A federal judge has tossed half the lawsuits brought over a data breach of Uber after finding that riders were aware they signed arbitration agreements when they registered to use the app.
U.S. District Judge Philip Gutierrez, who is overseeing all the consumer class actions brought in the Central District of California over a 2017 breach of the company, also rescheduled a hearing this week for Oct. 1 to determine which plaintiffs lawyers would lead the significantly pared-down litigation.
Uber Technologies Inc. filed motions to compel arbitration in half the class actions filed over the breach, which compromised the personal information of 57 million drivers and riders. On Sept. 5, Gutierrez granted those motions in separate orders in seven of the cases. Seven other cases remain.
In granting the arbitration motions, Gutierrez relied heavily on the U.S. Court of Appeals for the Second Circuit’s decision last year in Meyer v. Uber, which found that a “reasonable user” of a smartphone would understand the process of agreeing to Uber’s terms of service.
“The basis of that decision is that arbitration clauses are so ubiquitous that a reasonable consumer would assume they were signing one when they sign a contract,” said Eric Artrip of Mastando & Artrip in Huntsville, Alabama, who filed a motion for a leadership appointment in the cases. “Naturally, the plaintiffs disagree with that holding and reasoning. Just merely because you’re using a company’s goods and services does not mean automatically you’re shoved into arbitration, no matter the terms or the conditions of your approval of that arbitration agreement or the circumstances surrounding that transaction.”
Uber spokeswoman Melanie Ensign declined to comment. Uber’s lawyer was Desmond Hogan, a partner at Hogan Lovells in Washington, D.C.
Gutierrez originally had scheduled motions for lead counsel appointments for Tuesday. Ben Barnow of Chicago’s Barnow & Associates and Tina Wolfson of Los Angeles-based Ahdoot & Wolfson filed a motion for co-lead counsel, while Wilshire Law Firm’s Bobby Saadian in Los Angeles and Tom Girardi of Los Angeles-based Girardi Keese filed a competing motion. But Gutierrez now has tossed out Barnow’s case and the case filed by Saadian and Girardi.
“The issue is: Are we going to have an MDL after this whole process is over with, or not?” said Artrip, whose case remains in place. He noted, however, that all the cases are nationwide class actions that could go forward as a consolidated complaint but that plaintiffs lawyers are debating about who should lead that action.
“There are conversations occurring regarding just that scenario—where plaintiff’s counsel look around at who’s left and figure out a good game plan going forward,” he said.
In November 2017, Uber announced that hackers had breached its app 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.
The cases before Gutierrez are all in federal court. On April 4, the U.S. Judicial Panel on Multidistrict Litigation sent all the class actions to Gutierrez, whose first action was to decide Uber’s arbitration motions.
Gutierrez was not persuaded by plaintiffs lawyers who argued that data breaches fell outside the scope of Uber’s agreement. He instead found that an arbitrator must decide that issue. He cited the U.S. Court of Appeals for the Ninth Circuit’s 2016 decision in Mohammed v. Uber Techs., which had a “nearly identical Uber delegation provision.”
In some cases, he rejected arguments that Uber’s arbitration agreement was inconspicuous. Plaintiffs had cited the June 25 decision by the U.S. Court of Appeals for the First Circuit in Cullinane v. Uber and U.S. District Judge Richard Seeborg’s decision last year in Metter v. Uber Techs. Those cases found Uber’s arbitration agreement unconscionable because a pop-up keyboard obscured text about the registration process or the colors—a gray box with black background—made it unclear. But Gutierrez found that those cases, unlike the Second Circuit’s Meyer case, involved different devices or different versions of Uber’s app.
“The court agrees with defendants that the Cullinane decision departs dramatically both from what other courts have found regarding Uber’s registration process, and from the overall legal landscape regarding assent to online agreements,” he wrote in one case. “Clickable buttons come in all shapes and sizes.”
As to the remaining cases, Artrip said he wasn’t sure why Uber didn’t file motions to compel arbitration. Some users might have opted out of the agreement, he said.
“We are pretty hopeful that Uber has something in its file that indicates the seven cases are not appropriate for arbitration because they didn’t sign it, or they opted out,” he said. “They must have some reason they didn’t do it, and we’re hopeful those facts come to light at some point.”