Golightly v. Uber Techs.

Decision Date11 August 2021
Docket Number21-cv-3005 (LJL)
PartiesGOLIGHTLY, on behalf of himself and all others similarly situated, Plaintiffs, v. UBER TECHNOLOGIES, INC., et al. Defendants.
CourtU.S. District Court — Southern District of New York
OPINION AND ORDER

LEWIS J. LIMAN, United States District Judge.

Defendant Uber Technologies, Inc. (Uber), moves to compel individual arbitration and to dismiss the complaint and alternatively to strike Plaintiff's class allegations and to stay proceedings and to stay discovery. Dkt. No. 21, 22.

The underlying complaint contains claims under the federal and state Fair Credit Reporting Acts and the New York City Human Rights Law. Golightly is a Black resident of the Bronx, New York who drove for Uber from 2014 until August 2020. Dkt. No 1 ¶¶ 10-11. He also has been licensed by the New York City Taxi and Limousine Commission (“TLC”) since 2014 as a For-Hire-Vehicle (“FHV”) driver. Id. ¶ 10-12. In 2013, he received a speeding ticket in Virginia that was characterized as a misdemeanor. Id. ¶ 11. In August 2020, Uber discovered the speeding ticket through a background check and, without any notice, process, or further communication, deactivated him from its driving platform, depriving him of the ability to drive for Uber and earn income. Id. ¶¶ 11-12. Golightly argues that Uber's termination of him as a driver constitutes part of an unlawful policy and practice of the company to use criminal history to discriminate against drivers in New York in violation of the protections of the Fair Chance Act incorporated into the New York City Human Rights Law. Id. ¶ 17. He alleges that the unlawful policy also disparately impacts hundreds of Black and Latinx drivers who have disproportionately higher rates of criminal history due to the overcriminalization of communities of color and therefore also violates the disparate impact provisions of the New York City Human Rights Law.[1] Id.

Uber argues that Golightly's claim is subject to arbitration and that the complaint therefore should either be dismissed or proceedings on it stayed pursuant to the Federal Arbitration Act (“FAA”), 9 U.S.C. § 1 et seq.

At the initial pretrial conference in this case, Golightly sought to take limited discovery regarding whether he was subject to the FAA. The Court permitted him to serve discovery requests but permitted Uber to move for a protective order staying discovery in anticipation of a ruling on its motion to compel. The Court also stayed Golightly's time to respond to any motion to compel arbitration pending a ruling on the motion to stay discovery. The issue presently before the Court therefore is narrow: whether Golightly is entitled to limited discovery before the Court rules on Uber's request to remit him to arbitration and to preclude his request for classwide relief.

There is much common ground between the parties on the motion to stay discovery. Neither side disputes, for purposes of the discovery motion, that Golightly's claim is subject to arbitration unless he is one of a class of workers under the “residual clause” of the FAA, 9 U.S.C. § 2. In order to receive the “Drivers App.” and to be able to accept rides through Uber's service, Golightly had to click the “I agree” box twice on a webpage that contained a link to Uber's Platform Access Agreement (the January 2020 PAA). Dkt. No. 22-2 ¶ 10-17, Exs. A, B, C, D. The January 2020 PAA contains an arbitration provision that would cover this dispute. Id. ¶ 18, Ex. D ¶ 14. It also contains a class waiver. Id., Ex. D ¶ 14.4. Golightly failed to avail himself of the option granted by the webpage to opt out of the Arbitration Provision. Id. ¶ 19.

The parties also do not dispute that before Golightly is subjected to the provisions of the FAA, including those permitting a party to move to compel arbitration and requiring a court to stay the litigation, the Court must conclude that he does not fall within an exemption to the FAA. Section 1 of the FAA states that the law does not “apply to contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.” 9 U.S.C. § 1. The last clause is referred to as the “Residual Clause.” The Supreme Court has held that the § 1 exclusion provision [must] be afforded a narrow construction, ” and that it therefore should be read only to exempt from the FAA “contracts of employment of transportation workers.” Circuit City Stores, Inc. v. Adams 532 U.S. 105, 118-19 (2001). At the same time, however, the construction must not be unduly narrow. [O]ften and by design it is ‘hard-fought compromise[ ],' not cold logic, that supplies the solvent needed for a bill to survive the legislative process” and the Court must “respect the limits up to which Congress was prepared” to go when adopting the Arbitration Act and must not go further. New Prime Inc. v. Oliveira, 139 S.Ct. 532, 543 (2019) (first quoting Bd. of Governors FRS v. Dimension Fin. Corp., 474 U.S. 361, 374 (1986) then quoting United States v. Sisson, 399 U.S. 267, 298 (1970)). The Section 1 “exemption” “is not limited to classes of workers who transport goods in interstate commerce, ” but also “extend[s] to the transportation of passengers as well as physical goods.” Osvatics v. Lyft, Inc., 2021 WL 1601114, at *9 (D.D.C. 2021) (quoting Rogers v. Lyft, 452 F.Supp.3d 904, 914 (N.D. Cal. 2020), and citing Singh v. Uber Techs., Inc., 939 F.3d 210, 219-26 (3d Cir. 2019)).

This Court must “decide for itself whether § 1's ‘contracts of employment' exclusion applies before ordering arbitration. After all, to invoke its statutory powers under §§ 3 and 4 to stay litigation and compel arbitration according to a contract's terms, a court must first know whether the contract itself falls within or beyond the boundaries of §§ 1 and 2.” New Prime Inc., 139 S.Ct. at 537.

The Court has discretion under Rule 26(c) to stay discovery pending decision on a motion to dismiss if the moving party demonstrates good cause. See Ema Financial, LLC v Vystar Corp, 336 F.R.D. 75, 79 (S.D.N.Y. 2020); Hong Leong Fin. Ltd. (Singapore) v. Pinnacle Performance Ltd., 297 F.R.D. 69, 72 (S.D.N.Y. 2013). “Counts consider: (1) the breadth of discovery sought, (2) any prejudice that would result, and (3) the strength of the motion.' Cambridge Capital LLC v. Ruby Has LLC, 2021 WL 2413320 (S.D.N.Y. June 10, 2021) (quoting Hong Leong, 297 F.R.D. at 72); see also Ema Financial, 226 F.R.D. at 79 (quoting Hong Leong, 297 F.R.D. at 72).

In addition, the Court applies the standard on a motion to compel arbitration that it applies on a motion for summary judgment. When deciding on a motion to compel arbitration under the FAA, the court adopts “a standard similar to that applicable for a motion for summary judgment and requires courts to “consider[] all relevant, admissible evidence submitted by the parties and contained in pleadings, depositions, answers to interrogatories, and admissions on file, together with . . . affidavits.” Meyer v. Uber Techs., Inc., 868 F.3d 66, 74 (2d Cir. 2017) (first quoting Nicosia v. Amazon.com, Inc., 834 F.3d 220, 229 (2d Cir. 2016), then quoting Chambers v. Time Warner, Inc., 282 F.3d 147, 155 (2d Cir. 2002)) (internal quotation marks and citations omitted); see also Soliman v. Subway Franchisee Advert. Fund Trust, Ltd., 999 F.3d 828, 833-34 (2d Cir. 2021) (same); Bensadoun v. Jobe-Riat, 316 F.3d 171, 175 (2d Cir. 2003) ([T]he summary judgment standard is appropriate in cases where the District Court is required to determine arbitrability.”).[2]

The parties further do not dispute that the courts are divided on whether Uber and Lyft drivers fall within the residual clause. Compare Islam v. Lyft, Inc., 2021 WL 871417, at *8-9 (S.D.N.Y. Mar. 9, 2021) (holding that Lyft drivers fall within the exemption); Haider v. Lyft, Inc., 2021 WL 1226442, at *3 (S.D.N.Y. Mar 31, 2021) (same); Rogers, 452 F.Supp.3d 904, 916 (same), with Capriole v. Uber Techs., Inc., 2021 WL 3282092, at *6 (9th Cir. Aug. 2, 2021) (holding that Uber drivers do not fall within the residual clause); Osvatics v. Lyft, Inc., 2021 WL 1601114, at *8-9 (D.D.C. Apr. 22, 2021) (same with respect to Lyft drivers); Aleksanian v. Uber Techs, Inc., 2021 WL 860127, at *9 (S.D.N.Y. Mar. 8, 2021) (same with respect to Uber drivers).[3] There is no Second Circuit precedent directly on point. Golightly has not had the opportunity to present evidence on the issue.

The Court finds persuasive the Third Circuit's opinion in Singh v. Uber Techs Inc., 939 F.3d 210 (3d Cir. 2019). There, the district court rejected plaintiff's motion for discovery and held that Uber drivers categorically did not fall within the “residual clause” as a matter of law. Id. at 218. The district court reached that conclusion based on the erroneous legal proposition that the exemption for transportation workers applied only to those who transported goods and not those who transported passengers. Id. at 217. The Third Circuit started with its precedent regarding the two possible standards under which a motion to compel arbitration could be decided: on a motion to dismiss “where the existence of a valid agreement to arbitrate between the parties is apparent from the face of the complaint or incorporated documents, ” or on a summary judgment standard “if the complaint and its supporting documents are unclear . . . or if the plaintiff has responded to a motion to compel arbitration with additional facts sufficient to place the agreement” in dispute.” Id. at 216 (quoting Guidotti v. Legal Helpers Debt Resol L.L.C., 716 F.3d 764, 774-75 (3d Cir. 2013)) (emphasis and internal quotation marks omitted). Where a party's right to arbitrate cannot be determined from the face of the complaint or documents incorporated therein, “restricted...

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