People v. Uber Techs., Inc.

Citation56 Cal.App.5th 266,270 Cal.Rptr.3d 290
Decision Date22 October 2020
Docket NumberA160701, A160706
CourtCalifornia Court of Appeals Court of Appeals
Parties The PEOPLE, Plaintiff and Respondent, v. UBER TECHNOLOGIES, INC., et al., Defendants and Appellants.

Keker, Van Nest & Peters, Christa M. Anderson, Rachael E. Meny, R. James Slaughter, San Francisco; Munger, Tolles & Olson, Rohit K. Singla, Miriam Kim, Justin P. Raphael, San Francisco, Jeffrey Y. Wu, Los Angeles, for Defendant and Appellant Lyft, Inc.

Gibson, Dunn & Crutcher, Theodore J. Boutrous, Jr., Theane Evangelis, Los Angeles, Blaine H. Evanson, Irvine, Heather L. Richardson, Los Angeles, for Defendant and Appellant Uber Technologies, Inc.

Crowell & Moring, A. Marisa Chun, San Francisco, Kayvan Ghaffari, Alice Hall-Partyka, Los Angeles, for Bay Area Council, Earth Sparks, Internet Association, Silicon Valley Leadership Group, and Technet as Amici Curiae on behalf of Defendants and Appellants Lyft, Inc. and Uber Technologies, Inc.

Horvitz & Levy, Jeremy B. Rosen, Felix Shafir, Steven S. Fleischman, Burbank, for Chamber of Commerce of the United States of America, California Chamber of Commerce, National Retail Federation, and HR Policy Association as Amici Curiae on behalf of Defendants and Appellants Lyft, Inc. and Uber Technologies, Inc.

Willenken, Amelia L. B. Sargent, Los Angeles, Kenneth M. Trujillo-Jamison for California Asian Pacific Chamber of Commerce, California Hispanic Chambers of Commerce, California State National Action Network, CA-NAACP State Conference, Los Angeles Metropolitan Churches, Los Angeles Urban League, National Action Network Sacramento Chapter Inc., National Asian American Coalition, National Black Chamber of Commerce, National Diversity Coalition, National Hispanic Council on Aging, National Newspaper Publishers Association, and Southern Christian Leadership Conference of Southern California ("Communities-of-Color Organizations") as Amici Curiae on behalf of Defendants and Appellants Lyft, Inc. and Uber Technologies, Inc.

Durie Tangri, Benjamin B. Au, Raghav R. Krishnapriyan, San Francisco, for Denise Alvarado, Tony Do, Mimi Fan, Victoria Broussard, Jim Pyatt, Daniel Farris, Robert Prather, Howard Tanner, and Independent Drivers Association of California as Amici Curiae on behalf of Defendants and Appellants Lyft, Inc. and Uber Technologies, Inc.

Independent Women's Law Center, Jennifer C. Braceras; Littler Mendelson, Bruce J. Sarchet, Sacramento, Michael J. Lotito, San Francisco, for Independent Women's Law Center as Amicus Curiae on behalf of Defendants and Appellants Lyft, Inc. and Uber Technologies, Inc.

Eimer Stahl, Robert Dunn, John D. Tripoli, Irvine, for Mothers Against Drunk Driving and the California State Sheriffs’ Association as Amici Curiae on behalf of Defendants and Appellants Lyft, Inc. and Uber Technologies, Inc.

Xavier Becerra, Attorney General, Michael L. Newman, Senior Assistant Attorney General, Satoshi Yanai, Supervising Deputy Attorney General, Minsu D. Longiaru, Marisa Hernández-Stern, Mana Barari, and R. Erandi Zamora-Graziano, Deputy Attorneys General; Michael N. Feuer, City Attorney (Los Angeles), Michael Bostrom, Managing Assistant City Attorney; Mara W. Elliott, City Attorney (San Diego), Mark Ankcorn, Chief Deputy City Attorney, Kevin B. King and Marni Von Wilpert, Deputy City Attorneys; Dennis J. Herrera, City Attorney (San Francisco), Ronald P. Flynn, Chief Deputy City Attorney, Yvonne R. Meré, Chief of Complex and Affirmative Litigation, Molly J. Alarcon, Sara J. Eisenberg, and Matthew D. Goldberg, Deputy City Attorneys, for Plaintiff and Respondent.

Partnership for Working Families, Reynaldo Fuentes; Law Office of Beth A. Ross and Beth A. Ross for Gig Workers Rising, Mobile Workers Alliance, Rideshare Drivers United, and We Drive Progress as Amici Curiae on behalf of Plaintiff and Respondent.

Altshuler Berzon, Stacey Leyton, Andrew Kushner, San Francisco; Weinberg, Roger & Weinberg, David A. Rosenfeld, Alameda; Law Office of Beth A. Ross and Beth A. Ross for International Brotherhood of Teamsters, Service Employees International Union California State Council, State Building and Construction Trades Council of California, Transport Workers Union, United Food and Commercial Workers Union Western States Council, Unite Here, and California Labor Federation as Amici Curiae on behalf of Plaintiff and Respondent.

National Employment Law Project, Nayantara Mehta, Oakland, Brian Chen ; Legal Aid at Work, George Warner for National Employment Law Project, ACLU of Northern California, Asian Americans Advancing Justice–Asian Law Caucus, Bet Tzedek Legal Services, California Employment Lawyers’ Association, the Center for Workers’ Rights, Centro Legal de la Raza, Council on American-Islamic Relations–California Chapter, La Raza Centro Legal's Workers’ Rights Program, Legal Aid at Work, the Lawyers’ Committee for Civil Rights of the San Francisco Bay Area, the Women's Employment Rights Clinic of Golden Gate University School of Law, and Worksafe, Inc. as Amici Curiae on behalf of Plaintiff and Respondent.

Public Rights Project, Jill E. Habig, Jonathan B. Miller, Lijia Gong, Sophia Tonnu for Public Rights Project, A Better Balance, Center for Popular Democracy, ChangeLab Solutions, Equal Justice Society, Equal Rights Advocates, National Center for Law and Economic Justice, National Center for Lesbian Rights, National Partnership for Women and Families, National Women's Law Center, One Fair Wage, Open Markets Institute, People's Parity Project, Public Counsel, Towards Justice, and Women's Law Project as Amici Curiae on behalf of Plaintiff and Respondent.

STREETER, J.

To secure a preliminary injunction, the plaintiff must establish "that he is likely to succeed on the merits, that he is likely to suffer irreparable harm in the absence of preliminary relief, that the balance of equities tips in his favor," and, particularly where public harm is implicated, "that an injunction is in the public interest." ( Winter v. Natural Resources Defense Council, Inc. (2008) 555 U.S. 7, 20, 129 S.Ct. 365, 172 L.Ed.2d 249 ( Winter ).) But it must always be kept in mind that interim injunctive relief is rooted in principles of equity and is fundamentally committed to the sound discretion of the trial court. "Flexibility is a hallmark of equity jurisdiction. ‘The essence of equity jurisdiction has been the power of the Chancellor to do equity and to mould each decree to the necessities of the particular case. Flexibility rather than rigidity has distinguished it.’ [Citation.] Consistent with equity's character, courts do not insist that litigants uniformly show a particular, predetermined quantum of probable success or injury before awarding equitable relief. Instead, courts have evaluated claims for equitable relief on a ‘sliding scale,’ sometimes awarding relief based on a lower likelihood of harm when the likelihood of success is very high." ( Id . at p. 51, 129 S.Ct. 365 (dis. opn. of Ginsburg, J.).)

This reminder that the foundation of interim injunctive relief lies in equity comes from Justice Ruth Bader Ginsburg, who was renowned for her expertise in procedure long before she became the national icon known as RBG. What Justice Ginsburg says in Winter , though put forward on a point of federal law in dissent—a dissent that would have affirmed as within a trial judge's considered discretion the issuance of a preliminary injunction in favor of a private party against an alleged violation of a federal statute by the Navy—happens to capture the essence of California law on the same point. ( Butt v. State of California (1992) 4 Cal.4th 668, 678, 15 Cal.Rptr.2d 480, 842 P.2d 1240 ( Butt ) [a trial court's decision to issue preliminary injunctive relief "must be guided by a ‘mix’ of the potential-merit and interim-harm factors; the greater the plaintiff's showing on one, the less must be shown on the other to support an injunction"].) Justice Ginsburg's cogent explanation of the governing standard as one that rests on a "sliding scale" calculus expresses a principle that will ultimately drive our analysis of this case.

We have before us a civil enforcement action brought by the People1 against defendants Uber Technologies, Inc. and Lyft, Inc. (Uber and Lyft). Compared to Winter , the roles of the parties are reversed: It is the government that seeks interim injunctive relief against private parties. The core allegation in the case is that Uber and Lyft improperly misclassify drivers using their ride-hailing platforms as independent contractors rather than employees, thus depriving them of a host of benefits to which employees are entitled. This misclassification, it is alleged, also gives defendants an unfair advantage against competitor companies, while costing the public significant sums in lost tax revenues and increased social-safety-net expenditures that are foisted on the state because drivers must go without employment benefits. Mindful that—absent legal error—our role in reviewing a decision to issue interim injunctive relief is a limited one, we address here whether the trial court abused its discretion in granting a preliminary injunction that restrains Uber and Lyft from classifying their drivers as independent contractors. Seeing no legal error, we conclude the trial court acted within its discretion and accordingly affirm the order as issued.2

I. BACKGROUND
A. Legal Framework—Assembly Bill 5

In 2019, the Legislature enacted Assembly Bill 5 (AB 5), which codified the decision of our high court in Dynamex Operations West, Inc. v. Superior Court (2018) 4 Cal.5th 903, 232 Cal.Rptr.3d 1, 416 P.3d 1 ( Dynamex ). (See Stats. 2019, ch. 296, § 1.) As currently found in Labor Code section 2775,3 AB 5 provides in pertinent part: "For purposes of this code and the Unemployment Insurance Code, and for the purposes of wage orders of the Industrial Welfare Commission, a person providing labor or services for...

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