Sena v. Uber Technologies Incorporated
2:15-cv-02418
D. Ariz.Apr 7, 2016Background
- Plaintiff David Sena worked as an UberX driver in Arizona (Dec 2012–end of 2014) and agreed via the Uber app (clicked “YES, I AGREE”) to the Rasier Software Sublicense & Online Services Agreement, which contains an Arbitration Provision and a Delegation Clause.
- The Arbitration Provision requires individual arbitration, prohibits class/collective/representative actions, and includes an opt-out procedure (30 days by email or mail).
- The Delegation Clause expressly delegates disputes about the interpretation, enforceability, revocability, or validity of the Arbitration Provision to an arbitrator.
- Sena sued in Arizona state court as a putative class action alleging employment-related claims; defendants removed and moved to compel individual arbitration and strike class allegations.
- Sena conceded he assented and did not timely opt out, but argued the Delegation Clause and arbitration agreement are unconscionable (procedurally and substantively), citing Mohamed v. Uber.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether there is "clear and unmistakable" evidence delegating arbitrability to arbitrator | Delegation ambiguous when read in context; Mohamed shows contradictions making delegation unclear | Delegation clause language plainly and expressly delegates arbitrability to arbitrator | Court: Delegation clause is clear and unmistakable; gateway issues delegated to arbitrator |
| Whether Delegation Clause is procedurally unconscionable under applicable law | Agreement is adhesive, oppressive, hidden and driver had no real choice to negotiate or opt out meaningfully | Opt-out is conspicuous and meaningful; clause not hidden; arbitration not mandatory | Court: Not procedurally unconscionable — opt-out prominence and ability to reject defeat adhesion/unfair surprise claim |
| Whether Delegation Clause is substantively unconscionable (fee-splitting / class waiver) | Fee-splitting could impose prohibitive costs; class-waiver is contrary to public policy per Mohamed | No evidence fees would be prohibitively expensive here; FAA preempts rule invalidating class waivers | Court: Not substantively unconscionable — plaintiff failed to show prohibitive costs; class waiver enforceable under FAA |
| Remedy: Stay, compel arbitration, and class allegations | Sena asks court not to compel/arbitrate his claims or to preserve class claims | Defendants seek dismissal/compel arbitration and strike class allegations | Court: Grant motion to compel arbitration, strike class allegations, stay and retain jurisdiction to enforce award; case closed pending arbitration |
Key Cases Cited
- AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011) (FAA preempts state rules that invalidate class-waiver provisions and favors enforcement of arbitration agreements)
- Rent-A-Ctr., W., Inc. v. Jackson, 561 U.S. 63 (2010) (courts enforce clear delegation clauses; delegation separable from contract challenge)
- Dean Witter Reynolds Inc. v. Byrd, 470 U.S. 213 (1985) (FAA mandates district courts to compel arbitration where parties agreed)
- Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440 (2006) (questions about validity of entire contract generally for arbitrator unless challenge is to arbitration clause itself)
- Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp., 559 U.S. 662 (2010) (arbitration agreements enforced according to their terms)
- Momot v. Mastro, 652 F.3d 982 (9th Cir. 2011) (‘‘clear and unmistakable’’ standard for delegating arbitrability; examples of sufficient language)
- Chiron Corp. v. Ortho Diagnostic Sys., Inc., 207 F.3d 1126 (9th Cir. 2000) (court’s threshold questions: validity of arbitration agreement and scope)
- Ticknor v. Choice Hotels Intern., 265 F.3d 931 (9th Cir. 2001) (state contract defenses like unconscionability apply to arbitration clauses)
- Green Tree Fin. Corp.-Ala. v. Randolph, 531 U.S. 79 (2000) (party challenging arbitration must show prohibitive costs to render arbitration unenforceable)