Uber Can’t Compel Arbitration of Class Action

SAN FRANCISCO (CN) — Denying Uber’s motion to compel arbitration of phony cancellation fees it charges riders, a federal judge called the company’s notice process of waiving the right to sue “deficient.”

U.S. District Judge Richard Seeborg found Monday that lead plaintiff Julian Metter showed he never agreed to Uber’s terms of service and its arbitration agreement, because the terms of service alert was blocked by the keypad on Metter's smartphone.

“Although the terms of service alert seems designed to put a registrant on inquiry notice of Uber’s terms of service and to alert the registrant that registration will amount to affirmative assent to those terms, the keypad obstruction is a fatal defect to the alert’s functioning,” Seeborg wrote in a 13-page order. “That defect turns what would be a sufficient notice process into a deficient one.”

Metter sued in November 2016 on behalf of a proposed class of Uber riders, claiming the company doesn’t tell riders it might charge a cancellation fee.

Uber sought to compel arbitration, claiming Metter agreed to its terms of service and waived his right to sue when he registered his account.

Metter replied that a pop-up keypad prompting him to enter his credit card information obstructed the terms of service alert.

Uber countered that Metter would have seen the alert had he scrolled to the bottom of the screen.

Seeborg didn’t buy that argument, noting that Uber “never explains why Metter would have scrolled down to find a terms of service alert he was not otherwise aware of, especially when the registration and payment screen neither instructed him to scroll down nor presented any reason for him to do so.”

“Uber's assertions ... are not sufficient to obviate any dispute of fact as to whether Metter was on notice of Uber’s terms of service and thereby assented to them,” Seeborg wrote. “Metter's declaration that he never saw the terms of service alert is credible and consistent with the functioning of the Uber app.”

Metter's attorney Glenn Danas, of Capstone Law in Los Angeles, said in an email Tuesday that he is pleased with the ruling.

"We look forward to litigating our client's claims in court," he added.

Seeborg's ruling contrasts with a ruling he issued in January in a similar case, Michael Cordas v. Uber Technologies, Inc., which claimed that users had their rides automatically canceled and were charged cancellation fees for them.

Michael Cordas, the lead plaintiff, also claimed he never saw the terms of service alert when he signed up for Uber. But Seeborg took issue with Cordas’ failure to identify a reason why he hadn’t seen it and granted Uber’s motion to force arbitration, finding the company's notice process sufficient.

Uber is represented by William Stern with Morrison & Foerster in San Francisco, who did not return a request for comment late Monday.

An Uber representative declined to comment.

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