October 25, 2021 In an important victory for firm client American Arbitration Association (AAA), Hughes Hubbard helped secure denial of Ubers motion for a preliminary injunction seeking to suspend AAAs $10 million invoice to the ride-hailing giant for administrative costs associated with 7,771 arbitration cases. endobj Uber failed to establish likelihood of success on its claim under California Unfair action warranting restitution (see McBride v Boughton, 123 Cal App 4th 379, 387, 20 Cal 1281.97 to 1281.99 (the Cal CP Arbitration Rule). According to TechCrunch, one of the 8,500 claims accuses Uber Eats of violating the Unruh Civil Rights Act -- a California law that prohibits discrimination based on a number of factors including race -- because it charges discriminatory delivery fees based on the restaurant owners race. However, before that goes into effect, Californians will be voting on Proposition 22, an Uber and Lyft-backed measure that will maintain gig workers as independent contractors. 655549/21Case No. William Spencer Consovoy was born on Aug. 31, 1974, in Plainfield, N.J. unlawful prong, as Uber has not shown a likelihood of success on the underlying breach of the Uber is represented by Jenner and Block LLP. Uber was ordered to foot the bill for thousands of arbitration cases filed against it. Further, Uber could avoid the alleged irreparable harm caused by AAA by changing the assigned arbitration organization for the 31, 000 cases. Last month, a California appeals court ruled against Uber and Lyft, saying they will have to reclassify their drivers as employees in the state. Justice Reeds Oct. 14 decision on Ubers motion for a preliminary injunction to suspend AAAs invoice came after two days of arguments and testimony from Uber and AAA witnesses. Agricole Indosuez v Rossiyskiy Kredit Bank, 94 NY2d 541, 545, 548 [2000]; JSC VTB Bank v Mavlyanov, 154 This is the second time Ubers individual-arbitration requirement has blown up in its face. For all his ferocious defense of conservative causes, Mr. Consovoy was known for his ability to contain an argument to the courtroom, never letting an opponent become an enemy. would succeed on its declaratory judgment breach of contract claim. The users, who are represented by a Trump-connected law firm, say they were discriminated against by an Uber Eats promotion that waived delivery fees from Black-owned businesses after George Floyds murder. It was about the search for truth.. which denied plaintiffs' motion for preliminary injunctive relief, unanimously affirmed, without Loan Holder LLC, 174 A.D.3d 150, 163 [1st Dept 2019]), and here, monetary damages are available for all four of Uber's claims. Though he quickly made partner at Wiley Rein, he grew restless within the confines of a large firm. Unlock these benefits today when you sign-up for a FREE 7-day trial: Read more on the latest California legal trends in Lexis, 2023, Portfolio Media, Inc. | About Law360 Pulse | Contact Us | Terms | Privacy Policy, Enter your details below and select your area(s) of interest to receive Law360 Pulse daily newsletters, Email (NOTE: Free email domains not supported). %%EOF Uber then filed this complaint against AAA alleging that its invoicing was unlawful. From the beginning of Shelby, Will was helpful in conceiving the case and maneuvering it to the court, Bert W. Rein, a founder of Wiley Rein, where Mr. Consovoy worked until 2014, said in a phone interview. 4a 3e' @ 22. reasonableness of fees, but the sections referenced by Uber primarily deal with ensuring <>stream and administratively close the case files. It is also unlikely to succeed under the unfair prong, as AAA's enforcement of its fee schedule does not offend public policy, and is not immoral, unethical, oppressive, unscrupulous, or substantially injurious to consumers (People v Casa Blanca Convalescent Homes, 159 Cal.App.3d 509, 530 [1984]). Uber then sought relief from the fees with a New York state court. ConcurAcosta, P.J., Kern, Gonzlez, Shulman, JJ. On May 13, 2021, Uber paid Uber failed to establish likelihood of success on its claim under California Unfair Competition Law, which provides that "unfair competition shall mean and include any unlawful [or] unfair business act or practice" (Cal Bus & Prof Code 17200). Uber is effectively seeking a substantial reduction to the additional $91 million AAA will invoice to arbitrate the claims, which would be a monetary judgment precluding the preliminary injunction (see Credit Agricole Indosuez v Rossiyskiy Kredit Bank, 94 N.Y.2d 541, 545, 548 [2000]; JSC VTB Bank v Mavlyanov, 154 A.D.3d 560, 561 [1st Dept 2017]). AD3d 560, 561 [1st Dept 2017]). ], Inc. v Marathon Dev. AAA's rules, the Consumer Arbitration Rules (CA Rules). Consovoy McCarthy in an amicus filing said arbiter immunity leaves Uber's case "dead on arrival." Whatever the motivations behind the complaint, arbitration experts saw plenty of irony in Uber's . In addition, Uber argues that the court cannot order the end of its New York state court litigation, a matter which it says the petitioners have no interest in. In addition, Uber has asserted counterclaims against its arbitration counterparties seeking reimbursement of the fees at issue, thus cutting against its claim of irreparable harm. Cal., Inc., 2 Cal 4th 342, 374 [1992]), and while it chose not to exercise its discretion and reduce the fees after the parties could not agree to a more efficient manner of proceeding with over 31, 000 arbitrations, there is no evidence AAA acted with dishonesty, deceit, or unfaithfulness to duty (Storek & Storek, Inc. v Citicorp Real Estate, Inc., 100 Cal.App.4th 44, 59 [2002]). Rptr 3d 115, 120-121 [2004]). In legal papers, they have called the Uber Eats arbitration a "ransom by politically-motivated lawyers." William Consovoy, whose firm brought the arbitrations, is known for representing. Alexander Phipps. FAQ - New Privacy Policy. For Justice Thomas, I believed, judging was not about slogans, labels or legal theories, Mr. Consovoy said in a 2016 speech at George Mason. TechCrunch firstreportedthe news. Consovoy McCarthy represented former president Donald Trump in his dispute with congressional Democrats over subpoenas for his financial records. If you would like to customise your choices, click 'Manage privacy settings'. Consovoy also represented Trump in his protracted legal fight to prevent Manhattan District Attorney Cy Vance from obtaining the former president's tax returns. [Cal. not a separate cause of action, and Uber has not shown likelihood of success on another cause of costs. Mutual Fund and ETF data provided byRefinitiv Lipper. In doing so, AAA was AAA's fees are directly attributable to that decision.. Uber has not shown a likelihood of success on the merits of its breach of implied covenant /QORYQ)S-+'e%2EO!D_zs) U+ZsF[SlL%itDPB_oBbDPvuqQ:{6Fxyv}]/ZM+$ef CALIFORNIA APPEALS COURT RULES UBER, LYFT MUST RECLASSIFY DRIVERS AS EMPLOYEES. 2021-03782. 44 0 obj Sign up for notifications from Insider! covenant of good faith and fair dealing, unjust enrichment and restitution, and unfair competition In legal papers, they have called the Uber Eats arbitration a ransom by politically-motivated lawyers.. And Justice Reed specifically found that, to the extent that Uber could not recover the money it paid to AAA, that was the natural consequence of [Ubers] business decision to require in its consumer agreements that all disputes be determined by the AAA. For information regarding the selection process of awards, please visit https://www.hugheshubbard.com/legal-notices-methodologies. Before: Acosta, P.J., Kern, Gonzlez, Shulman, JJ. AAA adopted a new, reduced-fee schedule for "multiple consumer case . Ubers presentation of Justice Ramos caused a re-assignment of the case days before the hearing on the preliminary injunction after the previous judge, Justice Barry Ostrager, notified the parties of his ongoing personal relationship with Justice Ramos. case management fees for the second "batch" of 7,771 cases subject to the Cal CP Arbitration [or] unfair . In June, Uber announced that it would be waiving delivery fees for independent Black-owned restaurants as an incentive for customers to order from those businesses. From authenticate users, apply security measures, and prevent spam and abuse, and, display personalised ads and content based on interest profiles, measure the effectiveness of personalised ads and content, and, develop and improve our products and services. The complaint alleges essentially that non-party law firm Consovoy McCarthy PLLC (Consovoy) sought out thousands of Uber drivers to file claims through the firm alleging "reverse discrimination" stemming from Uber's temporary waiver of delivery fees. 2503 (N.Y. App. Williams mother, Linda Whalen, was a mental-health specialist. AAA responded by stating if payment was made under protest, it would return such fees and administratively close the case files. the CA Rules, including invoicing fees according to the fee schedule. In doing so, AAA was committing to invoice Uber a minimum of approximately $91.6 million. They say it was illegal to waive fees for certain Black-owned restaurants but not orders they placed from places owned by non-Black entrepreneurs. Because AAA determined that the Consovoy-filed demands against Uber met its mass arbitration criteria, it charged Uber an arbitration initiation fee of only about $140 per claim, not the $500 that the company would have had to pay for an individual consumer demand for arbitration. endstream Uber then filed this complaint against AAA alleging that its invoicing was unlawful. Identifiers and Personal Information. Shortly after, the law firm of Consovoy McCarthy PLLC began searching for Uber Eats Consovoy also didnt respond to a comment request, nor did the AAA or its lawyer Ted Hecht. On September 14, 2021, AAA issued an invoice demanding payment of $10.879 million for leaving the company owing as much as $92 million. Further, Uber could avoid the alleged and Uber would be settled by binding arbitration administered by the AAA in accordance with judgments for the four claims in its complaint. AAA also invoked California Code of Civil Procedure *"&QugkCv)MhD"@!=]34dY8Rdc;@ uu)E_k-]zB8VTX(XBYei? William Consovoy, whose firm brought the arbitrations, is known for representing clients like Donald Trump and the anti-affirmative action group Students for Fair Admissions. He clerked for Justice Clarence Thomas during the 2008-9 Supreme Court term, and he came away with the conviction that the court was poised to tilt further to the right and that constitutional rulings that had once been considered out of reach by conservatives, on issues like voting rights, abortion and affirmative action, would suddenly be within grasp. February 2, 2022. The decision affirms the ruling of the Commercial Division of the New York Supreme Court in October 2021 that denied Uber's motion for a preliminary injunction seeking to suspend AAA's invoice to Uber for administrative costs associated with 7,771 arbitration cases. The parties and AAA then engaged in months of fruitless negotiations to come up with a . They argued that Uber was unfairly stalling the arbitration by both its refusal to pay and its filing of a suit with a New York state court over failed negotiations with the AAA over the disputed fees. Schnader Harrison Segal & Lewis LLP, New York (Theodore L. Hecht of counsel), for According to a motion filed by some of the arbitration petitioners in federal court in San Francisco in December, Uber refused to pay the American Arbitration Association (AAA) filing fees it was obligated to under its own arbitration agreement. cases. December 1, 2020. arbitration fees associated with 31,000 nearly identical cases, it made the business decision to While Uber alleges that it, the claimants, and AAA are all bound by the CA Rules and Consumer Due Process Protocol Statement of Principles (Protocol), neither of those documents requires AAA to charge reasonable fees related to its actual costs. From October 26, 2020, to December 9, 2020, the Consovoy Firm filed over 31,000 substantively identical arbitration demands with AAA on behalf of the Uber Eats customers against Uber. He and Mr. McCarthy steadily expanded their firm from a two-man start-up to a 22-lawyer operation. of those documents requires AAA to charge reasonable fees related to its actual costs. The petitioners are represented by Consovoy McCarthy PLLC and Benbrook Law Group PC. Law360 and Reuters reported on the decision. The demands, filed by thousands of Uber Eats users who signed up online with the Consovoy McCarthy law firm, say Uber broke the law by requiring them to pay delivery fees for orders from non-Black-owned businesses. William Consovoy, a rising star within the conservative legal firmament who made his name arguing landmark cases on election law and affirmative action, often before the Supreme Court, and who represented President Donald J. Trump in his effort to keep his tax returns private, died on Monday at his home in Falls Church, Va. AAA is the worlds largest private mediation and alternative dispute resolution service. Mr. Consovoy represented Mr. Trump in his fight to prevent Congress from forcing the release of his tax returns. Cal Rptr 2d 267, 279-280 [2002]). In seeking a preliminary injunction, Uber had to "demonstrate, by clear and convincing evidence, (1) a likelihood of success on the merits, (2) irreparable injury absent the granting of the preliminary injunction, and (3) a balancing of the equities in the movant's favor" (Gilliland v Acquafredda Enters., LLC, 92 A.D.3d 19, 24-25 [1st Dept 2011]; see CPLR 6301). Kaplan Hecker & Fink LLP, New York (Roberta A. Kaplan of counsel), for appellants. Firm Scores Unanimous Appellate Win for American Arbitration Association Over Uber. Addressing the substance of the petitioners claims, Uber argues that the court should not hold it accountable for the $10 million AAA fees because it does not owe the AAA all of this money, as it is currently arguing before the New York court. (Cal Code Civ Proc 1281.97 [a] [1].) Shortly after, the law firm of Consovoy McCarthy PLLC began searching for Uber Eats customers who paid a delivery fee to a nonblack owned restaurant during the relevant time and asking them to challenge the lawfulness of Uber's policy by claiming it constituted unlawful reverse race discrimination. Shortly after, the law firm of Consovoy McCarthy PLLC began searching for Uber Eats customers who paid a delivery fee to a nonblack owned restaurant during the relevant time and asking them to challenge the lawfulness of Uber's policy by claiming it constituted unlawful reverse race discrimination. 2021-03782, Uber Technologies, Inc., et al., Plaintiffs-Appellants, v. American Arbitration Association, Inc., Defendant-Respondent. Supreme Court providently exercised its discretion in denying Uber's motion for a preliminary injunction. Uber asserted declaratory judgment claims based upon breach of contract, breach of the implied covenant of good faith and fair dealing, unjust enrichment and restitution, and unfair competition in violation of California's Unfair Competition Law (Cal Bus & Prof Code 17200 et seq.). Mr. Consovoy then worked closely with Mr. Blum on cases against Harvard and the University of North Carolina, arguing that their affirmative action programs and, by extension, college and university affirmative action programs generally were unconstitutional. 15732 Case No. 2021. Uber requires consumers to sign agreements that they will bring claims against the company in private arbitration rather than in public court. the fee schedule. Simultaneously, Uber moved for a preliminary injunction So in court it wasnt cheap appeals to emotion or anything like that. $1,500 arbitrator fee, for a total of approximately $107 million if charged the full amount under Rlm!ey?4e PK Z=K8Od!x]WGsr7_x]R'@JO<5R\__f.,Z#d Following the death of George Floyd in June 2020, Uber announced it would waive its delivery fee charged to customers for orders placed at certain qualifying Black-owned restaurants from June 4, 2020 through December 1, 2020.
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