214 F. Supp. 3d 179
E.D.N.Y2016Background
- Two NYC black-car companies (XYZ and Elite) sued Uber alleging false advertising under the Lanham Act and New York GBL, false association, and tortious interference with their relationships with drivers. The case reached the district court on Uber’s Rule 12(b)(6) motion to dismiss.
- Plaintiffs’ Lanham Act/GBL claims rest entirely on statements and blog posts on Uber’s website about safety, background checks, and referring to drivers as “partners.”
- Plaintiffs assert Uber’s background-check claims are false because Uber does not require fingerprints, medical clearances, or drug tests as the NYC TLC does, and that the “partner” terminology misleads customers about legal affiliation.
- Plaintiffs allege some of their drivers use plaintiff-owned cars bearing plaintiffs’ service marks when accepting Uber rides, causing consumer confusion and false association.
- Plaintiffs allege Uber induced drivers to violate employment terms, interfering with contractual and prospective business relations.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| False advertising — safety statements (including background checks) | Uber’s safety and background-check statements are literally false or misleading (not as rigorous as claimed) | Statements are puffery or qualified; site disclaims local variance; in NYC Uber follows TLC requirements | Dismissed — statements are nonactionable puffery or qualified true statements when read in context |
| False advertising — statements calling drivers “partners” | Calling drivers “partners” falsely implies legal affiliation/agency/ liability, misleading consumers | “Partner” is advertising euphemism, not a legal term indicating vicarious liability | Dismissed — term is non-actionable ad-speak; complaint lacks plausible allegation customers interpret it as legal partnership |
| False association (use of plaintiffs’ service marks) | Cars bearing plaintiff marks plus Uber logo create an impression of affiliation | When a plaintiff’s driver uses the plaintiff’s mark, it is the driver, not Uber, who is using the mark | Dismissed — plaintiffs fail to plead Uber’s use of plaintiffs’ marks in commerce |
| Tortious interference with contract/business relations | Uber induced drivers to breach terms and to work for Uber, interfering with plaintiffs’ relationships | Persuasion and offers of better terms are lawful competition; agreements are at-will so no contract claim | Dismissed — contracts are at-will (no viable interference-with-contract); allegations do not show the independent wrongful or tortious conduct required for interference with prospective relations |
Key Cases Cited
- Chambers v. Time Warner, Inc., 282 F.3d 147 (2d Cir. 2002) (court may consider documents integral to complaint on motion to dismiss)
- ONY, Inc. v. Cornerstone Therapeutics, Inc., 720 F.3d 490 (2d Cir. 2013) (state law false-advertising claims align with Lanham Act standards)
- Tiffany (NJ) Inc. v. eBay Inc., 600 F.3d 93 (2d Cir. 2010) (two theories of Lanham Act false-advertising: literal falsity or likely-to-mislead)
- Time Warner Cable, Inc. v. DIRECTV, Inc., 497 F.3d 144 (2d Cir. 2007) (puffery doctrine and materiality requirement in false-advertising claims)
- Lipton v. Nature Co., 71 F.3d 464 (2d Cir. 1995) (subjective, unverifiable product claims constitute puffery)
- Castrol Inc. v. Pennzoil Co., 987 F.2d 939 (3d Cir. 1993) (puffery is exaggerated, vague, commendatory language not actionable)
- Guard-Life Corp. v. Parker Hardware Mfg. Corp., 50 N.Y.2d 183 (N.Y. 1980) (persuasion and offers of better terms are lawful; tortious interference requires wrongful means)
- Carvel Corp. v. Noonan, 3 N.Y.3d 182 (N.Y. 2004) (tortious interference with prospective relations generally requires independently tortious or criminal conduct)