Overton v. Uber Technologies, Inc.

Background

Archie Overton and S. Patrick Mendel sued the California Public Utilities Commission (CPUC), CPUC commissioners, Rasier-CA, LLC, Uber Technologies, Inc., Uber USA, LLC, other Uber-related defendants, and unknown defendants. The plaintiffs alleged that the CPUC’s licensing system for transportation network companies conflicted with federal transportation law and violated their constitutional rights. They also asserted claims against Uber under the Federal Motor Carrier Act and under state law, including breach of contract, fraud, and negligent misrepresentation.

The defendants moved to dismiss the plaintiffs’ amended complaint. The court granted those motions on August 3, 2018, and amended its dismissal order on August 8, 2018. The plaintiffs appealed, and the opinion states that the appeal remained pending. The plaintiffs then moved under Rule 60(d)(3) of the Federal Rules of Civil Procedure to vacate the judgment for fraud on the court.

Legal standard

Rule 60(d)(3) permits a court to set aside a judgment for fraud on the court. The court explained that this remedy requires more than the showing needed for ordinary relief based on fraud. The moving party must establish fraud by clear and convincing evidence. The alleged conduct must involve an intentional and material misrepresentation, together with an unconscionable plan or scheme designed to improperly influence the court. The alleged fraud must threaten the integrity of the judicial process and rise to the level of a grave miscarriage of justice. Mere nondisclosure or perjury, by itself, is insufficient. The court also noted that a party’s failure to discover information through available diligence generally does not constitute fraud on the court.

Plaintiffs’ allegations

The plaintiffs identified four general categories of alleged misrepresentations:

1. Federal funding and transportation requirements. The plaintiffs argued that the defendants failed to disclose obligations connected to the federal Motor Carrier Safety Assistance Program and federal grant funding. The court held that any such omission was merely nondisclosure, not fraud on the court. The plaintiffs also had not shown why they could not have brought the information to the court’s attention earlier.

2. PUCTRA fees. The plaintiffs argued that the defendants misrepresented the CPUC’s authority to charge fees on their gross intrastate fares. They relied on a February 2019 CPUC resolution that set certain fees at zero percent of gross revenue, plus specified quarterly or annual fees. The court found that the resolution did not admit that the CPUC had illegally charged or overcharged fees earlier, and it did not change the court’s prior analysis. The alleged conduct did not show an unconscionable scheme or a grave miscarriage of justice.

3. Uber’s business status. The plaintiffs argued that Uber misrepresented that it was a technology company rather than a motor carrier or broker. The court treated Uber’s statements about the nature of its business as legal argument intended to advance its position. Even assuming an intentional misstatement, the court said that such conduct, standing alone, would not establish fraud on the court.

4. Standing. The plaintiffs argued that the defendants misrepresented whether plaintiffs faced an imminent injury and therefore had standing to sue. The court concluded that these assertions were disagreements about legal arguments and the court’s application of the standing requirement, not fraudulent misrepresentations. The court agreed with the defendants that the plaintiffs’ allegations did not support setting aside the judgment.

Uber’s request concerning future filings

Uber asked the court to warn the plaintiffs that it might issue an order restricting future filings if they continued filing frivolous motions. The court recognized that federal courts have authority to regulate abusive litigation through carefully tailored filing restrictions, but said such orders should be rare. The court did not restrict the plaintiffs’ filing abilities or impose sanctions at that time. It warned, however, that those remedies remained available and cautioned the plaintiffs against filing additional motions that merely attempted to relitigate prior issues.

Disposition

Judge Edward M. Chen denied the plaintiffs’ motion to vacate judgment. The order disposed of Docket No. 103. The court did not vacate the prior judgment, and it did not impose filing restrictions or sanctions in this order.