Ray v. AIRBNB, Inc. et al
Filing
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ORDER granting 21 Plaintiff's Motion to Remand. The Clerk is directed to REMAND the case to the Circuit Court of the Twentieth Judicial Circuit in and for Charlotte County, Florida, and to transmit a certified copy of this Order to the Clerk of that Court. The Clerk is further directed to terminate all deadlines and close this case. Signed by Judge Sheri Polster Chappell on 4/20/2018. (LMF)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
LARRY RAY, in his capacity as Collier
County Tax Collector, on behalf of
Collier County, Florida
Plaintiff,
v.
Case No: 2:18-cv-130-FtM-38MRM
AIRBNB, INC. and AIRBNB
PAYMENTS, INC.,
Defendants.
/
OPINION AND ORDER1
This matter comes before the Court on Plaintiff Larry Ray's Motion to Remand
(Doc. 21) filed on March 28, 2018. Defendants AirBnB, Inc. and AirBnB Payments, Inc.
(collectively “AirBnB”) responded on April 11, 2018. (Doc. 23). The matter is now ripe
for review.
BACKGROUND
The issue here is whether the Court has subject matter jurisdiction. Ray is the tax
collector for Collier County, Florida. (Doc. 2 at ¶ 7). AirBnB consists of two foreign
corporations that operate a website allowing consumers to search for and reserve short-
1
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Likewise, the Court has no agreements with any of these third parties or their websites.
The Court accepts no responsibility for the availability or functionality of any hyperlink.
Thus, the fact that a hyperlink ceases to work or directs the user to some other site does
not affect the opinion of the Court.
term rentals in Collier County. (Doc. 2 at ¶¶ 10-11, 50). To do so, a consumer generally
contacts a property owner through the AirBnB website, makes a reservation, and pays
AirBnB. (Doc. 2 at ¶ 51). Ray alleges AirBnB’s activities subject it to Collier County’s
Tourist Development Tax (the “TDT”), which levies a fee on entities that rent living
quarters in Collier County. (Doc. 2 at ¶¶ 43, 57-8). Ray alleges AirBnB does not comply
with the TDT because it has paid no such taxes. (Doc. 2 at ¶ 59).
Based on these facts, Ray sued AirBnB in state court. (Doc. 1 at ¶ 1). He then
filed a First Amended Complaint seeking a declaratory judgment that AirBnB’s activities
subject it to the TDT. (Doc. 2 at ¶¶ 67-71). Along the same lines, the First Amended
Complaint seeks “an Order requiring [AirBnB] . . . to submit to an audit of their books and
records” and “declaring that [the] TDT is due on the amounts collected by [AirBnB] for the
short-term rental of [t]ransient [a]ccomodations in Collier County.” (Doc. 2 at 12 (f), (j)).
Finally, it seeks to enjoin AirBnB from “engaging in activities contrary to the requirements
of the” TDT. (Doc. 20 at ¶¶ 74). The First Amended Complaint pleads no amount in
controversy.
AirBnB then removed the case to this Court, arguing the requirements for diversity
jurisdiction were satisfied because the parties were diverse, and the damages requested
in the First Amended Complaint exceed $75,000.00. (Doc. 1). This is the case, AirBnB
contends, because the First Amended Complaint seeks an order requiring it to pay the
TDT for past and future rentals. (Doc. 1 at ¶¶ 25-26). Though AirBnB admitted future
rentals could not satisfy the amount in controversy threshold, it claimed that assessing
the TDT on past rentals would result in damages exceeding $75,000.00. (Doc. 1 at ¶¶
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26-27). Now, Ray argues remand is proper because AirBnB has not shown that the Court
has subject matter jurisdiction.
LEGAL STANDARD
“Federal courts are courts of limited jurisdiction. They possess only that power
authorized by Constitution and statute.” Kokkonen v. Guardian Life Ins. Co. of Am., 511
U.S. 375, 377 (1994). In general, “[i]t is to be presumed that a cause lies outside this
limited jurisdiction.” Id. “Under 28 U.S.C. § 1441, a case filed in state court can be
removed to federal court if the district court has original jurisdiction, which exists if there
is federal question jurisdiction under 28 U.S.C. § 1331 or diversity jurisdiction under 28
U.S.C. § 1332.” Hialeah Anesthesia Specialists, LLC v. Coventry Health Care of Florida,
Inc., 258 F. Supp. 3d 1323, 1326 (S.D. Fla. 2017). Diversity jurisdiction exists where the
amount in controversy exceeds $75,000.00, exclusive of interests and costs, and the
dispute exists between citizens of different states. 28 U.S.C. § 1331(a)(1).
“[A] defendant seeking to remove a case to a federal court must file in the federal
forum a notice of removal containing a short and plain statement of the grounds for
removal.” Dart Cherokee Basin Operating Co., LLC v. Owens, 135 S. Ct. 547, 553 (2014)
(internal punctuation omitted). This tracks with the standard set out in Federal Rule of
Civil Procedure 8(a). Id. When a party invokes federal-court jurisdiction, uncontested
jurisdictional allegations are accepted. Id. But with a contested removal, a defendant
must prove, by a preponderance of the evidence, facts supporting the existence of federal
jurisdiction. Id. (citing 28 U.S.C. § 1446(c)(2)(B)); see also McCormick v. Aderholt, 293
F.3d 1254, 1257 (11th Cir. 2002).
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DISCUSSION
Ray argues this case should be remanded because the amount in controversy
threshold for diversity jurisdiction has not been met. In support, he contends that the First
Amended Complaint does not plead specific damages or seek reimbursement for taxes
owed by AirBnB for past activities. He also argues any prospective damages that would
flow from declaratory and injunctive relief would be too speculative to satisfy the amount
in controversy requirement. AirBnB opposes these arguments. It contends the amount
in controversy threshold is satisfied because the object is to impose tax liabilities on
AirBnB for past rentals that allegedly amount to more than $75,000.00, and future tax
liabilities for prospective rentals. AirBnB’s argument fails.
The Eleventh Circuit has been clear that “[w]hen a plaintiff seeks injunctive or
declaratory relief, the amount in controversy is the monetary value of the object of the
litigation from the plaintiff's perspective.” Cohen v. Office Depot, Inc., 204 F.3d 1069,
1077 (11th Cir. 2000). “In other words, the value of the requested . . . relief is the monetary
value of the benefit that would flow to the plaintiff if the [relief] were granted.” Id. With
that in mind, the propriety of the Court’s subject matter jurisdiction here turns on the object
of the litigation. If, as AirBnB argues, the First Amended Complaint asks the Court to
declare Collier County is entitled to reimbursement for AirBnB’s past rentals, the benefits
flowing from such relief would allegedly exceed the amount in controversy threshold. On
the other hand, if, as Ray contends, the First Amended Complaint only seeks entitlement
to reimbursement for AirBnB’s future rentals, the benefits would be too speculative and
immeasurable to satisfy the amount in controversy requirement. See Ericsson GE Mobile
Commc'ns, Inc. v. Motorola Commc'ns & Elecs., Inc., 120 F.3d 216, 222 (11th Cir. 1997)
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(finding that where relief is “too speculative and immeasurable” it cannot satisfy the
amount in controversy requirement).
The plain language of the First Amended Complaint does not solve this problem.
AirBnB argues that the First Amended Complaint’s request for a declaratory judgment
finding the TDT “is due on the amounts collected by [AirBnB],” is proof that Ray will seek
past tax obligations if the relief is granted. (Doc. 2 at 12 (f)). But that argument does not
carry because the clause is not sufficiently specific to indicate whether the relief requested
concerns only the future, or the past and the future. Both constructions make logical
sense.
Similarly, AirBnB argues that the First Amended Complaint’s request for
declaratory judgment requiring it to “submit to an audit of their books and records relating
to the short term rental of [t]ransient [a]ccomodations in Collier County” is proof the object
of the litigation is to pursue past tax liabilities. (Doc. 2 at 12-13 (j)). AirBnB supports this
argument by noting Ray declined to stipulate to removal in return for an agreement to
waive the right to hold AirBnB liable for allegedly unpaid past taxes. But this argument
fails because there is no plausible tie between AirBnB’s rejected offer and the audit. For
one thing, Ray is under no obligation to surrender rights to seek reimbursement for
alleged wrongs in the future simply to gain a stipulation at the current juncture. For
another, given the wide universe of reasons for which Ray could seek the audit, it would
be untenably speculative to assume the purpose of the request is to pursue AirBnB’s past
tax liabilites. This is doubly true given Ray’s specific denial of any intention to do so in
this lawsuit.
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Because of these findings, the Court finds the terms of the First Amended
Complaint to be ambiguous. In such cases, the Eleventh Circuit has found that “all doubts
about the propriety of removal should be resolved in favor of remand.” King v. Gov't
Employees Ins. Co., 579 F. App'x 796, 800 (11th Cir. 2014). The Court will not break
step with that binding directive here. Because AirBnB has failed to satisfy its burden to
establish the existence of subject matter jurisdiction by a preponderance of the evidence,
this case will be remanded to state court. See id.
Accordingly, it is now
ORDERED:
1. Plaintiff's Motion to Remand (Doc. 21) is GRANTED.
2. The Clerk is directed to REMAND the case to the Circuit Court of the Twentieth
Judicial Circuit in and for Charlotte County, Florida, and to transmit a certified
copy of this Order to the Clerk of that Court.
3. The Clerk is further directed to terminate all deadlines and close this case.
DONE and ORDERED in Fort Myers, Florida this 17th day of April, 2018.
Copies: All Parties of Record
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