Jurisdiction declined for consumers in a class action

In a class action brought against Airbnb by consumers, the District Court of The Hague ruled that no jurisdiction exists for those consumers’ claims. Youp Pletting and Koen Rutten disagree. They wrote a critical note on the Airbnb judgment.

Airbnb – no jurisdiction in respect of the interest organisation

Stichting Massaschade & Consument (SMC), an interest organisation within the meaning of Section 3:305a 3 of the Dutch Civil Code, instituted proceedings against Ireland UC. SMC represented the interests of a strictly defined group of Dutch consumers. The organisation substantiated its entitlement to sue Airbnb before the Dutch court inter alia on the alternative ground of jurisdiction under Article 18 of the Brussels I-bis Regulation, which confers the right on consumers to bring a case before the court of the country in which they are domiciled. With reference to the judgment rendered by the CJEU in Schrems, the District Court of The Hague concluded that SMC, in its capacity as an interest organisation, could not derive international jurisdiction from Article 18 of the Brussels I-bis Regulation because the consumers themselves were not party to the proceedings.

Nature of a Section 305a organisation ignored

The authors are of the opinion that the District Court of The Hague ignored the fact that – by law – interest organisations within the meaning of Section 3:305a of the Dutch Civil Code do not occupy the same legal position as assignees. In principle, the outcome of the proceedings largely have binding force on the strictly defined group of consumers. Those consumers can only avoid being bound by the outcome by issuing an opt-out statement before the court renders judgment. In addition, class actions take priority over individual claims, which may be stayed.

Efficient and effective legal protection would have improved if the District Court of The Hague had ruled that, by law (Section 3:305a of the Dutch Civil Code), SMC also had the procedural power of consumers (under Article 18 of the Brussels I-bis Regulation) to bring proceedings before the court in the country where the foundation (SMC) is domiciled. That would also have reflected the factual situation of the interest organisation within the meaning of Section 3:305a of the Dutch Civil Code. Moreover, it was foreseeable for Airbnb that the interests of Dutch consumers would be represented by a Dutch interest organisation, and that that interest organisation would sue it in the Netherlands.

The authors go on to discuss the development of jurisdiction for class actions within the parameters of the Brussels I-bis Regulation, and the hesitance displayed by the European legislature. Their preferred solution, based partly on the interest of collective consumer protection, is for the legislature to grant jurisdiction to the court of the place where the interest organisation has its registered offices.

Contract or tort?

In Wikingerhof the CJEU gives several guidelines for distinguishing between claims based on contracts and claims based on torts. The CJEU ruled that, for claims based on a contract, the interpretation of the contract is necessary to establish whether the conduct was lawful or unlawful. In the Airbnb case, the District Court of The Hague did not make that assessment because SMC had not argued a tort. The authors raised the question of whether the court could have given a ruling (or at least a partial ruling) in abstracto that Airbnb had acted contrary to Section 7:417(2) of the Dutch Civil Code and had therefore committed a tort. That also puts the assessment of jurisdiction in a different light.

If you have any questions about the matters discussed in the case note in JBPr 2023/86, or if you would like to discuss what is and what is not possible in terms of consumer claims and class actions, please feel free to contact us.