Uber Tech., Inc. v. American Arbitration Assn., Inc.

Uber Tech., Inc. v. American Arbitration Assn., Inc.

Opinion

Order, Supreme Court, New York County (Robert R. Reed, J.), entered October 15, 2021, which denied plaintiffs' motion for preliminary injunctive relief, unanimously affirmed, without costs.

This is a contract dispute between plaintiffs Uber Technologies, Inc. and Uber USA, LLC (together, Uber) and defendant the American Arbitration Association, Inc. (AAA) over fees for approximately 31,500 similarly situated arbitrations. Uber's platform, "Uber Eats," allows customers to order takeout from various restaurants and have it delivered by a driver for a restaurant-specific delivery fee. In order to use the service, customers are required to agree to Uber's Terms of Use, which contains a provision stating that any dispute between the customer and Uber would be settled by binding arbitration administered by the AAA in accordance with AAA's rules, the Consumer Arbitration Rules (CA Rules). Following the death of George Floyd in June 2020, Uber announced it would waive its [*2]  delivery fee charged to customers for orders placed at certain qualifying Black-owned restaurants from June 4, 2020 through December 1, 2020. 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. 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.

In December 2020, AAA accepted and agreed to administer the claims according to the CA Rules, which included a fee schedule for individual cases. According to the fee schedule, for each case, Uber would owe AAA a $500 filing fee, a $1,400 standard case management fee, and a $1,500 arbitrator fee, for a total of approximately $107 million if charged the full amount under the fee schedule. AAA exercised its discretion as to the filing fee, and reduced it to approximately $4.3 million, which Uber paid without objection.

Full case includes Shepard's, Headnotes, Legal Analytics from Lex Machina, and more.