LA Price Gouging Suit Against Airbnb Looks Likely to Survive (1)

A Los Angeles lawsuit accusing Airbnb Inc. of price gouging during the height of the 2025 wildfires appears likely to move forward after a tentative ruling from a California court.

Judge Robert Broadbelt III on Monday tentatively rejected Airbnb’s bid to for dismissal of the suit, according to a copy of that unsigned order obtained the City Attorney’s office. The judge has not yet made a final ruling on the issue.

Lawyers for both sides had appeared before Broadbelt in Los Angeles County Superior Court earlier in the day.

Broadbelt gave no indication then of his perspective, saying only that he would take the matter under submission and issue a final ruling at a later date.

The second most-populous US city sued on behalf of the People of California in July 2025, alleging Airbnb illegally inflated rental prices in the wake of the Palisades and Eaton fires that ripped through Southern California earlier that year.

The city said Airbnb engaged in unfair competition and ran afoul of Los Angeles and state price gouging laws, which are triggered by a state of emergency. Those laws prohibit inflating prices by more than 10% in an emergency. This affected at least 2,000 LA properties in the immediate aftermath of the fire, the city claimed.

LA took aim at “Smart Pricing,” an Airbnb tool the company says adjusts nightly price of a listing “based on demand.”

Price Setting

Airbnb only disabled this feature days after the fires began in response to a request from California Attorney General Rob Bonta (D), the lawsuit said. This was an acknowledgment that “Smart Pricing” caused the illegal high prices, the complaint alleged.

Airbnb argued that its third-party hosts were responsible for setting their own prices, insulating the company from liability. “Hosts are solely responsible for setting prices, and do so independently,” the company’s motion to toss the suit said.

Jon Dean of Sidley Austin LLP, arguing for Airbnb, said that the company does not set or advertise its prices. He said “Smart Pricing” was an optional tool that users can deploy, allowing hosts to set a price range that the feature navigates based on demand.

Under Los Angeles’ theory of liability, Airbnb should go back and check the price that each individual sets, Dean said.

Tiffany Tejeda-Rodriguez, representing the city responded that the feature allows Airbnb to set the price without the host monitoring.

Locations at Issue

The city also alleged that Airbnb didn’t adequately verify some of the information marketed on its platform, citing multiple instances where the host’s identity didn’t appear accurate, or that a listing was miles from its advertised location.

Airbnb argued that a verification label doesn’t guarantee a particular location. It means that the host has demonstrated that the listing “is a real home, at an accurate location,” and that the host has access to that spot.

The company also noted that a verified ID simply means that the host has a “valid legal identity,” but legal names aren’t required for privacy reasons.

During the hearing, Dean expanded on this, saying “I would submit my 93-year-old father would understand that a face name on a platform is not necessarily going to match what is on someone’s government ID.”

The city is requesting the court prohibit Airbnb from price gouging and engaging in competition, plus potential monetary relief for violations of city and state law and attorneys fees.

The Office of the Los Angeles City Attorney represents LA. Sidley Austin LLP represents Airbnb.

The case is People v. Airbnb, Cal. Super. Ct., No. 25STCV21244, hearing on demurrer 6/22/26.