Kauders v. Uber Techs., Inc. - 486 Mass. 557, 159 N.E.3d 1033 (2021)

Rule:

Mass. Gen. Laws Ann. ch. 251, § 2 governs the enforceability and interpretation of arbitration agreements. Pursuant to § 2, a party can file a motion for an order compelling arbitration. The trial court judge must then determine whether an enforceable agreement to arbitrate exists. If the judge denies a motion to compel arbitration, the act permits the moving party to take an interlocutory appeal from that order. Mass. Gen. Laws Ann. ch. 251, § 18(a)(1). On the other hand, if the court grants the motion and compels arbitration, that order is not immediately appealable. The legislative purpose of Mass. Gen. Laws Ann. ch. 150C is clear that an arbitration proceeding should not be delayed by an appeal when a judge has concluded that there is an agreement to arbitrate. The issue of arbitrability under the terms of an agreement may be preserved and raised subsequently in a proceeding seeking to vacate the arbitrator's award.

Facts:

Plaintiffs Christopher Kauders and Hannah Kauders commenced a lawsuit against defendants Uber Technologies, Inc. and Rasier, LLC (collectively, Uber), in the Superior Court, claiming, among other things, that three Uber drivers, in violation of G. L. c. 272, § 98A, refused to provide Christopher Kauders with rides because he was blind and accompanied by a guide dog. Each of the plaintiffs registered with Uber through its cellular telephone application. Citing a provision in its terms and conditions, Uber sought to compel arbitration. The plaintiffs opposed arbitration on various grounds, including that there was no enforceable arbitration agreement. The judge granted Uber's motion, and the parties arbitrated their dispute in early 2018. On June 4, 2018, the arbitrator issued findings and a decision, ruling in favor of Uber on all of the plaintiffs' claims. On June 25, 2018, the United States Court of Appeals for the First Circuit issued a decision in Cullinane v. Uber Techs., Inc., 893 F.3d 53, 62 (1st Cir. 2018) (Cullinane II), concluding that Uber's registration process did not create a contract because it did not provide reasonable notice to users of the terms and conditions. Several months later, after Uber moved to confirm the arbitration award, the judge who had granted the motion to compel arbitration allowed a motion for reconsideration and reversed his earlier decision, concluding that there was no enforceable contract requiring arbitration. In this present appeal, Uber contended that the judge had no choice but to confirm the arbitration award once the plaintiffs failed to challenge the award within thirty days.

Issue:

Was there an enforceable contract between plaintiffs and defendants requiring arbitration? 

Answer:

No.

Conclusion:

The court held that the terms and conditions contained in the defendants' cellular telephone application did not constitute an enforceable online contract with the plaintiffs, where there was no reasonable notice to the plaintiffs of the terms (i.e., reasonable users might not understand that, by simply signing up for future services over the Internet, they had entered into a significant contractual relationship governed by wide-ranging terms of use), and where the interface obscured the manifestation of assent to those terms (i.e., a user could create an account without ever affirmatively stating that he or she had agreed to the terms and conditions or even viewing them). Since both the notice and the assent were obscured in the registration process, the company cannot enforce the terms and conditions against plaintiffs, including the arbitration agreement.