Rakoff Sends Uber Suit to Arbitration, but First Sounds Off on Why the Law Is Wrong

Manhattan Federal Judge Jed Rakoff fiercely criticized the U.S. Court of Appeals for the Second Circuit, and the federal judiciary as a whole, for repeatedly upholding U.S. companies' use of mandatory arbitration clauses that consumers sign on to via internet-based customer agreements that appear on screens.

March 08, 2018 at 08:05 PM

7 minute read

The original version of this story was published on New York Law Journal

U.S. District Judge Jed Rakoff. Photo Credit: Rick Kopstein/ALM

New York-based federal judge Jed Rakoff has sent a major antitrust price-fixing lawsuit against Uber Technologies Inc. into arbitration, albeit reluctantly, and dismissed the case from court.

But not before first devoting pages of his opinion in Meyer v. Kalanick, 15-cv-9796, to fiercely criticizing the U.S. Court of Appeals for the Second Circuit, and the federal judiciary as a whole, for repeatedly upholding U.S. companies' use of mandatory arbitration clauses that consumers assent to via internet-based customer agreements that appear on screens. Rakoff said such terms of service agreements “totally coerce” the consumer into waiving his or her constitutional right to a jury trial.

In two and a half pages of dictum that open the opinion, Rakoff, a senior judge in the U.S. District Court for the Southern District of New York, spares no niceties. He makes clear that he thinks the federal judiciary has gotten an important constitutional issue wrong for years, and that the law must change.

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