Cullinane v. Uber Technologies, Inc.
893 F.3d 53
1st Cir.2018Background
- Plaintiffs (four Massachusetts Uber passengers) sued Uber claiming it charged unlawful Massport surcharge and East Boston tolls and sought to represent a class of similarly charged riders.
- Each plaintiff registered for the Uber app on an iPhone between late 2012 and early 2014 and completed a three‑screen registration flow; the final screen prompted payment info and displayed a boxed "Terms of Service & Privacy Policy" link plus the small text "By creating an Uber account, you agree to the."
- The Terms contained a mandatory, AAA‑administered arbitration clause and class‑action waiver; users were not required to open the linked Agreement to complete registration.
- Uber moved to compel arbitration under the Agreement; the district court granted the motion and dismissed the case.
- On appeal the First Circuit considered whether the arbitration clause was enforceable under Massachusetts contract principles for online agreements (applying the Ajemian two‑step test: reasonable communication of terms and unambiguous assent).
- The First Circuit reversed, holding the Terms link and notice were not reasonably conspicuous in the context of the app screens presented, so plaintiffs did not unambiguously assent to arbitration.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a valid, enforceable arbitration agreement existed | Plaintiffs: they never saw or clicked the Agreement link; notice was not conspicuous so no assent | Uber: link and boxed "Terms of Service & Privacy Policy" were visually prominent and reasonably communicated terms; clicking was not required | Held: No — terms were not reasonably communicated; no unambiguous assent, so arbitration clause unenforceable |
| Standard for enforcing online clickthrough/linked terms | Plaintiffs: apply Ajemian—must show reasonable notice and assent in context | Uber: reliance on FAA and general pro‑arbitration policy; app presentation sufficient | Held: Ajemian applies; context and UI design control conspicuousness analysis |
| Whether Massachusetts law or federal law governs contract formation | Plaintiffs: Massachusetts contract law governs formation; FAA does not supply formation rules | Uber: invoked FAA for enforcement but conceded state law for formation | Held: Massachusetts contract law governs formation; FAA applies only after agreement exists |
| Burden of proof to compel arbitration | Plaintiffs: Uber bears burden to show a valid agreement and assent | Uber: must show agreement exists and covers dispute | Held: Uber failed to meet its burden to show reasonable notice and assent |
Key Cases Cited
- AT&T Mobility LLC v. Concepción, 563 U.S. 333 (Sup. Ct.) (FAA reflects strong federal policy favoring arbitration)
- First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938 (Sup. Ct.) (state‑law contract principles govern whether parties agreed to arbitrate)
- Rent‑A‑Center, West, Inc. v. Jackson, 561 U.S. 63 (Sup. Ct.) (arbitration is a matter of contract)
- Ajemian v. Yahoo!, Inc., 987 N.E.2d 604 (Mass. App. Ct.) (online terms enforceable only if reasonably communicated and accepted)
- Meyer v. Uber Techs., Inc., 868 F.3d 66 (2d Cir.) (clarity and conspicuousness depend on interface design and content)
- Specht v. Netscape Communications Corp., 306 F.3d 17 (2d Cir.) (notice and manifestation of assent required for online contract enforcement)