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