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Uber Wins a Trip to Arbitration
Monday, November 4, 2019

Last Tuesday, the District Court for the Southern District of California ordered a TCPA case involving Uber Technologies (“Uber”) to arbitration and issued a stay pending the outcome of the arbitration.

In Leusch v. Uber Techs., Inc., No. 3:19-CV-00772-L-JLB, 2019 U.S. Dist. LEXIS 188372, at *1 (S.D. Cal. Oct. 29, 2019), the Plaintiff was a user of Uber’s ride-sharing service.  However, at issue in this case are calls the Plaintiff began receiving regarding Uber’s other application, “Uber Eats,” which enables users to order food from local restaurants and have it delivered to them.  Plaintiff was not a user of the Uber Eats application.

The phone calls that Plaintiff received include a pre-recorded message that stated:

Hi. This call is from Uber Eats. Your restaurant is receiving an order request, but it hasn’t been accepted. The
order can be accepted by clicking the blinking section on the ipad [sic]. If you are not ready to accept
orders right now, please change the status from accepting orders to pause orders. For any issues, please
contact our support team. Thank you.

The problems with these calls were that (1) Plaintiff did not own or operate a restaurant and (2) he had no interest in receiving the call.  Plaintiff contacted Uber at least three times to try to have these calls stop, but he was unsuccessful.  As a result, Plaintiff did what many folks are doing these days when they continue to receive unwanted calls – he sued Uber for alleged TCPA violations.

Shortly after filing suit, Plaintiff also filed for a preliminary injunction because he was still receiving calls from Uber.  Uber filed a motion to compel the case to arbitration and to stay the proceedings in federal court pending the outcome of the arbitration process. 

Under the Federal Arbitration Act (“FAA”), a court must consider two threshold questions to determine whether to compel arbitration: (1) is there a valid agreement to arbitrate? If so, (2) does the agreement cover the matter in dispute?  If the answer to both questions is “yes,” then the Federal Arbitration Act requires the district court to enforce the arbitration agreement in accordance with its terms. But, these two questions can be expressly delegated to the arbitrator “where the parties clearly and unmistakably provide otherwise” such as in an arbitration agreement. Leusch, 2019 U.S. Dist., at *4. 

Here, the key issue was whether Plaintiff agreed to arbitrate the issue of arbitrability.  After reviewing the arbitration agreement, the court determined that he did.  Specifically, the court looked at the language of the arbitration agreement, which stated:

The parties agree that the arbitrator (“Arbitrator”), and not any federal, state, or local court or agency,
shall have exclusive authority to resolve any disputes relating to the interpretation, applicability,
enforceability or formation of this Arbitration Agreement, including any claim that all or any part
of this Arbitration Agreement is void or voidable. The Arbitrator shall also be responsible for determining
all threshold arbitrability issues, including issues relating to whether the terms are unconscionable or
illusory and any defense to arbitration, including waiver, delay, laches, or estoppel.

The court determined that the language in the arbitration provision clearly and unmistakably delegated to the arbitrator the authority to decide the threshold question of arbitrability.  Further, Plaintiff failed to oppose the validity of the delegation provision in his opposition to Uber’s motion to compel.  So, the court concluded that it had to treat the provision as valid and enforce it pursuant to the FAA, which resulted in its ultimate decision to grant Uber’s motion to compel arbitration and stay the case.  This case serves as another reminder of the potential value of having binding terms and conditions that include mandatory arbitration provisions.

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