Superior Court of Massachusetts, Suffolk, Business Litigation Session
Christopher KAUDERS et al.
UBER TECHNOLOGIES, INC. et al.
January 3, 2019
MEMORANDUM OF DECISION AND ORDER ON (1) PLAINTIFFâS
MOTION FOR RECONSIDERATION OF THE COURTâS ORDER REMANDING
CLAIMS TO ARBITRATION and (2) DEFENDANTS UBER TECHNOLOGIES,
INC. and EASIER, LLCâs MOTION TO CONFIRM ARBITRATION
Douglas H. Wilkins, Associate Justice, Superior Court
court confesses its substantial difficulty in understanding
what, if any, limits the federal courts have placed upon the
expansion of federal power into traditionally state-law areas
concerning contract formation when arbitration is at issue.
This courtâs difficulty arises largely from sweeping federal
decisions regarding Federal Arbitration Act
(FAA) preemption that, to a state court, are
"untenable." See Feeney v. Dell, Inc., 466
Mass. 1001, 1003 (2013), applying American Express Co. v.
Italian Colors Restaurant, 133 S.Ct. 2304, 2312 (2013).
This court again addresses FAA preemption and state contract
law in response to the Plaintiffâs Motion for Reconsideration
of this Courtâs Order Remanding Claims to Arbitration, dated
November 28, 2018 (Third Reconsideration Motion, referred to
as "the Motion"), which the Defendants have
opposed. After hearing on July 25, 2017, the Motion is
ALLOWED IN PART AND DENIED IN PART .
Plaintiffs, Christopher P. Kauders ("Mr. Kauders"),
Lee C.S. Kauders ("Ms. Kauders") and Hannah Kauders
("Hannah") (collectively, "Plaintiffs" or
"The Kauders") have brought this discrimination, c.
93A and intentional tort action against Uber Technologies,
Inc. ("Uber"), Rasier, LLC ("Rasier") and
Jorge Munera ("Mr. Munera") for alleged refusal to
serve Mr. Kauders because he uses a service dog. The
complaint was filed on July 12, 2016, removed to federal
court and ultimately remanded to this Court on May 3, 2017,
for jurisdictional reasons arising out of the lack of
complete diversity of citizenship between one defendant, Mr.
Munera and the plaintiffs, all four of whom are all
Massachusetts citizens. On June 26, 2017, Uber and Rasier
filed "Defendantsâ Motion to Compel Arbitration and
Dismiss or, in the Alternative, Stay Proceedings"
("Motion"), which the Plaintiffs opposed.
year, in light of, among other things, its own prior
experience with the Feeney saga, this court applied
federal preemption reluctantly in favor of an order
compelling arbitration, because:
The Supreme Judicial Court has held that claims arising under
G.L.c. 151B are subject to arbitration only if the
arbitration clause applies to such claims with "clear
intent." Warfield v. Beth Israel Deaconess Medical
Center, Inc., 454 Mass. 390, 401-02 (2009). Grounded in
public policy concerns, Warfield predated
significant developments in the United States Supreme Court.
See, e.g., Feeney v. Dell, Inc., 466 Mass. 1001
(2013) (Feeney III), overruling Feeney v. Dell,
Inc., 454 Mass. 192, 193 (2009) (Feeney I) and
reconsidering Feeney v. Dell, Inc., 465 Mass. 192
(2013) (Feeney II), on the basis of American
Express Co. v. Italian Colors Restaurant, 133 S.Ct.
2304, 2312 (2013). The Supreme Judicial Court later expressed
doubt that an "express reference" requirement for
arbitration of specific statutory rights survives FAA
preemption. Machado, 471 Mass. at 218,
If there was any room for argument after Feeney III,
and Machado, the Supreme Court recently invalidated
the type of clear statement rules articulated in
Warfield, which are specifically applicable to
arbitration agreements but not to contracts generally.
Kindred at __ (Part IIA) ("The Kentucky Supreme
Courtâs clear-statement rule, in just that way, fails to put
arbitration agreements on an equal plane with other
Memorandum of Decision and Order on Defendantsâ Motion to
Compel Arbitration and Dismiss or, in the Alternative, Stay
Proceedings, dated August 1, 2017 (2017 Arbitration Order) at
4. This rationale addressed the plaintiffsâ principal
argument, which focused upon Warfield . Plaintiffsâ
Opposition to Defendantsâ Motion to Compel Arbitration and
Dismiss or, In The Alternative, Stay Proceedings (June 15,
2017) at 4-6 (Pl. First Opp.). The Court did strike the
offending portions of the Limitation of Liability Clause,
along with the cross-reference in the "Arbitratorâs
Decision" paragraph and ordered arbitration of the
disputes raised by Mr. and Ms. Kauders. See Machado v.
Svstem 4, LLC, 471 Mass. 204, 220 (2015) (Ordering
arbitration, but applying a contractual severability clause
to sever an invalid confidentiality provision in the partiesâ
September 1, 2017, this court declined to reconsider the 2017
Arbitration Order. See Memorandum on Plaintiffâs Motion for
Reconsideration of Ruling on Defendantsâ Motion to Compel
Arbitration (First Reconsideration Order). The court did,
however, modify the 2017 Arbitration Order so that it applies
to all plaintiffs, including Megan Kauders. The court again
denied reconsideration on November 28, 2017 (Second
these rulings, the parties proceeded to arbitration, where
Uber prevailed on the ground that, although the drivers did
violate state law, Uber lacked sufficient connection with the
driversâ actions to be liable in its own right. In the
meantime, however, the First Circuit Court of Appeals
rejected Uberâs interpretation to the same agreements at
issue here. Cullinane v. Uber Techs., Inc., 893 F.3d
53 (1st Cir. 2018). Cullinane reversed a District
Order— cited by the parties and the court in the 2017
proceedings in this case— which had rejected an
argument that, among other things, challenged whether, under
state law of contract formation, Uber had obtained an
enforceable agreement to arbitrate on virtually the same
facts as those present here. The First Circuitâs decision
suggested that, perhaps, there is a limit upon FAA preemption
which this court should have applied in the 2017 Arbitration
Order. It is highly persuasive that, in fact, Massachusetts
may apply its usual rules of contract formation to these
Because the court has serious concerns about the correctness
of the 2017 Arbitration Order in light of the First Circuitâs
decision in Cullinane, the court grants the Motion
for Reconsideration and vacates the 2017 Arbitration Order to
the extent that it enforced the putative contract to
Complaint alleges the following: Christopher Kauders is a
legally blind Massachusetts resident and guide dog user. On
three separate occasions in 2015 and 2016, Uber and Rasier
allegedly refused to allow Mr. Kauders into their
transportation service vehicles because he uses a guide dog.
His wife and daughter were with him on at least one occasion.
Uber and Rasier had notice of each incident before the next
one occurred. Mr. Kauders alleges that these refusals
violated the prohibition on discrimination against dog guide
users. See G.L.c. 272, Â§ 98A, which is incorporated into
G.L.c. 151B, Â§ 5.
parties do not context the following: Mr. and Ms. Kauders
registered with Uber at different times (on June 27, 2014 and
May 13, 2015, respectively). In or around October 2015,
Hannah Kauders signed up for an Uber account and presumably
entered into a version of the Agreement substantially similar
to the ones affecting her parents.
additional material facts— apparent primarily from the
screen shots submitted by Uber— are as follows: Before
riders can request transportation services through the Uber
App, they must register, which requires creating an Uber
account and accepting Uberâs terms and conditions.
Registration includes clicking on a button deemed to create a
contract, known as a Service Agreement
registration process involves three basic steps. Each step
appears as a single screen on the userâs smartphone, with no
scrolling required. Step One is "Create an
Account." A legend appears stating: "We use your
email and mobile number to send you ride confirmations and
receipts." At that stage, prospective riders enter their
email address, mobile phone number and a chosen password.
They then hit the "Next" button at the top right of
the screen to move to the next step.
Two is "Create a Profile." On this screen, the
following words appear: "Your name and photo helps your
driver identify you at pickup." Prospective Riders enter
their first and last names and hit the "Next"
button to move to the final step.
Three is "Link Payment." Here, prospective riders
either scan or enter their credit card information. The
following message appears at the bottom of the screen:
"By creating an Uber account, you agree to the Terms &
directs the rider to a screen with two links: one to Uberâs
However, the version of the "Link Payment" screen
attached to Uberâs papers show that the words "Terms &
rectangular box and are as bold as the words "scan your
card" and "enter promo code," but do not have
the customary appearance of a hyperlink, namely set forth in
blue and underlined. The rider must click on the appropriate
link to view either document. Otherwise, the "Terms &
riderâs screen during any of the three steps of the
registration process. Upon entering their payment
information, riders create their Uber account by ...