Airbnb Gets More Fees From Lawyer Who Filed Frivolous Lawsuit

Jan. 13, 2022, 7:59 PM

A California lawyer has been sanctioned by a federal court for filing claims against Airbnb that no reasonable lawyer would’ve filed but the court said the two suits he filed didn’t show that he deserved more sanctions as a vexatious litigant.

Michael Mogan represented Veronica McCluskey in California state court in a suit against the rental company. McCluskey claimed that Airbnb destroyed her business after she complained to television stations and the police about Airbnb property being used to sell drugs.

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

When the recording error was discovered, the American Arbitration Association asked Mogan if his client wished to reopen the matter, but he didn’t respond. Mogan instead filed a motion in state court to reopen the proceedings there.

The state court said Mogan’s client couldn’t use AAA’s clerical error to avoid her contractual obligation to arbitrate her claim. It also admonished Mogan for lying about the timeliness of Airbnb’s payments.

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

Mogan then sued Airbnb, its attorneys, and several employees in the U.S. District Court for the Northern District of California, claiming Airbnb didn’t pay its arbitration fee on time and lied about it. He also said Airbnb sought the sanctions against him in state court to harass and extort him.

Mogan’s allegations “have already been rejected on multiple occasions in state court, a complaint premised on the same allegations is frivolous,” the opinion by Judge Thomas S. Hixson said.

No reasonable attorney would’ve found Mogan’s complaint to be well-founded after conducting a reasonable and competent inquiry, it said.

This suit is an attempt by Mogan to relitigate a prior case because he refuses to accept the rulings in Airbnb’s favor, the court said.

Airbnb is entitled to reasonable fees for having to defend this suit, the court said.

But Airbnb didn’t show that Mogan was a vexatious litigant, the court said. The two cases Mogan filed in the Northern District of California are far below the number required before a person is considered vexatious, it said.

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

The case is Mogan v. Sacks Ricketts & Case LLP, 2022 BL 11156, N.D. Cal., No. 21-cv-08431-TSH, 1/12/22.

To contact the reporter on this story: Bernie Pazanowski in Washington at bpazanowski@bloomberglaw.com

To contact the editors responsible for this story: Rob Tricchinelli at rtricchinelli@bloomberglaw.com; Steven Patrick at spatrick@bloomberglaw.com

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