First Circuit Rules Uber Can’t Force Class Action into Arbitration

BOSTON (CN) – Uber’s user policy requiring disputes be settled in arbitration was too difficult to access, the First Circuit ruled Monday.

Although the company makes it clear in its terms of service that all disputes with users go to arbitration, the company failed to make those terms easily accessible, the Boston-based federal appeals court found.

“The notice simply did not have any distinguishable feature that would set it apart from all the other terms surrounding it,” U.S. Circuit Judge Juan Torruella wrote for a three-person panel.

The link to the terms appeared in Uber’s app on pages dedicated to setting up payment options by linking your account to credit card, but the link’s font color was similar to the dark gray background on the page whereas other links on the same page were brighter and more noticeable.

“Because both the ‘Link Card’ and ‘Link Payment’ screens were filled with other very noticeable terms that diminished the conspicuousness of the ‘Terms of Service & Privacy Policy’ hyperlink and the notice, we find that the terms of the agreement were not reasonably communicated to the alaintiffs,” the 25-page opinion states. “As such, Uber’s motion to compel arbitration fails.”

Rachel Cullinane, Jacqueline Nunez, Elizabeth Schaul and Ross McDonagh are pursuing a class action against the ride-hail company after they were charged additional fees for rides that went through toll booths and at airports.

In order for livery companies, as well as Uber, to be allowed to pick up passengers at Boston’s airport, the state charges a $3.25 fee per ride. Uber was passing that surcharge onto its customers with an $8.75 fee.

Cullinane and Nunez originally sued Uber four years ago in Suffolk Superior Court, but Uber had the case removed to the U.S. District Court in Massachusetts where it filed a successful motion to compel arbitration.

Torruella reversed the order that allowed arbitration and remanded the case back to federal court. He was joined on the panel by U.S. Circuit Judges O. Rogeriee Thompson and William Kayatta Jr.

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