise been a smooth ride. The company recently raised as much as $500 million in funding at a reported valuation of $10 billion. Airbnb is also believed to be exploring entry into other travel service markets. Still, the ruling is a setback in one of the company's largest markets.
Airbnb issued a statement that struck a conciliatory tone following the decision.
This decision is good news for New Yorkers who simply want to share their home and the city they love. Now, it’s time for us to work together. Airbnb hosts and the Attorney General share a common goal: we all want to make New York a better place to live, work and visit. We look forward to continuing to work with the Attorney General's Office to make New York stronger for everyone.
In turn, New York Senator Liz Krueger, who has been a vocal opponent of Airbnb, issued a statement that emphasized the state's confidence following the decision.
"Today's decision gives Airbnb a little time, but it looks like that's all it gives them. Judge Connolly ruled for the Attorney General on every substantive point, save a technical issue with the breadth of the subpoena," Krueger said in a statement sent to Mashable. "I'm no lawyer, but this looks like the definition of a pyrrhic victory for Airbnb."
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