Like many law departments at companies disrupting conventional business models, Lyft Inc.’s in-house team faces challenges in the context of rapid company growth and legal frameworks that may not have originally contemplated the ride-sharing business.
To help deal with legal and regulatory obstacles, the San Francisco company’s in-house litigation team has adopted several strategies, including nimble and thoughtful approaches to the use of arbitration agreements and motion practice.
As the fourth lawyer in Lyft’s legal department back in 2014, Lindsay Llewellyn, associate general counsel at the company and head of its litigation team, has experienced more than a few changes. To match the company’s growth, for one, the number of attorneys in the legal department has grown to the more than 20, Llewellyn said.
The litigation portfolio has also “changed drastically,” she said, because when she joined the company, enforcers were pushing to apply more traditional taxi regulations to Lyft and other transportation network companies. As most states now have comprehensive ride-sharing regulations, “the atmosphere is just very different,” she said.
These days, the litigation team focuses, in part, on enforceability of Lyft’s class action waiver and arbitration agreement, Llewellyn said. “It’s simply not enough to know what the law was, you know, in California last year, because it’s just constantly being litigated and changing,” she noted. “What we’ve tried to do is really be proactive on this issue…in being responsible for keeping up with all of the latest trends and all the changes in the law.”
But it’s not just the litigation team thinking about arbitration and class action waivers, Llewellyn said, as they collaborate on these issues with the commercial and employment teams at Lyft.
And this approach has worked. “We’ve had success in a number of different types of matters where we have decided to move to compel individual arbitration,” she said, explaining that this has ranged from a passenger-facing consumer class action in a California state court to a case brought on behalf of both drivers and passengers in federal court.
“From our view, our success in compelling arbitration is…always a very individualized analysis, because the underlying facts of every case are different,” she said. “We don’t view this issue as one that we’ve done before, that’s just sort of a cut-and-paste job.”
Of course, arbitration is not always an option. A consumer-facing business growing as quickly as Lyft is something of “a natural target for litigation,” according to Llewellyn, which makes early case strategy another priority for her team. “When a new case comes through the door, one of the first things we consider when we’re doing our factual investigation is whether we believe there’s actually a good-faith basis for the claim … and if not, what methods can we take advantage of” to try to convince plaintiffs’ counsel to voluntarily dismiss the case, she noted.
It’s often the right move to make use of motion practice, Llewellyn said, but not always. “We try to think really carefully about whether it makes sense in the long-term to engage in repeated motions to dismiss or demurrers, because I think it can be a bit of a knee-jerk reaction as soon as a case is filed to move to dismiss and do that repeatedly,” she said.
Llewellyn added: “On all fronts…I think the company’s strategy is more to engage in thoughtful negotiation and to try to compromise and reach resolution rather than fighting just to fight, or filing a motion just to file it.”