Riders Want Their Day in Court, but Uber Moves to Arbitrate Data-Breach Class Actions
The dispute stems from Uber's announcement that hackers had stolen the personal information of 57 million drivers and riders in 2016, and that it had paid them $100,000 to destroy the information.
August 08, 2018 at 07:51 PM
5 minute read
Uber has moved to push class actions brought over its 2017 data breach into arbitration.
U.S. District Judge Philip Gutierrez, who is overseeing the data breach lawsuits in the Central District of California, told lawyers at the first status hearing last month that he would focus on the arbitration arguments, which Uber raised in at least eight of the 17 cases so far.
Click here to read Uber's response to the notice
Gutierrez also has asked plaintiffs lawyers to file a motion for lead counsel by Aug. 13.
Plaintiffs attorney Ben Barnow of Barnow and Associates in Chicago, who filed a motion last month before Gutierrez relating to the arbitration matter in his case, declined to comment. Desmond Hogan and Michelle Kisloff, both partners at Hogan Lovells in Washington, D.C., who represent Uber Technologies Inc., did not respond to a request for comment.
The dispute stems from Uber's Nov. 21 announcement that hackers had stolen the personal information of 57 million drivers and riders in 2016. It also admitted that it paid them $100,000 to destroy the information. Several government entities, like the city of Chicago and the states of Pennsylvania and Washington, have sued Uber over its breach in state courts.
Regulators, Not Class Actions, Could Drive Legal Response to Uber Data Breach
In federal court, meanwhile, Uber immediately filed its motions to compel arbitration in most of the class actions. On April 4, the U.S. Judicial Panel on Multidistrict Litigation sent the lawsuits to Gutierrez.
Gutierrez held his first hearing on July 30, after which he said he would focus on the arbitration motions in the case.
In those motions, Uber argues that multiple other courts have upheld its arbitration agreements, contained in the “terms and conditions” that riders see when creating an account. Among those are a decision from the U.S. Court of Appeals for the Second Circuit, which last year found in a price-fixing class action, called Meyer v. Uber, that a “reasonable user” of a smartphone would understand the process to agree to Uber's terms of service.
“This court should reach the same conclusion as judges in this district and across the country that, in reviewing similar Uber sign-up processes and arbitration provisions as those here, have found binding and enforceable agreements to arbitration,” defense counsel, Hogan, wrote in a Feb. 5 motion to compel arbitration in Barnow's case.
Last month, Barnow, whose firm opposed that motion, filed a supplemental memorandum flagging the First Circuit's June 25 decision in Cullinane v. Uber, which struck down Uber's arbitration agreement in a case alleging unnecessary fees for travel in East Boston.
In opposing arbitration, plaintiffs lawyers have argued that Uber's agreement doesn't pertain to data-breach claims. But they also insist that Uber's terms are inconspicuous. For instance, there is a hyperlink in a light gray box with a black background—rather than blue and underlined—and text gets covered up when a keyboard pops up on the screen to enter credit card information.
Plaintiffs attorneys cite a 2017 decision by U.S. District Judge Richard Seeborg in a case over Uber's cancellation fees that found a similar keypad blocking the registration process. And the First Circuit decision criticized the gray letters on black background, concluding that Uber's terms of service were less conspicuous than payment information.
Judge Nixes Uber Arbitration Bid in Rider Suit
“The circumstances addressed in Cullinane are virtually identical to those placed at issue by Uber's outstanding motion to compel,” Barnow wrote in his supplemental memorandum.
Uber countered that the First Circuit wasn't binding and, moreover, got it wrong. The ruling failed to acknowledge most smartphone users would have understood the process or that hyperlinks come in all “colors, fonts, icons and shapes,” including on the First Circuit's own website, wrote Kisloff in a response on Monday.
“The First Circuit's decision in Cullinane was wrongly decided and conflicts with the current legal landscape regarding assent to online agreements,” she wrote. “It also inexplicably departs from the reasoning applied by other courts that have reviewed the registration processes for Uber riders.”
Related stories:
MDL Panel Skirts Bay Area in Transferring Lawsuits Against Uber, Intel
Appeals Court Finds for Uber, Says App Made Service Terms Clear
Read Uber's full response to the notice of supplemental authority:
Read the decision by Judge Juan R. Torruella for the First Circuit:
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