58 F. Supp. 3d 989
N.D. Cal.2014Background
- Plaintiffs are Uber drivers in CA, GA, and WA seeking class action on behalf of US drivers (except MA).
- Uber advertises gratuity included in fare; Plaintiffs allege full gratuity not remitted to drivers.
- Plaintiffs allege an implied customer contract for gratuities benefiting drivers and misclassification as independent contractors.
- Lawsuit asserts CA law claims: breach of implied-in-fact contract, unfair competition, and interference with prospective economic advantage.
- Licensing Agreement labels drivers as independent contractors; governing law is CA, with San Francisco courts as venue; plaintiffs allege reimbursement of work expenses and fringe benefits were improperly handled.
- Court grants Uber’s motion to dismiss claims based on the amended complaint and addresses extraterritoriality and contract theories as dispositive.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Interference with prospective economic advantage viability | Plaintiffs allege existing economic relationships with Uber customers were disrupted by misrepresentations and gratuity non-remittance. | Uber contends no existing relationship existed or acts were not independently wrongful. | DISMISSED for lack of an existing, independently wrongful economic relationship. |
| Implied-in-fact contract viability | Plaintiffs claim customers impliedly contract for gratuities benefitting drivers; third-party beneficiaries exist. | Express Terms/Customer contracts foreclose implied-in-fact contract claims. | GRANTED for implied-in-fact contract claim; third-party beneficiary theory fails. |
| UCL reliance standing (fraudulent prong) | Uber misrepresentations harmed Plaintiffs via customer reliance; Plaintiffs rely on customers’ reliance. | Standing requires Plaintiffs’ own actual reliance; third-party reliance is insufficient. | Count 5 dismissed to the extent based on fraudulent prong; unlawful prong survives where predicated on statutory violations. |
| Extraterritorial application of CA law | California statutes apply to out-of-state drivers; choice-of-law clause may extend CA law. | Gravquick permits extraterritorial application with CA choice-of-law; but CA law not intended to apply extraterritorially. | CA Labor Code §§ 351, 2802 do not apply extraterritorially; claims outside CA cannot rely on these provisions. |
| Redundancy of Statutory Gratuity Violation (Count III) in light of UCL predicate | Count III supports UCL predicate of §351 violations. | Count III redundant; separate count unnecessary. | Count III dismissed as superfluous; UCL predicate remains possible. |
Key Cases Cited
- Gravquick A/S v. Trimble Nav. Int’l Ltd., 323 F.3d 1219 (9th Cir. 2003) (choice-of-law effects; geographic limitations limit extraterritoriality)
- Reeves v. Hanlon, 33 Cal.4th 1140 (Cal. 2004) (elements of interference with prospective economic advantage; independently wrongful act)
- Westside Center Assocs. v. Safeway Stores, Inc., 42 Cal.App.4th 507 (Cal. Ct. App. 1996) (existing relationship required for interference claim)
- Sullivan v. Oracle Corp., 174 Cal.Rptr.3d 237 (Cal. Sup. Ct. 2011) (Cal. 2011) (presumption against extraterritorial application; standing under UCL)