Capriole v. Uber Technologies, Inc.

Background

John Capriole brought a putative class action for himself and drivers who had worked in Massachusetts for Uber. He alleged that Uber misclassified drivers as independent contractors and failed to pay required minimum wages and overtime under Massachusetts law. His amended complaint also added a claim under Massachusetts’s earned sick-time law. The defendants were Uber Technologies, Inc. and Dara Khosrowshahi, identified as Uber’s president and chief executive officer.

When Capriole began using the Uber application in 2016, he saw a screen stating that he had to review and agree to the listed contracts before going online. He clicked an “I Agree” button and then confirmed his agreement in a pop-up box. The contract included a forum-selection clause requiring disputes not subject to arbitration to be heard exclusively in state or federal courts in San Francisco, California. It also included an arbitration provision, a delegation clause assigning many arbitration-related questions to an arbitrator, and a class-action waiver. Capriole did not opt out of arbitration.

Transfer analysis

The defendants moved to transfer the case under 28 U.S.C. § 1404(a), relying on the forum-selection clause. Capriole argued that his statutory wage claims were outside the clause, that the clause was not reasonably communicated, that the transfer factors favored Massachusetts, and that extraordinary circumstances opposed transfer.

The court applied Massachusetts law, which requires an online forum-selection clause to be reasonably communicated and accepted. It distinguished a First Circuit decision involving an Uber agreement that did not require affirmative acceptance. Here, the court emphasized the capital-letter notice, the opportunity to review the agreement, the requirement that Capriole agree before using the application, and the two affirmative clicks showing assent. The court therefore held that the agreement was reasonably communicated and accepted.

The court also held that the clause covered Capriole’s claims. The clause applied to disputes “arising out of or in connection with” the agreement or Uber services. Because Capriole’s misclassification claims concerned his relationship with Uber and his use of the Uber application as a driver, the court found them sufficiently connected to the agreement and services. The court further stated that the question whether the arbitration provision applied to Uber drivers as transportation workers was covered by the forum-selection clause and should be decided by a court in San Francisco.

Public-interest factors and ruling

Because the court found a valid forum-selection clause, it could consider public-interest factors but not private convenience interests. The court recognized that court congestion and the local Massachusetts interest in the dispute weighed against transfer to some degree. It also concluded, however, that those concerns did not overwhelmingly disfavor transfer, and that the Northern District of California could apply Massachusetts law. The court noted that the California court could reconsider the issue and, if appropriate, return the matter to Massachusetts.

The court also considered Capriole’s pending appeal from an earlier order denying injunctive relief. It concluded that Capriole could timely appeal that order to the Ninth Circuit after transfer.

The court deemed the forum-selection clause valid and enforceable. Judge Indira Talwani allowed the defendants’ Motion to Transfer Venue, denied as moot the defendants’ Emergency Motion for a Stay of All Proceedings Pending Resolution of the transfer motion, and deferred ruling on Capriole’s Emergency Motion for a Preliminary Injunction and Motion for Leave to File a Second Amended Complaint. The clerk was directed to transfer the action to the United States District Court for the Northern District of California.