Uber Drivers Must Arbitrate Claims In Safe Rides Fee Row

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Law360, Los Angeles (December 8, 2016, 7:25 PM EST) -- Uber drivers who signed arbitration agreements

must arbitrate their breach of contract claims against the ride-hailing app over the charging of a “safe rides

fee,” a California federal judge ruled Thursday, pointing to Uber’s pledge to shoulder the full share of the

arbitration costs.

Eight plaintiffs who did not opt out of the arbitration agreements opposed Uber's bid to compel arbitration of

their claims, saying the nonrecoverable filing fee of the complaint and the costs of arbitration surpassed the

measure of economic loss to the putative class members in the case.

Those so-called non-opt-out plaintiffs argued that their arbitration agreements nonetheless provide for court

intervention if the relief they seek would be rendered ineffectual without that provisional relief.

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But U.S. District Judge Yvonne Gonzalez Rogers pointed out in her order that “Uber has agreed to pay the

full costs of arbitration for plaintiffs” to render this provisional relief unnecessary.

“Accordingly, as the Ninth Circuit held, so long as Uber abides by its commitment, the non-opt-out plaintiffs

are faced with no obstacles in the effective vindication of their rights, and the court need not address whether

the fee term would create such obstacles otherwise,” she wrote.

The judge compelled the non-opt-out drivers into arbitration and stayed the action as it relates to those eight

drivers pending arbitration. Her order also denied as moot the drivers’ bid to certify the class and denied

Uber’s motion to stay the action as it relates to drivers who did opt out of arbitration agreements.

The May 2016 complaint accuses Uber of pushing the expense of its “Safe Rides” program — a marketing

campaign to assure riders that Uber drivers are properly vetted through background checks — onto the

drivers themselves, in violation of driver contracts with Uber.

The suit was filed shortly before the Ninth Circuit, in reversing a California judge’s June 2015 ruling, held

that most of the independent contractors suing Uber over conducting background checks without

authorization must individually arbitrate their labor claims and cannot pursue them as a class.

The federal appellate court held that arbitration provisions and class action waivers in Uber’s 2013, June

2014 and November 2014 agreements were valid and enforceable and that the issue of whether they’re

enforceable is to be decided by an arbitrator, not the courts.

The non-opt-out plaintiffs in October sought certification for non-opt-out classes, which would include all

people in the U.S. who entered the December 2015 arbitration agreement and did not opt out of arbitration, as

well as those drivers who entered into the earlier agreements and did not opt out. Uber opposed the bid,

saying the dispute should be forced into arbitration, particularly in light of the Ninth Circuit decision.

Judge Rogers on Thursday said because the non-opt-out plaintiffs must individually arbitrate their claims,

class certification was not appropriate. She allowed the drivers to amend their complaint to include any

additional plaintiffs if desired.

She also denied Uber's bid to impose a stay against the plaintiffs who did opt out of arbitration, saying such a

postponement would lead to a waste of judicial resources. She noted that continuing with those claims would

not negatively affect the parallel arbitration proceedings involving the other plaintiffs or otherwise prejudice

Uber.

Congdon is represented by John G. Crabtree, Charles M. Auslander, Brian C. Tackenberg and George R.

Baise Jr. of Crabtree & Auslander, Andrew A. August of Browne George Ross LLP and Mark A. Morrison of

Morrison and Associates.

Uber is represented by William L. Stern, Claudia M. Vetesi and Lucia X. Roibal of Morrison & Foerster LLP

and in-house counsel Christin Hill and Seth Schreiberg.

The case is Congdon v. Uber Technologies Inc. et al., case number 4:16-cv-02499, in the U.S. District Court

for the Northern District of California.