342, 374, 826 P2d 710, 728 [1992]), and while it chose not to exercise its discretion and reduce 2021-03782. 2021-03782, Uber Technologies, Inc., et al., Plaintiffs-Appellants, v. American Arbitration Association, Inc., Defendant-Respondent. Mutual Fund and ETF data provided byRefinitiv Lipper. 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. Uber says it has received more than 8,500 demands for arbitration as a result of it ditching delivery fees for some Black-owned restaurants via Uber Eats. [or] unfair . likelihood of success on the merits on any claim, this Court need not reach the issue of arbitral The decision set off a wave of new voting laws, including limits on early and absentee voting. endstream Uber stated it would pay that amount, but "under protest." AAA responded by stating if payment was made under protest[*2] et seq. I think he was one of the greatest lawyers of our generation, Neal Katyal, an acting solicitor general for President Barack Obama, said in a phone interview. ?`Z?01* f3 G, to preserve the status quo by enjoining AAA from issuing any additional invoices, prohibiting 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. Because Supreme Court did not abuse its discretion in finding that Uber failed to establish a likelihood of success on the merits on any claim, this Court need not reach the issue of arbitral immunity under California law. The balance of the equities weighs in favor of AAA. approximately 31,500 similarly situated arbitrations. Readers are advised that prior results do not guarantee a similar outcome. % more efficient process for dealing with the 31,500 arbitration cases. Thomas R. McCarthy (pro hac vice forthcoming) tom@consovoymccarthy.com CONSOVOY MCCARTHY PLLC 1600 Wilson Boulevard, Suite 700 Arlington, VA 22209 (703) 243-9423 . 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. 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]). costs. Thus, it is unlikely Uber would succeed on its declaratory judgment breach of contract claim. unlawful prong, as Uber has not shown a likelihood of success on the underlying breach of the 15732 Case No. Uber solely seeks declaratory judgments for the four claims in its complaint. On May 13, 2021, Uber paid the $667,800 in case management fees for the first 477 cases. 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. claims down into five different batches, with the first batch containing 477 non-California cases, AAA also invoked California Code of Civil Procedure He knew every argument, the upside of the argument, where were vulnerable, where were strong.. #qhiwBCH>Mes N-tJ!x[s]![8sILhG6{(o /D (together, Uber) and defendant the American Arbitration Association, Inc. (AAA) over fees for enforcement of its fee schedule does not offend public policy, and is not immoral, unethical, Please see our Privacy Policy. LAWSUIT ALLEGES UBER COERCED DRIVERS INTO SUPPORTING CALIFORNIA PROP. Uber Eats made this change in June . The policy was started as a way to support the Black community in the wake of the killing of George Floyd and a month after it was put in place, Uber CEO Dara Khosrowshahi announced the policy would be extended through the rest of 2020. Uber stated it would pay that amount, but "under protest." In both instances, the university successfully defended its plan to automatically admit in-state students who had graduated in the top 10 percent of their class. AAA responded by stating if Uber previously paid $155 million to settle thousands of driver arbitrations. William Spencer Consovoy was born on Aug. 31, 1974, in Plainfield, N.J. 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. 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. Rule. And thats actually, sadly, a rare thing., William Consovoy Dies at 48; Took Conservative Cases to Supreme Court, https://www.nytimes.com/2023/01/12/us/william-consovoy-dead.html. Appeal No. In December 2020, AAA accepted and agreed to administer the claims according to the CA Rules, which included a fee schedule for individual cases. 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.). This is the second time Ubers individual-arbitration requirement has blown up in its face. It was about the search for truth.. ], Inc. v Marathon Dev. Finally, in April 2021, AAA On May 13, 2021, Uber paid 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. He clerked for Judge Edith Jones of the U.S. Court of Appeals for the Fifth Circuit before becoming the first student from George Masons law school to clerk for the Supreme Court. Uber failed 2020. https://www.hugheshubbard.com/legal-notices-methodologies. However, other restaurant owners -- whose customers still have to pay delivery fees -- are unhappy. Powered and implemented byFactSet Digital Solutions. Find out more about how we use your personal data in our privacy policy and cookie policy. A group of about 31,500 Uber Eats users filed arbitration claims accusing the company of what a court called reverse race discrimination. Uber argued that it shouldnt have to pay for them individually since they were all basically the same. Eats customers against Uber. Attorney advertising. 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). endobj Mr. Consovoy often led the charge in attacking existing laws in court or defending new ones. But arbitration claims can only be brought one by one, with the company on the hook for the costs of each. From October 26, 2020, to December 9, 2020, the Consovoy Firm monetary damages are available for all four of Uber's claims. Cal., Inc., 2 Cal 4th While acknowledging this background, Justice Robert Reed of the Commercial Division emphasized that Ubers suit against AAA does not in any way involve an analysis of the merits of the reverse discrimination claims asserted by the Consovoy law firm. preliminary injunction. 655549/21Case No. 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. 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. Dan Weiner, John Townsend and Jack Kilgard represent AAA on the matter. I;C Simultaneously, Uber moved for a preliminary injunction to preserve the status quo by enjoining AAA from issuing any additional invoices, prohibiting AAA from closing any open arbitrations due to Uber's refusal to pay AAA's invoice, and extending the invoicing deadline in the event Uber's claims cannot be adjudicated before then. <>stream You can change your choices at any time by clicking on the 'Privacy dashboard' links on our sites and apps. endobj For information regarding the selection process of awards, please visit https://www.hugheshubbard.com/legal-notices-methodologies. Mr. Consovoy was diagnosed with brain cancer in 2020 and stepped away from litigation last fall. 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. 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]). FAQ - New Privacy Policy. with its reasonable, actual costs. which denied plaintiffs' motion for preliminary injunctive relief, unanimously affirmed, without Shortly after, the law firm of Consovoy McCarthy PLLC began searching for Uber Eats 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. The balance of the equities weighs in favor of AAA. Uber Eats is being accused of discrimination after it waived delivery fees for some Black-owned restaurants over the summer. Kaplan Hecker & Fink LLP, New York (Roberta A. Kaplan of counsel), for On September 14, 2021, AAA issued an invoice demanding payment of $10.879 million for case management fees for the second "batch" of 7, 771 cases subject to the Cal CP Arbitration Rule. respondent. d{@E u et$/ At]btR? He denied the accusation, and no charges were ever brought. Mr. Consovoy was perhaps best known for his work with Edward Blum, the conservative activist who engineered the effort to have the Supreme Court overturn Section 4 of the Voting Rights Act and, more recently, to outlaw affirmative action in higher education. Uber has not shown a likelihood of success on the merits of its breach of implied covenant Contrary to Uber's allegations, this claim is unlikely to succeed under the The Protocol, while not explicitly [*3]mentioned in Uber's Terms of Use, has language regarding Kaplan Hecker & Fink LLP, New York (Roberta A. Kaplan of counsel), for appellants. Williams mother, Linda Whalen, was a mental-health specialist. ;kF_UT^+T_GONS>s[$l alternative payment process for multiple case filings. ), entered October 15, 2021, Consovoy McCarthy represented former president Donald Trump in his dispute with congressional Democrats over subpoenas for his financial records. Because Supreme Court did not abuse its discretion in finding that Uber failed to establish a and convincing evidence, (1) a likelihood of success on the merits, (2) irreparable injury absent Law360 reported on Justice Reeds preliminary injunction decision here and Justice Ostragers recusal here. In 2020, Uber implemented a slew of initiatives to support Black-owned restaurants, including waiving delivery fees for meals from Black-owned establishments ordered through Uber Eats,. He married Masa Anisic in 2020. ]. This material may not be published, broadcast, rewritten, or redistributed. consumers, and AAA's fees are directly attributable to that decision (see Avenue A Assoc. He came from a family steeped in New Jersey politics. Moreover, the arbitrator may Alexander Phipps. endobj The CA endstream He was equally involved in efforts to strike down affirmative action by colleges and universities. Thus, it is unlikely Uber In April, an appellate panel agreed. Uber could be on the hook for $92 million or more in arbitration fees, depending on how far the cases go. implied covenant claim. Schnader Harrison Segal & Lewis LLP, New York (Theodore L. Hecht of counsel), for respondent. So in court it wasnt cheap appeals to emotion or anything like that. Basic principles of federalism require this Court to allow the New York court to complete its work rather than overriding a pending case between Uber and a third party, the filing says. I received an email from consovoy McCarthy to accept $370 settlement. 22. Supreme Court providently exercised its discretion in denying Uber's motion for a arbitration administrator's rules within 30 days of the "due date" is deemed to be "in material While Uber is trying to avoid paying the arbitration fees associated with 31,000 nearly identical cases, it made the business decision to preclude class, collective, or representative claims in its arbitration agreement with its consumers, the April decision said. favor" (Gilliland v Acquafredda Enters., 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. 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. appellants. Order, Supreme Court, New York County (Robert R. Reed, J. 31,000 arbitrations, there is no evidence AAA acted with dishonesty, deceit, or unfaithfulness to Though he quickly made partner at Wiley Rein, he grew restless within the confines of a large firm. 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. breach of the arbitration agreement, is in default of the arbitration, and waives its right to compel The company has received more than 8,500 demands for arbitration over the policy, an Uber spokesperson confirmed to FOX Business. July 12, 2022In a crucial victory for our client the American Arbitration Association (AAA), HHR helped secure denial of Uber's motion for preliminary injunctive relief in its bid to block the AAA from charging nearly $92 million in arbitration fees. In 2014, Mr. Consovoy and Mr. McCarthy, who was also at Wiley Rein, left that firm to found Consovoy McCarthy. That was not the case with him. If you would like to customise your choices, click 'Manage privacy settings'. Uber and its lawyer Roberta Kaplan didnt respond to requests for comment. 41 0 obj Meanwhile, Uber is also facing other legal battles. In a statement emailed to FOX Business, Uber spokesperson Meghan Casserlysaidthe company intends to continue the policy. Rlm!ey?4e PK Z=K8Od!x]WGsr7_x]R'@JO<5R\__f.,Z#d Further, Uber could avoid the alleged irreparable harm caused by AAA by changing the assigned arbitration organization for the 31, 000 cases. 0 NY Slip Op 32080(U). and administratively close the case files. 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. 3Y^j{4J 2021. restaurant-specific delivery fee. For information regarding the selection process of awards, please visit https://www.hugheshubbard.com/legal-notices-methodologies. cases. Supreme Court of New York, First Department. AAA's rules, the Consumer Arbitration Rules (CA Rules). The 31,000 arbitration demands by Uber Eats customers, the company said, are cookie-cutter claims assembled by a single law firm, Consovoy McCarthy, which orchestrated the mass arbitration. 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). 17200). QtvdY`>U^fQn(%:Npb(! the CA Rules, including invoicing fees according to the fee schedule. 2022). AAA from closing any open arbitrations due to Uber's refusal to pay AAA's invoice, and The lawyer William Consovoy, left, in July 2019, leaving a courthouse in Washington where he was representing President Donald J. Trump in his fight to prevent Congress from forcing the release of his tax returns. Firm Scores Unanimous Appellate Win for American Arbitration Association Over Uber. AAA is the worlds largest private mediation and alternative dispute resolution service. The petitioners are represented by Consovoy McCarthy PLLC and Benbrook Law Group PC. irreparable harm caused by AAA by changing the assigned arbitration organization for the 31,000 While Uber is trying to avoid paying the Uber stated it would pay that amount, but "under protest." While Justice Ostrager initially maintained that his relationship with Justice Ramos would not affect his presiding over the case, he decided to recuse himself after AAA objected to Ubers presentation of a well-known, recently retired Commercial Division justice as an expert in that same court. In seeking a preliminary injunction, Uber had to "demonstrate, by clear The firm of William Consovoy, a lawyer best-known for representing former President Donald Trump, used social media to enlist customers who claimed Uber Eats's 2020 waiver of delivery fees. Despite his clear conservative leanings, Mr. Consovoy won praise from many of his legal sparring partners on the left, both for his acumen and for the dispassionate way he approached his ideologically contentious cases. Uber's platform, "Uber Eats," allows techcrunch. +Knj#cxc2^?e%--3J<=1$Nkko%4P c^bd{#d}SX% MD'9Zh>Qx&|M+xe8w0Ro7x{uaR\1;Y?V?AjrMdkL 8|9Aut/U California Code of Civil Procedure 1281.97. Full title:Uber Technologies, Inc., et al., Plaintiffs-Appellants, v. American, Court:Supreme Court of New York, First Department, Appeal No. Uber has appealed to the Appellate Division, First Department. In legal papers, they have called the Uber Eats arbitration a ransom by politically-motivated lawyers.. 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 . The Protocol, while not explicitly mentioned in Uber's Terms of Use, has language regarding reasonableness of fees, but the sections referenced by Uber primarily deal with ensuring consumers receive due process and the impartiality of the arbitrators. judgment when other remedies are available, such as monetary damages (see Atlas MF Mezzanine Borrower, LLC v covenant of good faith and fair dealing, unjust enrichment and restitution, and unfair competition $1,500 arbitrator fee, for a total of approximately $107 million if charged the full amount under endobj Uber was ordered to foot the bill for thousands of arbitration cases filed against it. [Cal. 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. AAA responded by stating if payment was made under protest, it would return such fees and administratively close the case files. X?RD6")x`g=D?^~ 9xLrb^K,O ',`+^(?5Z`&^JL("[T\(9$xwMa)UT8u9v-%T`0B*93,} ~&&CN@Nhkojo8Q= = |CM*Y /cW8sxjM9^UxX~Zjm Stay up to date with what you want to know. 2023 FOX News Network, LLC. Casetext, Inc. and Casetext are not a law firm and do not provide legal advice. No aspect of this advertisement has been approved by the Supreme Court of New Jersey. In 2020 alone, he argued against an extension of the deadline for mail-in ballots in Wisconsin, the re-enfranchisement of felons in Florida and a California plan to send absentee ballots to all registered voters. i1=fwdhg="XP.6]';QF`?[# He was an enormously talented legal strategist, Mr. Blum said in a phone interview. AAA exercised its discretion as to the filing fee, and reduced it to approximately $4.3 million, which Uber paid without objection. While Uber is trying to avoid paying the arbitration fees associated with 31, 000 nearly identical cases, it made the business decision to preclude class, collective, or representative claims in its arbitration agreement with its consumers, and AAA's fees are directly attributable to that decision (see Avenue A Assoc. The parties and AAA then engaged in months of fruitless negotiations to come up with a 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). reverse race discrimination. of the Hearth House Condominium, 190 AD3d 473, 474 [1st Dept 2021]). There, he became a devotee of Justice Thomas, captivated by his no-holds-barred originalism. Ubers motion to dismiss is the latest filing in a multi-case saga that started with lawsuits filed by Uber Eats customers over an allegedly racially discriminatory pricing policy charging customers who ordered from Black-owned businesses less than those who ordered from non Black-owned businesses. Moreover, the arbitrator may impose severe sanctions on the breaching party, including entry of a default judgment, prohibiting discovery, monetary sanctions, and orders of contempt. LLC, 92 AD3d 19, 24-25 [1st Dept 2011]; see CPLR 6301). not a separate cause of action, and Uber has not shown likelihood of success on another cause of Uber Eats made this change in. and Uber would be settled by binding arbitration administered by the AAA in accordance with endobj would succeed on its declaratory judgment breach of contract claim. [Cal. leaving the company owing as much as $92 million. Uber has received more than 8,500 demands for arbitration over the food delivery app's policy of waiving delivery fees for some Black-owned restaurants. He played a supporting role in Fisher v. the University of Texas, a case that originated in 2008 and came before the Supreme Court twice. In a filing submitted on Sunday, Uber Technologies Inc. and Uber USA. 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]). claim, as AAA was fully within its express rights under the CA Rules to charge the fees set forth #X5.0l`}u,"ZeJRg&[eT%X`XZa(`E;1@kU42mzsGIOd~{~ r1Y/iN5xI]e_!Qae. . Case info is listed online and his firm is all over google for the win. Uber solely seeks declaratory Law360and Reutersreported on the decision. 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. then. 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.

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