O'Connor v. Uber Techs., Inc.
| Decision Date | 25 September 2018 |
| Docket Number | No. 16-15035,Nos. 15-17422,15-17532,No. 15-17475, No. 16-15000,No. 14-16078,Nos. 15-17420, No. 16-15001, No. 16-15595,15-17534, No. 15-17533,14-16078,s. 15-17420,s. 15-17422,15-17475 |
| Citation | 904 F.3d 1087 |
| Parties | Douglas O'CONNOR ; Thomas Colopy ; David Khan ; Matthew Manahan; Wilson Rolle, Jr.; William Anderson, individually and on behalf of all others similarly situated, Plaintiffs-Appellees, v. UBER TECHNOLOGIES, INC., Defendant-Appellant. Douglas O'Connor ; Thomas Colopy ; Matthew Manahan; Elie Gurfinkel, individually and on behalf of all others similarly situated, Plaintiffs-Appellees, v. Uber Technologies, Inc., Defendant-Appellant. Hakan Yucesoy, on behalf of himself and all others similarly situated, Plaintiff-Appellee, v. Uber Technologies, Inc., Defendant-Appellant. Ricardo Del Rio ; Tony Mehrdad Saghebian, individually and on behalf of all others similarly situated, Plaintiffs-Appellees, v. Uber Technologies, Inc.; Rasier-CA, LLC, a Delaware Limited Liability Company, Defendants-Appellants. Abdul Kadir Mohamed, individually and on behalf of all others similarly situated, Plaintiff-Appellee, v. Uber Technologies, Inc., Defendant-Appellant, and Rasier, LLC; Hirease, LLC, Defendants. Douglas O'Connor ; Thomas Colopy ; Matthew Manahan; Elie Gurfinkel, individually and on behalf of all others similarly situated, Plaintiffs-Appellants, v. Uber Technologies, Inc., Defendant-Appellee. Hakan Yucesoy, on behalf of himself and others similarly situated, Plaintiff-Appellant, v. Uber Technologies, Inc., Defendant-Appellee. Abdul Kadir Mohamed, individually and on behalf of all others similarly situated; Ronald Gillette; Shannon Wise; Brandon Farmer ; Meghan Christenson, Plaintiffs-Appellants, v. Uber Technologies, Inc., Defendant-Appellee. Douglas O'Connor ; Thomas Colopy ; Matthew Manahan; Elie Gurfinkel, individually and on behalf of all others similarly situated, Plaintiffs-Appellees, v. Uber Technologies, Inc., Defendant-Appellant. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Theodore J. Boutrous Jr. (argued), Theane D. Evangelis, and Kevin J. Ring-Dowell, Gibson Dunn & Crutcher LLP, Los Angeles, California; Joshua S. Lipshutz, Gibson Dunn & Crutcher LLP, San Francisco, California; for Defendants-Appellants.
Shannon Liss-Riordan (argued) and Adelaide H. Pagano, Lichten & Liss-Riordan P.C., Boston, Massachusetts, for Plaintiffs-Appellees.
Jeffery Burritt (argued), Attorney; Kira Dellinger Vol, Supervisory Attorney; Linda Dreeben, Deputy Associate General Counsel; John H. Ferguson, Associate General Counsel; Jennifer Abruzzo, Deputy General Counsel; Richard F. Griffin Jr., General Counsel; National Labor Relations Board, Washington, D.C.; for Amicus Curiae National Labor Relations Board.
Andrew J. Pincus, Evan M. Tager, and Archis A. Parasharami, Mayer Brown LLP, Washington, D.C.; Jed Glickstein, Mayer Brown LLP, Chicago, Illinois; Kate Comerford Todd and Warren Postman, U.S. Chamber Litigation Center Inc., Washington, D.C.; for Amicus Curiae Chamber of Commerce of the United States of America.
Before: Richard C. Tallman, Richard R. Clifton, and Sandra S. Ikuta, Circuit Judges.
Current and former Uber drivers filed several putative class actions alleging on behalf of themselves and other drivers that Uber Technologies, Inc. and related defendants (collectively referred to as "Uber"), violated various federal and state statutes by, among other things, misclassifying drivers as independent contractors rather than employees. Multiple cases were consolidated for appeal to this court.1 Uber appeals the district court's orders denying Uber's motions to compel arbitration, orders granting class certification in O'Connor , and orders controlling class communications pursuant to Federal Rule of Civil Procedure 23(d).
We previously considered and reversed the district court's orders denying Uber's motions to compel arbitration in Mohamed v. Uber Technologies, Inc. , 848 F.3d 1201, 1206 (9th Cir. 2016). Plaintiffs offer additional arguments in the current appeal why the arbitration agreements are unenforceable, but those arguments are unpersuasive. As the class certification by the district court was premised on the district court's determination that the arbitration agreements were unenforceable, the class certification must also be reversed. The Rule 23(d) orders were based on the district court's denial of the motions to compel arbitration and its granting of class certification. As both of those decisions must be reversed, there is no longer a basis for the district court's restrictions on Uber's communication with class and putative class members, so these orders are moot and must be reversed as well.
Two Uber drivers filed a putative class action complaint against Uber on August 16, 2013, initiating the O'Connor action. It alleged claims for failure to remit the entire gratuity paid by customers to drivers in violation of California Labor Code § 351 ("Tips Claim"), and for misclassifying the drivers as independent contractors and failing to pay their business expenses (including vehicles, gas, and maintenance) in violation of California Labor Code § 2802 ("Expense Reimbursement Claim").
Within a week of filing suit, the O'Connor Plaintiffs filed a motion under Rule 23(d) requesting that the district court declare the 2013 arbitration agreement unconscionable, or, in the alternative, requiring Uber to provide enhanced notice and opportunities for the drivers to opt out of arbitration. On December 6, 2013, the district court granted the O'Connor Plaintiffs' alternative request, enjoined Uber from enforcing its arbitration agreement against those drivers who entered into the agreement but did not opt out, required Uber to revise the agreement to include enhanced notice provisions, and directed Uber to extend the opt out period for an additional thirty days once the revised agreements were distributed. Uber's updated licensing agreement was issued on June 21, 2014. Uber also sent licensing agreements in November 2014 and April 2015 that were materially identical to the June 2014 agreement (collectively "2014 arbitration agreement").
Plaintiff Mohamed filed a putative class action complaint against Uber and Hirease, LLC, an independent company that conducts background checks, on November 24, 2014, asserting various federal and California state law claims. We have already provided background on that case in our decision in Mohamed , 848 F.3d at 1206–07. Here it is sufficient to note that the district court denied Uber's motion to compel arbitration pursuant to its 2013 and 2014 arbitration agreements, holding, among other things, that the arbitration provisions were unenforceable because they were unconscionable. Based on the same reasoning, the district court also denied Uber's motions to compel arbitration in Yucesoy , Del Rio , and O'Connor .
In April 2015, the O'Connor Plaintiffs moved for certification of a class of approximately 160,000 individuals who had driven for Uber in the state of California at any time since August 16, 2009. The district court granted class certification in part in an order filed on September 1, 2015, certifying the following class for the Plaintiffs' Tips Claim:
All UberBlack, UberX, and UberSUV drivers who have driven for Uber in the state of California at any time since August 16, 2009, and who (1) signed up to drive directly with Uber or an Uber subsidiary under their individual name, and (2) are/were paid by Uber or an Uber subsidiary directly and in their individual name, and (3) did not electronically accept any contract with Uber or one of Uber's subsidiaries which contain the notice and opt-out provisions previously ordered by this Court (including those contracts listed in the Appendix to this Order), unless the driver timely opted-out of that contract's arbitration agreement.
The district court excluded drivers who worked for a distinct third-party transportation company, or who contracted or were paid under corporate or fictitious names, out of concern that individualized issues would predominate if they were included. The district court, in addition, excluded any drivers who signed the Uber contracts that included enhanced notice and opt-out provisions previously ordered by the district court, unless the driver timely opted-out of the arbitration agreement. The district court declined to certify the O'Connor Plaintiffs' Expense Reimbursement Claim at that time because it was uncertain whether the O'Connor Plaintiffs could determine whether a particular expense was "necessary" on a classwide basis.
In response to a supplemental motion for class certification by the O'Connor Plaintiffs, the district court, on December 9, 2015, certified an additional subclass of Uber drivers including those who accepted arbitration agreements in 2014 and 2015:
All UberBlack, UberX, and UberSUV drivers who have driven for Uber in the state of California at any time since August 16, 2009, and meet all the following requirements: (1) who signed up to drive directly with Uber or an Uber subsidiary under their individual name, and (2) are/were paid by Uber or an Uber subsidiary directly and in their individual name, and (3) electronically accepted any contract with Uber or one of Uber's subsidiaries which contain the notice and opt-out provisions previously ordered by this Court, and did not timely opt out of that contract's arbitration agreement.
In the same order the district court also certified the original class and subclass to pursue the Expense Reimbursement Claim based on the O'Connor Plaintiffs' proposal to rely on the Internal Revenue Service's mileage reimbursement rate, which approximates a driver's necessary business expenses.
Uber issued a new arbitration agreement to all of its drivers on December 11, 2015. Plaintiffs in O'Connor , Mohamed , and Yucesoy filed separate motions to enjoin Uber from...
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