Bonhomme v. Uber Technologies, Inc.

Background

Desmond Bonhomme and Daniel Tyler brought a proposed class action against Uber Technologies, Inc. They alleged that Uber violated Section 20-1501 and following sections of the New York City Administrative Code by failing to disclose the address where food, beverages, or other goods had to be picked up. According to the allegations, Uber instead showed drivers only a zoomed-out map rather than the actual addresses.

The parties did not dispute that they entered into Uber’s Platform Access Agreement, which contains an arbitration clause. Uber moved to compel arbitration and stay the court proceedings. The plaintiffs argued that the arbitration clause was unconscionable, meaning unfairly imposed or unfair in its terms.

Delegation Clause

The agreement included a delegation clause providing that an arbitrator would decide disputes about the arbitration provision’s interpretation, formation, scope, enforceability, waiver, applicability, revocability, and validity. The plaintiffs argued that this clause was procedurally unconscionable because it appeared in a nonnegotiable contract and was presented without sufficient visual emphasis. Uber responded that the agreement gave the plaintiffs a 30-day opportunity to opt out of arbitration by email.

The court held that Uber had the better argument under both California and New York law. The opt-out provision meant that the arbitration agreement was not adhesive, or imposed on a take-it-or-leave-it basis. The plaintiffs did not claim that they had opted out and did not explain how the delegation clause was procedurally unconscionable despite the opt-out provision. The court therefore did not reach whether the agreement was substantively unconscionable.

Class-Action Waiver

The Platform Access Agreement stated that disputes would be resolved only through individual arbitration and not on a class, collective, coordinated, or consolidated basis. The agreement also provided that a court, rather than an arbitrator, would decide whether the class-action waiver was enforceable.

The plaintiffs argued that the waiver was unconscionable under California law. The court rejected that argument because the opt-out provision gave the plaintiffs a meaningful opportunity to avoid the arbitration provision. The court held that the opt-out provision therefore made the class-action waiver enforceable.

Ruling and Case Status

The court granted Uber’s motion to compel arbitration and stayed the proceedings under the Federal Arbitration Act. The Clerk was directed to administratively close the file. The court expressly stated that the order was not a dismissal or other disposition of the action against any party. It also stated that, if further proceedings became necessary, any party could initiate them as if the order had not been entered.