Ehret v. Uber Technologies, Inc.
68 F. Supp. 3d 1121
N.D. Cal.2014Background
- Plaintiff EHret seeks nationwide class representation for Uber customers who paid a 20% gratuity added to metered fares via Uber's app.
- Plaintiff alleges Uber misrepresented the gratuity as a driver tip and kept a substantial portion as revenue.
- Claims include UCL, CLRA, and breach of contract arising from alleged misrepresentations and withholding of gratuities.
- Uber moved to dismiss all claims under Rule 12(b)(6), arguing lack of standing, extraterritorial issues, and insufficient pleadings.
- Court analyzes whether California law may apply extraterritorially, standing requirements, and sufficiency of UCL/CLRA/breach claims.
- Court grants in part and denies in part Uber’s motion, with UCL and some CLRA claims proceeding and some contract/C LLC issues resolved.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether UCL/CLRA apply extraterritorially | Plaintiff contends claims arise from California-based misrepresentations. | Uber argues extraterritorial application should be denied. | Extraterritoriality denied; claims may proceed if misrepresentations originated in California. |
| Standing under UCL/CLRA | Plaintiff alleges economic injury from paying more due to misrepresentation. | Plaintiff must show lost money or property; unequal to prove. | Plaintiff found to have sufficient economic injury and standing under UCL/CLRA. |
| UCL fraudulent/unfair prongs viability | Misrepresentation of gratuity likely to deceive a reasonable consumer; unfair practices noted. | Searle-type reasoning may render claims immaterial when charges are mandatory. | Plaintiff states claims under both fraudulent and unfair prongs; Searle distinction rejected here. |
| CLRA violations | Uber misrepresented gratuity characteristics and advertising to entice transactions. | Some CLRA subsections not applicable or mischaracterized. | Claims under §1770(a)(5), (a)(9), (a)(14) survive; §1770(a)(13), (a)(16) dismissed. |
| Breach of contract viability | Promissory gratuity remittance to drivers is an enforceable contract term with damages possible. | Drivers are donee beneficiaries; plaintiff cannot recover contract damages. | Breach of contract claim dismissed with prejudice. |
Key Cases Cited
- Sullivan v. Oracle Corp., 51 Cal.4th 1191 (Cal. 2011) (presumption against extraterritoriality applies to UCL)
- In re Tobacco II Cases, 46 Cal.4th 298 (Cal. 2009) (likelihood of deception standard for UCL fraud prong)
- Kwikset Corp. v. Superior Court, 51 Cal.4th 310 (Cal. 2011) (standing under UCL; numerous ways economic injury may be shown)
- McKell v. Washington Mutual, Inc., 142 Cal.App.4th 1457 (Cal. App. 4th 2006) (UCL/fee deception can be actionable even when fees are labeled as mandatory)
- Searle v. Wyndham International, Inc., 102 Cal.App.4th 1327 (Cal. App. 2d 2002) (distinguishes hotel service charges from misrepresented gratuities)
- Cel-Tech Communications, Inc. v. Los Angeles Cellular Tel. Co., 20 Cal.4th 163 (Cal. 1999) (UCL unlawfulness prong and sweep of coverage)
- In re iPhone 4S Consumer Litigation, 2013 WL 3829653 (N.D. Cal. 2013) (California-based misrepresentations may support extraterritorial UCL/CLRA claims)