Risk Management

Appeals court rules against Uber on arbitration

Judy Greenwald

June 28, 2018 Reprints

Coverage Disputes Risk Management More + Less -

Appeals court rules against Uber on arbitration

A federal appeals court has overturned a lower court ruling and held that Uber Technologies Inc. cannot compel plaintiffs in a putative class action suit to arbitrate their claims because the arbitration agreement provided during its registration process was inconspicuous.

Plaintiffs had filed suit in state court stating San Francisco-based Uber charged them for certain fictitious or inflated fees following trips they had taken with the service, including a “Massport Surcharge” and East Boston toll, according to Monday’s ruling by the 1st U.S. Circuit Court of Appeals in Boston in Rachel Cullinane et al. v. Uber Technologies Inc.

Uber transferred the case to U.S. District Court in Boston and filed a motion to compel arbitration and stay or dismiss the case. The District Court granted Uber’s motion to compel arbitration and dismissed the complaint, which a three-judge appeals court panel unanimously overturned.

A “dispute resolution” section was included in Uber’s 10 pages of terms and conditions, which were available to Uber App users during the registration process via hyperlink, said the ruling.

The hyperlink to the arbitration agreement, however, “was not conspicuous. Even though the hyperlink did possess some of the characteristics that make a term conspicuous, the presence of other terms on the same screen with a similar or larger size, typeface and with more noticeable attributes diminished the hyperlink’s capability to grab the user’s attention,” the ruling said.

“If everything on the screen is written with conspicuous features, then nothing is conspicuous,” said the ruling, in reversing the District Court’s grant of Uber’s motion to compel arbitration and remanding the case for further proceedings.

A federal appeals court affirmed a lower court ruling last week and held the terminated former vice president of claims field operations for a Chubb Corp. unit, who has filed whistleblower litigation against the insurer, must submit to arbitration.