Islam v. Lyft, Inc.

• Decision Date: 09 March 2021
• Docket Number: 20-CV-3004 (RA)
• Citation: 524 F.Supp.3d 338
• Parties: MD ISLAM, on behalf of himself and those similarly situated, Plaintiff, v. LYFT, INC., Defendant.
• Court: U.S. District Court — Southern District of New York

524 F.Supp.3d 338

MD ISLAM, on behalf of himself and those similarly situated, Plaintiff,

v.LYFT, INC., Defendant.

20-CV-3004 (RA)

United States District Court, S.D. New York.

Signed March 9, 2021

Ria Julien, Jeanne Ellen Mirer, Mirer Mazzocchi & Julien, PLLC, New York, NY, Zubin Daniel Soleimany, New York Taxi Workers Alliance, Long Island City, NY, for Plaintiff.

Matthew D. Ingber, Mayer Brown LLP, New York, NY, Archis Ashok Parasharami, Mayer Brown LLP, Washington, DC, for Defendant.

OPINION AND ORDER

RONNIE ABRAMS, United States District Judge:

Plaintiff MD Islam, a New York City-based driver for the ridesharing company Lyft, brought this putative class action suit challenging Lyft's practice of logging its drivers off of the Lyft app for performing too few rides. See Dkt. 1 ("Compl."). Plaintiff alleges that this practice violates the contract between Lyft and its drivers, which "specifically provide[s] that drivers shall have no limitations on their ability of where and when to access the Lyft app." Id. ¶ 15. That same driver agreement, however, contains a clause requiring Plaintiff to arbitrate his disputes with Lyft on an individual basis. Lyft accordingly moves to compel Plaintiff to proceed to that arbitration, arguing that both the Federal Arbitration Act ("FAA"), 9 U.S.C. § 1 et seq. , and New York law require the Court to enforce the arbitration clause according to its terms. See Dkts. 11–13.

Plaintiff opposes the motion on the ground that the FAA is inapplicable, as Section One of the FAA excludes from the Act's purview "contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce. " 9 U.S.C. § 1 (emphasis added). Plaintiff argues that as a driver for Lyft, he belongs to such a class of workers, in that Lyft drivers regularly ferry passengers across state lines and also transport people on the local portions of their interstate journeys by taking them to and from airports, train stations, and other hubs of interstate travel. Plaintiff also argues that if the FAA is held not to apply, state law does not in this case furnish an alternate basis to compel arbitration. Plaintiff separately moves for discovery going to the interstate nature of Lyft drivers’ work, see Dkt. 29, which Lyft opposes.

For the following reasons, the Court agrees with Plaintiff that, on the basis of information already in the record, he belongs to a class of workers engaged in interstate commerce, and therefore that the FAA does not apply to his contract. The Court finds, however, that state law provides an alternate basis to compel arbitration. Accordingly, Lyft's motion to compel arbitration and stay this litigation is granted, and Plaintiff's motion for discovery to aid in the Court's Section One analysis is denied as moot.

BACKGROUND

Plaintiff filed this putative class-action lawsuit against Lyft in April 2020, alleging that Lyft has adopted an "unlawful practice, in violation of the driver agreement, of forcibly logging off Lyft drivers from the Lyft app if they perform fewer than 100, or 180 rides in a 30-day period." See Compl. at 1. The driver agreement, however, unmistakably contains an arbitration clause—"governed by the Federal Arbitration Act" and covering "all disputes and claims between" drivers and Lyft "arising out of or relating to" Lyft's terms of service, the Lyft Platform, or the driver's relationship with Lyft. See Dkt. 13-1 at 20–21. The agreement provides, in part, as follows:

17. DISPUTE RESOLUTION AND ARBITRATION AGREEMENT

(a) Agreement to Binding Arbitration Between You and Lyft

YOU AND LYFT MUTUALLY AGREE TO WAIVE OUR RESPECTIVE RIGHTS TO RESOLUTION OF DISPUTES IN A COURT OF LAW BY A JUDGE OR JURY AND AGREE TO RESOLVE ANY DISPUTE BY ARBITRATION, as set forth below.... ANY ARBITRATION UNDER THIS AGREEMENT WILL TAKE PLACE ON AN INDIVIDUAL BASIS; CLASS ARBITRATIONS AND CLASS ACTIONS ARE NOT PERMITTED. Except as expressly provided below, this Arbitration Agreement applies to all Claims ... between you and Lyft.... Except as expressly provided below, ALL DISPUTES AND CLAIMS BETWEEN US ... SHALL BE EXCLUSIVELY RESOLVED BY BINDING ARBITRATION SOLELY BETWEEN YOU AND LYFT.

Id. Plaintiff concedes that he did not opt out of this arbitration clause. See Compl. ¶¶ 23, 29, 105. He also does not dispute the facial validity of the arbitration clause, nor the fact that his breach-of-contract claim against Lyft falls within the scope of it. Plaintiff nonetheless argues that he cannot be compelled to arbitrate under the FAA, in that his contract falls under the residual category of 9 U.S.C. § 1, i.e. , that he is part of a "class of workers engaged in ... interstate commerce." Before discussing the factual background bearing on whether Plaintiff is part of such a class of workers, the Court reviews the statutory framework in which this issue arises.

I. The FAA's Section One Exemption

Section Two of the FAA—the "primary substantive provision of the Act," Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp. , 460 U.S. 1, 24, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983) —declares that an arbitration clause in any "contract evidencing a transaction involving commerce ... shall be valid, irrevocable, and enforceable." 9 U.S.C. § 2. This provision embodies a "liberal federal policy favoring arbitration," Moses H. Cone , 460 U.S. at 24, 103 S.Ct. 927, and it requires federal courts to "place arbitration agreements on an equal footing with other contracts ... and enforce them according to their terms." AT & T Mobility LLC v. Concepcion , 563 U.S. 333, 339, 131 S.Ct. 1740, 179 L.Ed.2d 742 (2011) (internal citations omitted). Section One of the Act, however, carves out an exemption: "Nothing" in the FAA "shall 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. This exception specifically enumerates two classes of exempt workers who cannot be compelled to arbitrate under the FAA – maritime and railroad employees – while including the "residual category" of classes of workers engaged in foreign or interstate commerce. See Wallace v. Grubhub Holdings , Inc., 970 F.3d 798, 800 (7th Cir. 2020).

The leading Supreme Court case interpreting the residual category is Circuit City Stores, Inc. v. Adams , 532 U.S. 105, 121 S.Ct. 1302, 149 L.Ed.2d 234 (2001). The plaintiff in that case—an employee of a consumer electronics retailer—sought to avoid his contract's arbitration clause by arguing that Section One of the FAA precludes arbitration with respect to all contracts of employment. The Court rejected this view, holding that the residual category of Section One is confined to the employment contracts of "transportation workers." Circuit City , 532 U.S. at 109, 121 S.Ct. 1302. To reach that conclusion, the Court applied the statutory canon of ejusdem generis to hold that the residual category should be construed as "embrac[ing] only objects similar in nature to those objects enumerated by the preceding specific words"—i.e., seamen and railroad workers. Id. at 114–115, 121 S.Ct. 1302 (citation omitted). The Court further observed that the phrase "engaged in" interstate commerce sweeps less broadly than, for example, "affecting " commerce or "involving " commerce, such that the Section One exemption should be "afforded a narrow construction." Id. at 118, 121 S.Ct. 1302. To fall into the residual category, then, a class of workers must be transportation workers who are "active[ly] employ[ed]" in interstate commerce. Wallace , 970 F.3d at 801 (quoting Circuit City , 532 U.S. at 116, 121 S.Ct. 1302 ).¹ Put another way, as the Seventh Circuit did in Wallace , the relevant inquiry is whether the "interstate movement of goods [or people] is a central part of the class members’ job description." Wallace , 970 F.3d at 801.

As multiple courts have made clear, whether an individual transportation worker is entitled to the Section One exemption depends not on whether she personally has engaged in interstate commerce, but "whether the class of workers to which the complaining worker belong[s] [is] engaged in interstate commerce." Bacashihua v. U.S. Postal Service , 859 F.2d 402, 405 (6th Cir. 1988) (emphasis added); see also Capriole v. Uber Techs., Inc. , 460 F. Supp. 3d 919, 929 (N.D. Cal. 2020). What this means is that "a member of the class qualifies for the exemption even if she does not personally engage in interstate commerce," and, at the same time, "someone whose occupation is not defined by its engagement in interstate commerce does not qualify for the exemption just because she occasionally performs that kind of work." Wallace , 970 F.3d at 800 (citing Bacashihua , 859 F.2d at 405 ). For example, a furniture sales account manager who sometimes delivers furniture across state lines is not entitled to the exemption, because he does not belong to a class of transportation industry workers actively engaged in the interstate movement of goods. See, e.g., Hill v. Rent-A-Center, Inc. , 398 F.3d 1286, 1289–90 (11th Cir. 2005). But a truck driver for a company that regularly makes interstate trips falls within the exemption even if she herself only occasionally crosses state lines. See, e.g., Int'l Brotherhood of Teamsters Local Union No. 50 v. Kienstra Precast, LLC , 702 F.3d 954, 958 (7th Cir. 2012) ; Smith v. Allstate Power Vac, Inc. , 482 F.Supp.3d 40, 46 (E.D.N.Y. 2020) (plaintiff truck driver qualified for the exemption even though her job for a company that transported waste across state lines was principally to extract the waste, whereas other colleagues were "typically responsible for driving the waste to the out-of-state disposal facility"). Because the analysis necessarily focuses on the activity of a class of workers, a "plaintiff[’s] personal exploits are relevant only to the extent they indicate the activities performed by the overall class." Rogers v. Lyft, Inc. , 452 F. Supp. 3d 904, 915 ...