Charlotte Epps-Stowers, et al v. Uber Technologies, Inc., No. 3:2016cv06652 - Document 147 (N.D. Cal. 2019)
Court Description: ORDER GRANTING MOTION TO COMPEL ARBITRATION, FOLLOWING EVIDENTIARY HEARING by Judge Richard Seeborg granting 105 Motion to Compel.(tlS, COURT STAFF) (Filed on 7/30/2019)
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Charlotte Epps-Stowers, et al v. Uber Technologies, Inc. Doc. 147 1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 NORTHERN DISTRICT OF CALIFORNIA 9 10 CHARLOTTE EPPS-STOWERS, et al., Case No. 16-cv-06652-RS Plaintiffs, 11 United States District Court Northern District of California v. 12 13 UBER TECHNOLOGIES, INC., Defendant. ORDER GRANTING MOTION TO COMPEL ARBITRATION, FOLLOWING EVIDENTIARY HEARING 14 15 I. INTRODUCTION 16 17 Defendant Uber Technologies, Inc., operates what it first marketed as a “ride sharing” 18 service, where persons seeking transportation could utilize Uber’s application through the internet 19 to find persons willing to drive them to their destinations. The service has become widely known, 20 and now competes with traditional taxi cab services, in that Uber drivers are not typically simply 21 looking to “share” rides, but to earn substantial income through their use of the Uber app. 22 Customers likewise are usually looking for what a traditional taxi cab would provide, but with 23 service level and price advantages. 24 Plaintiffs in this putative class action contend Uber wrongfully charges would-be riders 25 cancellation fees under certain circumstances. Uber moved to compel arbitration as to the original 26 named plaintiff, Julian Metter. Although the motion was initially denied, in light of direction from 27 the Court of Appeal, it became apparent that Uber was entitled to a “mini trial” under section 4 of 28 the Federal Arbitration Act to determine whether Metter consented to the purported arbitration Dockets.Justia.com 1 agreement. See 9 U.S.C. § 4 (“If the making of the arbitration agreement or the failure, neglect, or 2 refusal to perform the same be in issue, the court shall proceed summarily to the trial thereof.”). 3 Metter subsequently withdrew from this action as a plaintiff before the evidentiary hearing 4 went forward, due to health issues. The new named plaintiffs are Charlotte Epps-Stowers and 5 Robert Verklas. Upon consideration of the evidentiary record presented at the hearing and in the 6 briefing, the motion to compel arbitration will be granted. 7 8 United States District Court Northern District of California 9 II. BACKGROUND Uber contends Epps-Stowers and Verklas both effectively consented to the arbitration 10 provision (1) when they signed up for Uber, and (2) when they continued using Uber after being 11 sent an email with “updated” terms and conditions. The prior motion practice involving Metter did 12 not include the second issue. As to the first issue, however, the prior order was explicit: 13 14 15 16 17 18 19 20 21 22 23 24 25 26 [T]he registration process Metter went through when creating his Uber account is of paramount importance in deciding this motion. That process featured two screens. The first asked for Metter’s name, email address, and phone number, along with a password for his new account . . . . The next screen sought his credit card number, expiration date, security code, and billing zip code. It also featured a large “REGISTER” button that allowed Metter to complete the registration process. At the bottom of the screen, the following alert was displayed: “BY CREATING AN UBER ACCOUNT, YOU AGREE TO THE TERMS OF SERVICE & PRIVACY POLICY.” The bold, underlined portion of this alert is a clickable hyperlink to Uber’s terms of service, which contain the arbitration provision Uber now seeks to invoke . . . .When Metter tapped any of the numerical information fields on this screen, like the “Credit Card Number” field, a keypad popped up allowing him to enter numerical information. The keypad would have remained activated for as long as Metter entered numerical information, and until Metter pressed “REGISTER” to complete the registration process. The keypad obstructed the previously visible terms of service alert . . . . Had Metter scrolled down on this page, the terms of service alert would have returned to view, even if the pop-up keypad remained activated . . . . Metter successfully registered for an account through this registration process. 27 28 CASE NO. 2 16-cv-06652-RS United States District Court Northern District of California 1 Metter challenged assent to arbitration on four grounds: (1) the alert in the sign-up process 2 he utilized was not sufficiently conspicuous to put him on notice he was agreeing to Uber’s terms 3 of service; (2) the alert was confusing and does not put registrants on notice that they are waiving 4 jury trial rights; (3) the alert is an unenforceable “browsewrap” agreement; and (4) in any event, a 5 pop-up keypad enabling Metter to enter his credit card information blocked the terms of service 6 alert, preventing him from seeing it and thereby preventing him from assenting to the terms of 7 service. The prior order concluded the first three arguments were unavailing, for reasons stated 8 therein.1 9 The motion to compel arbitration was denied, and an evidentiary hearing was subsequently 10 ordered, however, because there was at least a question of fact as to whether Metter’s “declaration 11 that he never saw the terms of service alert [was] credible and consistent with the functioning of 12 the Uber app,” given the issue that “the keypad obstruction is a fatal defect to the alert’s 13 functioning.” While the substitution of Epps-Stowers and Verklas as plaintiffs may permit them to 14 raise the additional issue of whether their use of Uber after it sent an email with revised terms of 15 service constitutes consent, they have not presented grounds for reconsideration of the prior order 16 that the only viable challenge to consent in the sign-up process would arise if they experienced the 17 “keypad obstruction.” Epp-Stowers contends she signed up for Uber via her Android smartphone through the 18 19 Uber mobile app. She does not dispute Uber’s records showing that she signed up in April of 20 2014, and she agrees that the “screen shots” presented by Uber are substantially similar to what 21 she saw. She contends, however, she never saw the terms of service hyperlink, and suggests the 22 pop-up keyboard would have obscured it if she in fact signed up through the mobile app. Uber offered evidence that Epps-Stowers signed up through get.uber.com, which it argues 23 24 means she signed up on her desktop, not via her mobile phone. While it apparently would have 25 26 27 1 To the extent that Epps-Stowers and Verklas are relying on the same arguments, they are rejected for the reasons explained in the prior order. 28 CASE NO. 3 16-cv-06652-RS 1 been possible that she used a browser on her phone, rather than the mobile app, Uber’s testimony 2 was that there would be no issue of a pop-up keyboard potentially obscuring the terms of service. 3 Uber further offered testimony that even if Epps-Stowers signed up through m.uber.com, there 4 still would have been no obscuring keyboard on the relevant date. United States District Court Northern District of California 5 At the time of the motion briefing, there was a dispute as to whether Verklas signed up for 6 Uber in 2014 or 2015, with conflicting evidence in the form of some billing records. Uber 7 subsequently presented evidence that Verklas signed up under one email account and phone 8 number in 2014, and another email account and phone number in 2015. Verklas contends he did 9 not “sign up” anew in 2015, but merely purchased a new phone and “updated his Uber account 10 with his new phone number and email address” after the “sales representative transferred his apps 11 from his old phone to the new phone through the cloud.” 12 In November 2016, Uber emailed all its riders. The subject of the email read: “We’ve 13 Updated Our Terms of Use.” The November 2016 email specifically stated that the updates 14 “revise[] our arbitration agreement which explains how legal disputes are handled.” It instructed 15 riders to “read [the Terms of Service] fully,” and provided a colored hyperlink to the Terms, 16 explaining, “you can access [the Terms] here.” Uber alerted riders that “[i]f you use our app or 17 other services on or after that date, you’re confirming you’ve read and agree to the updated 18 Terms.” 19 Uber offered evidence it sent the email to Epps-Stowers on November 16, 2016 and to 20 Verklas on November 19, 2016. There is no dispute that Epps-Stowers and Verklas both used 21 Uber numerous times after the email was sent. Plaintiffs contend, however, that they : 22 23 24 25 26 27 both conducted thorough searches of their email history and have no record of a November 2016 email from Uber. Further, Plaintiffs’ testimony shows that they never saw or opened an email from Uber regarding updates to Uber’s Terms of Service. There is no legal support for the proposition that merely sending an email, with no evidence of receipt and which the recipient was not required to open or read, put Plaintiffs on actual or inquiry notice of Uber’s Terms, to which they have never assented. Further, this case was filed prior to November 2016 and thus, the email could not have provided notice to Plaintiffs of an agreement to arbitrate. 28 CASE NO. 4 16-cv-06652-RS United States District Court Northern District of California 1 III. LEGAL STANDARD 2 Because Uber’s terms of service are “a contract evidencing a transaction involving 3 commerce,” they are subject to the Federal Arbitration Act (“FAA”). 9 U.S.C. § 2; Chiron Corp. 4 v. Ortho Diagnostic Sys., Inc., 207 F.3d 1126, 1130 (9th Cir. 2000). “The FAA provides that any 5 arbitration agreement within its scope ‘shall be valid, irrevocable, and enforceable,’ . . . and 6 permits a party ‘aggrieved by the alleged . . . refusal of another to arbitrate’ to petition any federal 7 district court for an order compelling arbitration in the manner provided for in the agreement.” 8 Chiron, 207 F.3d at 1130 (quoting 9 U.S.C. § 4) (second omission in original). The FAA “leaves 9 no place for the exercise of discretion by a district court, but instead mandates that district courts 10 shall direct the parties to proceed to arbitration on issues as to which an arbitration agreement has 11 been signed.” Dean Witter Reynolds Inc. v. Byrd, 470 U.S. 213, 218 (1985) (citing 9 U.S.C. 12 §§ 3, 4). The role of a district court under the FAA “is therefore limited to determining (1) 13 whether a valid agreement to arbitrate exists and, if it does, (2) whether the agreement 14 encompasses the dispute at issue.” Chiron, 207 F.3d at 1130 (citations omitted). “If the response 15 is affirmative on both counts, then the [FAA] requires the court to enforce the arbitration 16 agreement in accordance with its terms.” Id. 17 IV. DISCUSSION 18 19 20 21 22 23 24 25 26 The original order denying the motion to compel arbitration as to Metter noted critical limits to the decision: This is not to say a litigant, like Metter, can defeat a motion to compel arbitration simply by claiming he never saw the terms of service alert. For instance, arbitration was proper in Cordas, where the plaintiff conclusorily claimed he never saw the terms of service alert, but did not affirmatively identify any particular reason he would not or could not have seen it. [Cordas v. Uber Techs., Inc., 228 F. Supp. 3d 985, 990 (N.D. Cal. 2017)] (“Cordas raises no genuine dispute of any material fact, and it is proper to conclude, as a matter of law, that he was on notice of Uber’s terms and conditions, and assented to them in signing up for Uber.”). 27 28 CASE NO. 5 16-cv-06652-RS Here, plaintiffs have not been limited to making allegations in motion practice, but have 1 2 been heard in an evidentiary proceeding. Although plaintiffs cannot be faulted for lacking the 3 ability to recall the details of their sign up process with precision, and are to be commended for 4 what appears to have been forthright testimony, the preponderance of evidence supports Uber’s 5 contention that neither plaintiff signed up under circumstances implicating the “keypad 6 obstruction” issue. The evidence supports a conclusion that whether Epps-Stowers signed up on a computer or United States District Court Northern District of California 7 8 a phone, she did not do so through the mobile app. Additionally, Uber presented uncontradicted 9 evidence that even the mobile app did not present the keypad obstruction issue at the time Epps- 10 Stowers registered. Her testimony that she does not recall seeing the terms of service link is 11 insufficient. See, infra, “This is not to say a litigant . . . can defeat a motion to compel arbitration 12 simply by claiming [s]he never saw the terms of service alert.” 13 The evidence regarding Verklas likewise supports a conclusion that he adequately 14 expressed consent to the terms of service, including the arbitration provision. First, even assuming 15 Verklas only signed up in 2014, Uber has presented sufficient evidence that the terms of service 16 link would have been displayed to Verklas, without obstruction. Again, his testimony that he does 17 not recall seeing it, however honest, does not support a different result. Furthermore, whether 18 Verklas engaged in a new registration process in 2105 as opposed merely to “updating” his 19 account, Uber’s evidence demonstrates that he consented to the terms of service at that juncture, 20 when there was no issue of keyboard obstruction.2 21 V. CONCLUSION 22 The motion to compel arbitration is granted. The action is hereby stayed pending 23 24 25 26 27 In light of these conclusions, it is unnecessary to reach Uber’s further argument that it can bind its users to arbitration by sending out emails to addresses it has on record, without any further evidence that the users actually received and opened those emails before continuing to utilize Uber’s services. 2 28 CASE NO. 6 16-cv-06652-RS 1 completion of the arbitration proceedings. For administrative purposes, the Clerk is directed to 2 close the file. Any party may move to reopen upon completion of the arbitration or for other good 3 cause shown. 4 5 IT IS SO ORDERED. 6 7 8 9 Dated: July 29, 2019 ______________________________________ RICHARD SEEBORG United States District Judge 10 United States District Court Northern District of California 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CASE NO. 7 16-cv-06652-RS
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