Brunner, Jr. v. Lyft, Inc.

Background

D. Brunner, Jr. filed an arbitration claim with the American Arbitration Association in February 2019, paid the filing fees, and alleged that Lyft misclassified him as an independent contractor. The arbitration involved Brunner and 106 other drivers represented by the same law firms. The American Arbitration Association divided the claims into five groups, placing Brunner in Group 3.

Lyft did not initially pay the filing fees for Group 3. After reminders and requests for clarification about which group the invoices covered, Lyft and the American Arbitration Association resolved the fee issue. The association sent a renewed invoice on August 21, 2019, and Lyft promptly paid it. Seven days before that invoice was sent, Brunner withdrew his arbitration claim and filed this putative class action.

The Court’s Analysis

Brunner argued that Lyft had defaulted in arbitration, materially breached the arbitration agreement, and waived its right to arbitrate. The court rejected all three arguments.

First, the court held that Lyft had not defaulted. A default under the Federal Arbitration Act involves failing, neglecting, or refusing to arbitrate. Brunner withdrew before the American Arbitration Association suspended or terminated the proceedings, and the Group 3 arbitration was continuing. The court stated that the arbitration administrator was well positioned to decide whether unpaid fees justified ending the arbitration.

Second, the court held that Lyft had not materially breached the arbitration agreement. Although the initial failure to pay could technically have been a breach, the court found that Brunner had not shown harm or delay caused by Lyft. The court relied on evidence that the arbitration schedule for the driver groups meant Group 3 would still have been months away from arbitration even if Lyft had paid immediately.

Third, the court held that Lyft had not waived arbitration. Waiver requires knowledge of the right to arbitrate, conduct inconsistent with that right, and prejudice to the opposing party. Lyft had participated in the arbitration, cooperated with the American Arbitration Association, and had not refused to pay the fees. The court attributed the delay to the association’s administration of the claims, rather than to Lyft’s late payment.

Disposition

The court granted Lyft’s motion to compel arbitration on an individual basis. It dismissed Brunner’s claims without prejudice. The order resolved whether the dispute would proceed in court or arbitration; it did not decide the merits of Brunner’s misclassification allegations.

Judge Vince Chhabria signed the order on November 14, 2019.