United States District Court, D. Massachusetts
RACHEL CULLINANE, JACQUELINE NUNEZ, ELIZABETH SCHAUL, AND ROSS McDONAGH, on behalf of themselves and all others similarly situated, Plaintiffs,
UBER TECHNOLOGIES, INC., Defendant.
MEMORANDUM AND ORDER
DOUGLAS P. WOODLOCK UNITED STATES DISTRICT JUDGE.
practice of avoiding consumer class action litigation through
the use of arbitration agreements is the subject of current
scholarly disapproval and skeptical investigative
journalism. It appears that at least one agency of the
federal government is considering regulating the use of such
agreements in so far as the subject matter is within its
jurisdiction. Nevertheless, the legal foundation
provided in Supreme Court jurisprudence regarding the Federal
Arbitration Act for construction of arbitration agreements
that bar consumer class actions is firmly embedded. Even
Justices who question the practice find themselves bound to
adhere to the blueprint opinions the Court has
plaintiff in this case extends an invitation to disassemble
the judicial construct permitting a bar to class action
litigation for consumer arbitration agreements. The
invitation suggests teasing out distinctions that truly make
no difference. This is not an institutionally authorized nor
intellectually honest way to change practice and legal policy
regarding the permissible scope of arbitration. Change, if it
is to come, must be effected by a refinement through
legislation and/or regulation that imposes restrictions on
arbitration agreements, or by a reversal of direction on the
part of the Supreme Court. It is not within the writ of the
lower courts to replot the contours of arbitration law when
the metes and bounds have been set clearly, unambiguously and
recently by the Supreme Court.
plaintiffs in this putative class action are a group of users
of the ride-sharing phone application designed and managed by
defendant Uber Technologies. They allege that Uber
overcharged them for travel to and from Boston Logan Airport
and East Boston by imposing fictitious fees hidden in charges
for legitimate local tolls. The plaintiffs seek class action
relief pursuant to Mass. Gen. Laws ch. 93A, § 9, and
accuse Uber of unjust enrichment. In response, Uber has filed
the motion before me, seeking to compel arbitration of the
dispute pursuant to 9 U.S.C. § 1 et seq, also
known as the Federal Arbitration Act ("FAA"). I
will allow that motion and dismiss this case.
Technologies ("Uber") is a ride-sharing service
that transports customers throughout Boston for a fee. [2d
Am. Compl., Doc. 54 ¶ 1] Uber's customers call for
Uber vehicles, and pay for the requested ride, through use of
Uber's smartphone app. [Id. ¶ 1]
named plaintiffs seek to represent a class of customers of
Uber residing in Suffolk and Middlesex Counties,
Massachusetts. [Id. ¶¶ 9-13] Each
downloaded the Uber application and created an account at
some point from 2012 to 2014. [Id. ¶¶
16-19; Doc. 34 ¶¶ 7-10] Plaintiff Jacqueline Nunez
used the app to hail a ride from Logan Airport on September
13, 2013, and was charged an $8.75 "Massport Surcharge
and Toll" ("Surcharge"). [Id.
¶¶ 41-42] Plaintiff Rachel Cullinane used the Uber
app to call a ride from Logan Airport on June 29, 2014, and
was charged a $5.25 toll and the $8.75 Surcharge.
[Id. ¶¶ 44-46]. Plaintiff Elizabeth Schaul
used Uber to obtain transportation to and from Logan airport
on numerous occasions between December 20, 2013 and December
1, 2014, and alleges that, each time, she was charged for an
inflated toll and the Surcharge. [Id. ¶¶
47-54] Plaintiff Ross McDonagh has used Uber to hail taxis to
and from East Boston and Logan Airport, and alleges that he
was charged the Surcharge and other fees multiple times
between May 21, 2014 and March 27, 2015. [Id.
¶¶ 55-65]. The named plaintiffs purport to
represent a putative class of plaintiffs composed of all
Massachusetts residents who, since October 18, 2011, have
been charged either the allegedly inflated toll fees or the
Surcharge. [Id. ¶ 78]
Account Creation Process
order to use the Uber application to call for transportation,
users must first create an account, either through Uber's
website, or through its smartphone app. [Doc. 32-1 ¶ 4]
Each plaintiff created his or her account through the
smartphone app. [Doc. 54 ¶¶ 16-19; Doc. 32-1
order to create an account, a user must proceed through three
steps, each with its own screen inside the smartphone app.
[Doc. 32-1 Ex. A-D] The first screen, entitled "Create
an Account", prompts the user to input an e-mail address
and mobile phone number, and to create a password for the
account she is attempting to create. [Doc. 32-1 Ex. A-1, B-1,
C-1, D-1] This screen also contains gray text on a black
background immediately below the blank white input boxes and
above the phone keyboard that says, "We use your email
and mobile number to send you ride confirmations and
second screen, entitled "Create a Profile", prompts
users to enter their first and last names and to submit a
photograph. [Doc. 32-1 Ex. A-2, B-2, C-2, D-2] This screen
contains gray text on a black background that says,
"Your name and photo helps [sic] your driver to identify
you at pickup". [Id.] This text is in the same
location as the gray text from the previous screen.
third and final screen in the account creation process,
entitled "Link Payment", prompts the user to enter
a credit card number to link a card to ride requests for
payment. [Doc. 32-1 Ex. A-3, B-3, C-3, D-3, D-4]. In the most
recent version of the screen, a version only used by Mr.
McDonagh, this screen also provides an option to link a
Paypal account in lieu of a credit card. [Doc. 32-1 Ex. D-3].
Immediately below the credit card information input box, and
above the keyboard, appear the words "By creating an
Uber account, you agree to the Terms of Service & Privacy
Policy". [Doc. 32-1 Ex. A-3, B-3, C-3, D-3, D-4] The
bold white lettering on a black background, and are
surrounded by a gray box, indicating a button. [Id.;
Doc. 32-1 ¶ 15] The other words are in gray lettering.
[Id.] If a user clicks the button that says
Service then in effect are displayed on the phone. [Doc. 32-1
entering payment information, the user must then click a
button with the word "Done" in the top-right-hand
corner of the screen in order to create an account. [Doc.
32-1 Ex. A3, B-3, C-3, D-3, D-4; Doc. 32-1 ¶ 15] This
button is grayed out and unclickable until the user enters
her payment information. [Doc. 32-1 Ex. A-3, B-3, C-3, D-3,
D-4] Users must complete all of the information requested in
the input boxes on each screen and click the "Done"
button on the last screen in order to create an account.
[Doc. 32-1 ¶ 15].
Uber Terms and Conditions
Uber Terms & Conditions ("Agreement") are contained
in a 10-page document available to users who click on the box
containing the phrase "Terms of Service & Privacy
Policy" on the final screen of the account creation
process. [Doc. 32-6 Ex. A-B, 32-1 ¶ 15] The Agreement
contains many headings, each of which lays out certain terms
of use for users of Uber's app. [Doc. 32-6 Ex. A-B] Uber
changed its Agreement on May 17, 2013. [Doc. 32-6 Ex. B] As a
result, the Agreement that Ms. Nunez would have seen had she
clicked on the button on the last screen (nothing in the
complaint indicates than any of the plaintiffs did click
through) would have taken her to a different document than
that available to the other plaintiffs. [Doc. 32-6
¶¶ 4-5] However, the only relevant difference
between the two documents is that the earlier Agreement had
slightly larger headings for each section. [Doc. 32-6 Ex.
Agreement states that it "constitute[s] a legal
agreement between [user] and Uber. . . . In order to use the
Service  and the associated Application , you must agree
to the terms and conditions that are set out below."
[Doc. 32-6 Ex. A-B at 1] The contract also states that, by
using any of Uber's services, the user "expressly
acknowledge[s] and agree[s] to be bound by the terms and
conditions of the Agreement." [Id.]
Agreement contains a section starting on page 9 (page 8 of
the newer agreement) under the heading "Dispute
Resolution." [Doc. 32-6 Ex. A at 9-10; Doc. 32-6 Ex. B
at 8-10]. This section provides that the user and Uber
agree that any dispute, claim or controversy arising out of
or relating to this Agreement or the breach, termination,
enforcement, interpretation or validity thereof or the use of
the Service or Application (collectively,
"Disputes") will be settled by binding arbitration,
except that each party retains the right to bring an
individual action in small claims court. . . . You
acknowledge and agree that you and Company are each waiving
the right to a trial by jury or to participate as a plaintiff
or class User in any purported class action or representative
proceeding. Further, unless both you and Company otherwise
agree in writing, the arbitrator may not consolidate more
than one person's claims, and may not otherwise preside
over any form of any class or representative proceeding.
[Doc. 32-6 Ex. A-B at 9] (emphasis in original). Under a
sub-heading entitled "Arbitration Rules and Governing
Law", the Agreement states, "The arbitration will
be administered by the American Arbitration Association
("AAA") in accordance with the Commercial
Arbitration Rules and the Supplementary Procedures for
Consumer Related Disputes (the "AAA Rules") then in
effect. . . . The Federal Arbitration Act will govern the
interpretation and enforcement of this section."
[Id.] The Agreement also provides that, should a
user's claim be for an amount under $75, 000, Uber will
pay any arbitration-related fees. [Id.]
Cullinane and Nunez, on behalf of themselves and a putative
class, filed this case in Massachusetts Superior Court. [Doc.
1-1, Original Complaint] The Original Complaint alleged five
causes of action, four of which contained contract-related
claims that have since been dropped by plaintiffs.
[Id. ¶¶ 52-63] The fifth claim was the
remaining claim of unjust enrichment. [Id.
removed the case to this Court pursuant to the Class Action
Fairness Act (CAFA), 28 U.S.C. § 1332(d). Plaintiffs
responded with a motion to remand to State Court for lack of
subject matter jurisdiction, claiming that Uber had not shown
that this dispute would meet CAFA's amount in controversy
requirement of $5 million. I denied that motion.
have successively filed two amended complaints. The first
amended complaint added Schaul and McDonagh as named
plaintiffs, and added the East Boston toll (experienced by
Mr. McDonagh) claim to the claims based on the Surcharge. The
plaintiffs also added a sixth count to their complaint,
alleging that the hidden charges constitute unfair and
deceptive acts in violation of Chapter 93A of the
Massachusetts General Laws. The plaintiffs thereafter filed a
Second Amended Class Action Complaint, which is currently the
operative complaint, dropping the counts based on breach of
contract, leaving only a Chapter 93A claim (Count
and a common law unjust enrichment claim (Count II). [Doc.
54, ¶¶ 85-91].
part, Uber filed a motion to compel arbitration and stay or,
in the alternative, to dismiss. The threshold question
whether arbitration must be compelled will be addressed in
this Memorandum. Because I conclude the answer to that
question is "yes, " it is for the arbitration
tribunal to determine the merits of the claim. Since
arbitration must be compelled and nothing else remains for