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203 F.Supp.3d 393
S.D.N.Y.
2016
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Background

  • Plaintiff Spencer Meyer sued Uber and CEO Travis Kalanick; defendants moved to compel arbitration based on Uber's in-app User Agreement.
  • On July 29, 2016 the district court denied defendants' motions to compel arbitration, finding Meyer lacked reasonably conspicuous notice and unambiguous assent to the User Agreement and its arbitration clause.
  • Defendants filed interlocutory appeals under 9 U.S.C. § 16(a)(1)(B) and moved to stay district-court proceedings pending the Second Circuit's decision.
  • The district court evaluated the stay request under the four-factor Nken standard (likelihood of success, irreparable harm, harm to others, and public interest).
  • The court found defendants failed to make a strong showing of likely success on appeal but did show potential irreparable harm given Congress' authorization of interlocutory appeal of arbitration denials.
  • The court also considered the value of appellate clarification on website contract assent (clickwrap/browsewrap) and therefore granted a stay to take effect August 27, 2016, pending the Second Circuit's decision.

Issues

Issue Plaintiff's Argument Defendant's Argument Held
Whether Meyer was given reasonably conspicuous notice and unambiguously manifested assent to Uber's User Agreement (including arbitration clause) Meyer lacked reasonably conspicuous notice and did not unambiguously manifest assent Meyer was on notice of the User Agreement and thus bound to arbitrate Court held Meyer lacked reasonably conspicuous notice and unambiguous assent, so cannot be compelled to arbitrate
Whether the district court should stay proceedings pending interlocutory appeal of denial to compel arbitration Opposed stay; interest in prompt resolution and prejudice from delay Stay necessary because interlocutory appeal statutory scheme and potential irreparable harm if arbitration right wrongly denied Court granted stay: although defendants unlikely to prevail, statutory posture and irreparable-harm concern favor stay
How to apply Nken stay factors to arbitration-denial appeals Emphasized prejudice to plaintiff from delay Emphasized Congressional judgment in § 16(a)(1)(B) that interlocutory appeal addresses irreparable harm Court found first factor (likelihood of success) not met but second (irreparable harm) met; other factors neutral; granted stay
Whether appellate clarification on clickwrap/browsewrap consent warrants staying district proceedings Sought to proceed without delay; argued stay would prejudice litigation progress Argued Second Circuit guidance will materially affect class/additional-plaintiff issues and case management Court considered value of appellate clarification an additional factor and found it supported granting the stay

Key Cases Cited

  • Virginia Ry. Co. v. United States, 272 U.S. 658 (Sup. Ct. 1926) (stay is an exercise of judicial discretion)
  • Nken v. Holder, 556 U.S. 418 (2009) (articulates four-factor test for stays pending appeal)
  • Hilton v. Braunskill, 481 U.S. 770 (1987) (source of stay-factor formulation quoted in Nken)
  • Specht v. Netscape Commc'ns Corp., 306 F.3d 17 (2d Cir. 2002) (requires reasonably conspicuous notice and unambiguous assent for online terms)
  • AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011) (preemption principles regarding arbitration agreements)
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Case Details

Case Name: Meyer v. Kalanick
Court Name: District Court, S.D. New York
Date Published: Aug 26, 2016
Citations: 203 F.Supp.3d 393; 1:15-cv-09796
Docket Number: 1:15-cv-09796
Court Abbreviation: S.D.N.Y.
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