Airbnb Gets More Fees From Lawyer Who Filed Frivolous Lawsuit

A California lawyer has been sanctioned in federal court for filing complaints against Airbnb that no reasonable attorney would have filed, but the court said the two lawsuits he filed did not show he deserved more punishment as a vexatious litigant.

Michael Mogan represented Veronica McCluskey in California state court in a lawsuit against the rental company. McCluskey claimed Airbnb destroyed his business after he complained to TV stations and police about Airbnb’s property being used to sell drugs.

McCluskey’s case was sent to arbitration. Airbnb paid its arbitration fees but the transaction was not properly recorded and the case was closed administratively.

When the recording error was discovered, the American Arbitration Association asked Mogan if his client wanted to reopen the case, but he did not respond. Mogan instead filed a motion in state court to reopen the proceedings there.

The state court said Mogan’s client could not use AAA’s clerical error to avoid its contractual obligation to arbitrate its claim. He also berated Mogan for lying about Airbnb’s speed of payments.

Mogan was ordered in state court to pay $22,160 for Airbnb’s legal fees to defend the motion.

Mogan then sued Airbnb, its attorneys, and several employees in the U.S. District Court for the Northern District of California, claiming that Airbnb failed to pay its arbitration fees on time and lied about it. He also said Airbnb sought sanctions against him in state court for harassing and extorting him.

Mogan’s allegations “have already been repeatedly dismissed in state court, a claim based on the same allegations is frivolous,” said Judge Thomas S. Hixson’s opinion.

No reasonable lawyer would have found Mogan’s complaint to be substantiated after conducting a reasonable and competent investigation, he said.

This lawsuit is an attempt by Mogan to revive an earlier case because he refuses to accept rulings in favor of Airbnb, the court heard.

Airbnb is entitled to reasonable costs for having to defend this action, the court said.

But Airbnb failed to show that Mogan was a vexatious litigant, the court heard. The two cases filed by Mogan in the Northern District of California are well below the number required before a person is deemed vexatious, he said.

Mogan represented himself. O’Melveny & Myers LLP represented Airbnb. Wingert Grebing Brubaker Juskie LLP represented Airbnb’s attorneys in the state case.

The deal is Mogan vs. Sacks Ricketts & Case LLP2022 BL 11156, ND Cal., no. 21-cv-08431-TSH, 1/12/22.