164 F. Supp. 3d 1165
N.D. Cal.2016Background
- Plaintiff Stewart Rosen, a San Francisco taxicab medallion owner, sued Uber Technologies, Inc., Rasier, LLC, and Rasier-CA, LLC alleging (1) Uber operated outside CPUC rules harming regulated taxi competitors and (2) Uber’s "Safe Rides Fee" and safety representations were false and diverted customers.
- Rosen pleaded claims under the Lanham Act, California False Advertising Law (FAL), Unfair Competition Law (UCL), and intentional and negligent interference with prospective economic relations.
- The CPUC had investigated and issued orders, citations, a rulemaking, and ultimately issued a Transportation Network Company (TNC) permit to Uber’s California subsidiary; some issues were expressly deferred for later CPUC action.
- Defendants moved to dismiss and for judicial notice of public CPUC documents and related filings; the district court granted judicial notice of those materials.
- The court dismissed without prejudice all claims that depend on alleged noncompliance with CPUC regulations under California Pub. Util. Code § 1759(a), dismissed the UCL claims for lack of standing, dismissed FAL claims to the extent they sought restitution, and dismissed interference claims tied to the CPUC allegations or speculative customer relationships.
- The motion to strike was denied; plaintiff was given leave to amend within 14 days.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 1759 bars court review of claims alleging Uber's noncompliance with CPUC rules | Rosen contends he can sue for unfair competition and interference based on Uber's alleged illegal, unregulated conduct | Uber argues judicial resolution would interfere with CPUC's ongoing regulatory proceedings and is barred by § 1759 | Court: Claims based on CPUC noncompliance are barred under § 1759 because they would hinder ongoing CPUC regulatory authority; dismissed without prejudice |
| Standing under UCL (fraud-based false advertising) | Rosen alleges Uber's safety representations diverted customers, injuring his business | Uber contends Rosen lacks UCL standing because he did not plead his own reliance on Uber advertising | Court: Dismissed UCL claims for lack of standing (followed prior L.A. Taxi Order); dismissed without prejudice |
| FAL claims seeking restitution for alleged false advertising | Rosen seeks restitution for lost business caused by Uber's misrepresentations | Uber argues restitution is improper where plaintiff has no ownership interest in defendant's profits | Court: FAL claims seeking restitution dismissed (no vested interest alleged); other FAL claims limited to non-restitution remedies |
| Interference with prospective economic relations | Rosen alleges Uber interfered with his economic relationships with taxi passengers | Uber argues Rosen alleges only speculative, market-wide lost customers (no protected, identifiable relationships) | Court: Interference claims dismissed where based on speculative future customers or CPUC-based theory; leave to amend denied as to claims squarely barred by § 1759 but otherwise without prejudice |
Key Cases Cited
- Lee v. City of Los Angeles, 250 F.3d 668 (9th Cir. 2001) (rule on considering documents referenced in the complaint and judicial notice on motion to dismiss)
- Ashcroft v. Iqbal, 556 U.S. 662 (U.S. 2009) (plausibility standard for pleading)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (U.S. 2007) (Twombly pleading standard)
- San Diego Gas & Electric Co. v. Superior Court (Covalt), 13 Cal.4th 893 (Cal. 1996) (interpretation of § 1759 and when judicial relief would hinder CPUC regulatory programs)
- Kairy v. SuperShuttle Int'l, 660 F.3d 1146 (9th Cir. 2011) (application of Covalt/§ 1759 in federal court context)