Douglas O'Connor v. Uber Technologies, Inc.
904 F.3d 1087
9th Cir.2018Background
- Multiple putative class actions were filed by current and former Uber drivers alleging misclassification as independent contractors and related wage/expense claims in California (notably O’Connor, Mohamed, Yucesoy, Del Rio).
- District court denied Uber’s motions to compel arbitration, finding arbitration agreements unenforceable (unconscionability, inadequate opt-out notice), and certified large classes for some claims in O’Connor.
- The district court entered injunctive Rule 23(d) orders restricting Uber’s communications and requiring enhanced notice/opt-out procedures for arbitration agreements.
- This court previously reversed the district court on arbitration issues in Mohamed v. Uber, holding delegation clauses and opt-out provisions enforceable and arbitration questions for the arbitrator.
- After Mohamed and the Supreme Court’s decision in Epic Systems, the Ninth Circuit considered consolidated appeals and reviewed whether arbitration orders, class certification, and Rule 23(d) communications orders should stand.
- The panel reversed the district court’s denials of motions to compel arbitration, reversed the class certification orders as premised on the now-invalid arbitration rulings, and reversed the Rule 23(d) orders as moot.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Enforceability of arbitration agreements | Arbitration agreements are unenforceable due to unconscionability and improper notice; classwide opt-out by lead plaintiffs | Arbitration agreements (including delegation clauses and opt-out rights) are enforceable; arbitrability delegated to arbitrator | Reversed denial of motions to compel arbitration; arbitration agreements enforceable as in Mohamed |
| Whether lead plaintiffs could opt out on behalf of class | O’Connor lead plaintiffs constructively opted out for the class (relying on Bickerstaff) | No authority granted them power; FAA preempts state-law rule that would void agreements | Rejected plaintiffs’ argument; Bickerstaff inapplicable and preempted by FAA |
| Validity of class-action waivers under NLRA | Class-action waivers in arbitration agreements violate NLRA and are unenforceable | NLRA does not render class waivers unenforceable; Supreme Court resolved this issue | Rejected plaintiff argument in light of Epic Systems; class waivers enforceable |
| Effect of arbitration rulings on class certification and Rule 23(d) controls | Class certification should remain; district court can redefine class on remand | Class certification premised on unenforceability; must be vacated because arbitrability is for arbitrator | Reversed class certification orders and Rule 23(d) communications restrictions; remand for further proceedings |
Key Cases Cited
- Mohamed v. Uber Techs., Inc., 848 F.3d 1201 (9th Cir. 2016) (arbitrability delegated to arbitrator; arbitration provisions enforceable)
- Epic Sys. Corp. v. Lewis, 138 S. Ct. 1612 (2018) (class-action waiver does not violate NLRA)
- AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011) (FAA preempts state rules that disfavor arbitration agreements)
- CompuCredit Corp. v. Greenwood, 565 U.S. 95 (2012) (courts must enforce arbitration agreements according to their terms)
- Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1 (1983) (strong federal policy favoring arbitration)
- Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213 (1985) (arbitration agreements placed on same footing as other contracts)
- Kilgore v. KeyBank, Nat’l Ass’n, 718 F.3d 1052 (9th Cir. 2013) (standard of review for orders denying motions to compel arbitration)
- Sali v. Corona Reg’l Med. Ctr., 889 F.3d 623 (9th Cir. 2018) (standard of review for class certification decisions)