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Car-Rental App Turo Appears to Stall in Logan Airport Fight

In a key test case for the “sharing” economy, the Massachusetts Supreme Judicial Court seemed highly unsympathetic Friday to a car-share app accused of skirting rental-car rules at Boston’s Logan Airport.

BOSTON (CN) — In a key test case for the “sharing” economy, the Massachusetts Supreme Judicial Court seemed highly unsympathetic Friday to a car-share app accused of skirting rental-car rules at Boston’s Logan Airport.

Massport, which operates the airport, brought the case against the popular car-sharing website Turo. Last year, Massport obtained a preliminary injunction barring Turo from providing airport pickups that might eat into the $80 million a year in fees Massport collects from airport rental-car companies.

On appeal, Turo has leaned on Section 230 of the 1996 Communications Decency Act. The law says that websites can’t be sued over content posted by users — a point that seemed unlikely Friday to win over Justice Scott Kafker.

“You’re not a Google,” Kafker told Turo’s lawyer, Elizabeth Prelogar of Cooley LLC in Boston. “You’re not just a passive publisher of information.

“You’ve created this business. You framed it, encouraged it, advertised, it, and you’re getting a chunk of the money from each transaction,” Kafker went on. “You’re not just publishing information; you’re structuring the whole setup.”

Massport claims that when users agree to car-share pickups at Logan, they’re trespassing, and Turo is aiding and abetting the trespass.

Justice Delila Wendlandt seemed to think that such a claim was outside the scope of Section 230’s protection.

“Why does the aiding and abetting trespass claim treat Turo as a publisher?” she demanded of Prelogar. “Turo encourages transactions by offering roadside assistance, safety policies, host agreements and insurance. Isn’t that more than treating Turo as a publisher?”

Prelogar replied that Massport wasn’t harmed by Turo’s offer of car insurance.

“But doesn’t it help the trespass that there’s this insurance, roadside assistance and so on?” asked Wendlandt. “Doesn’t that aid in the trespass?”

Turo is involved in a similar case brought by the Los Angeles airport authority that’s now pending before the Ninth Circuit. The company has slightly different disputes ongoing with airports in San Francisco and Tampa, Florida.

The Massachusetts justices repeatedly brought up a 2019 Ninth Circuit case that held that Section 230 didn’t stop the city of Santa Monica, California, from regulating short-term rentals of the sort offered by Airbnb and HomeAway. The home-rental apps couldn’t be sued for listings posted by users, but they could be required not to process transactions that violated the regulations, the court said.

Justice Serge Georges suggested that Turo could do the same thing.

“Can’t you just not process those Logan transactions?” he asked. “You’ve got all these really smart people; can’t you just create an algorithm and block them?”

Justice David Lowy added, “the transaction is key.”

Wendlandt noted that the lower court’s injunction required Turo to alter users’ postings, which she said did violate Section 230. But she asked Prelogar if she wanted to suggest a way to rewrite the order along the lines that Georges proposed, so that Turo would be barred from processing transactions.

“There’s no way to adjudicate the trespass claim without looking at user content,” Prelogar objected.

“So you’re saying it’s all or nothing?” Wendlandt replied, strongly hinting that if Prelogar didn’t relent, Turo would end up with nothing.

Kafker asked Massport’s lawyer, David Mackey of Anderson & Kreiger in Boston, to explain the difference under Section 230 between “classic bulletin boards” and sharing services such as Turo.

Mackey pointed to a 2016 First Circuit case where the online classified service Backpage was ruled immune under Section 230 for illegal sex ads, noting that all Backpage did was host ads posted by users.

“It would have been different if Backpage were entering into contracts with escorts, taking money and booking reservations,” Mackey said. 

“Turo acts like these are ancillary services and a trivial detail,” Mackey complained. “But active facilitation of transactions is not an ancillary part of their business; it’s the core of what they do.”

Mackey told the court that Turo had facilitated 8,500 illegal transactions at Logan in 2018 and 2019. “It’s not just a handful of vehicle owners. It was 50% of Turo’s Boston business. They made more than a million dollars.”

If the court holds that Turo isn’t protected by Section 230, it could lead to big problems not only for sharing-economy sites but also for other sorts of online marketplaces that connect buyers and sellers, according toEric Goldman, a Santa Clara University law professor who is a leading expert on Section 230.

Goldman pointed to a case that allowed Amazon to be sued by a woman who was injured by an exploding battery. Amazon didn’t manufacture the battery but it facilitated a transaction on its site between the woman and an independent retailer.

Sophia Cope, a senior staff attorney at the Electronic Frontier Foundation, said efforts to distinguish user content from facilitating transactions based on that content amount to “judicial gymnastics.”

Cope believes that eroding Section 230 will cause many valid websites to shut down or curtail operations.

“More liability means more censorship,” she said, noting that Craigslist shut down its entire personals section rather than risk being sued over a few illegal ads after Congress amended Section 230 in 2018 to crack down on sex trafficking. “That affected thousands and thousands of legitimate users,” she said, “and it didn’t stop sex trafficking; it just drove it underground and made it harder to track.”

Section 230 has come under increasing criticism lately in part because of claims that it shields child pornography, terrorism and hate speech. Many Democrats complain that the law encourages deliberate right-wing political misinformation, and many Republicans are upset that it allows social media sites to censor posts based on their political viewpoint.

Goldman said that he expects a “tsunami” of Section 230 reform bills once the new Congress convenes.

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