I. BACKGROUND
A. Factual Background
Because this appeal challenges a trial court order sustaining a demurrer, we draw the relevant facts from the complaint and matters subject to judicial notice.
Uber provides transportation services to the public by connecting consumers to its " 'partner drivers' " through the use of a GPS-enabled smartphone
The CPUC issued a cease and desist letter and citation to Uber, asserting Uber was violating various CPUC rules and regulations. The CPUC also initiated rulemaking (Rulemaking) to determine "whether the CPUC should adopt changes to its regulations pertaining to passenger transportation in light of the emergence of companies with business models such as Uber, Lyft and SideCar." In an effort to resolve the cease and desist letter and citation, thе CPUC and Uber entered into a settlement agreement in which the CPUC agreed to not enforce the outstanding citation against Uber in exchange for Uber's compliance with certain consumer protection conditions. The parties agreed the settlement would govern their interactions pending a final decision by the CPUC in the Rulemaking.
The CPUC thereafter issued a decision, which established a new subset of charter-party carriers known as transportation network companies (TNC's). As part of that decision, the CPUC found UberX
During the course of "Phase II," the CPUC requested information and documents from Uber regarding its operations. The CPUC also continued to evaluate issues impacting the new TNC category. When the CPUC issued its decision on Phase II, it was "still considering whether to require Uber, or any of its subsidiaries, to seek operating authority as a TCP."
B. Procedural Background
1. Uber's First Demurrer
During the CPUC proceedings, plaintiffs filed a complaint against Uber, which they unilaterally amended (FAC), alleging it operated and advertised itself as a public transportation company without the requisite regulatory approvals from the SFMTA or the CPUC. The FAC asserted causes of action for (1) violation of the Unfair Competition Law (UCL; Bus. & Prof. Code, § 17200 et seq. ); (2) intentional interference with prospective economiс relations; (3) negligent interference with prospective economic relations; (4) accounting; and (5) declaratory relief.
Uber filed a demurrer to the FAC. The demurrer primarily focused on the doctrine of judicial abstention. It argued the court should abstain from adjudicating the FAC because it would require the court to "assume the functions" or "interfere with the functions" of the CPUC. Specifically, Uber argued "the Legislature has entrusted the power to regulate the vehicle for hire industry to the CPUC and SFMTA," the claims "depend on a determination that Uber is either a taxi company or a Black Car service. ... [which] lies with the agencies responsible for taxis and Black Cars," and the CPUC is in the process of еvaluating these issues. In support of its argument, Uber referenced the settlement agreement between the CPUC and Uber, which allowed Uber to continue its operations "pending a final decision of the Rulemaking." Uber claimed any consideration of the FAC would "nullify the agency's decision, supplant its regulatory authority, and render its work superfluous."
In opposition, plaintiffs argued the Legislature had already defined "taxis" and "charter-party carriers," and the FAC merely sought to determine whether Uber meets the definition through standard statutory construction. In reply, Uber asserted the CPUC has authority to determine the scope of the "charter-party carrier" definition and its related regulations, and is in the prоcess of doing so. Uber argued the court should defer to that authority.
The trial court overruled Uber's demurrer. The court declined to invoke the doctrine of judicial abstention, holding, "[t]he gravamen of this instant case is statutory interpretation with no regulatory or administrative implications."
Following the issuance of an opinion in a similar matter, Rosen v. Uber Technologies, Inc. (N.D.Cal. 2016)
In opposing the motion, plaintiffs argued Uber "improperly [sought] to re-adjudicate issues that have already been decided in this case." Specifically, plaintiffs asserted
The trial court granted Uber's motion for judgment on the pleаdings. The court noted Uber's motion raised a new issue because "[n]either party argued and neither party cited to California Public Utilities Code section 1759 in the initial demurrer." The court found "the gravamen of Plaintiffs' [complaint] is that Uber is acting as an unlicensed charter-party carrier in violation of [C]PUC regulations or as unlicensed taxicabs violation of SFMTA rules and regulations, thereby damaging the class of taxicab drivers. The [C]PUC is in the rule-making stage regarding Uber's status as a charter-party carrier and has declared that Uber vehicles are not taxicabs. Any award of damages based upon the [complaint] could only be premised upon a finding that Uber vehicles are illegally operating еither as charter-party carriers or as taxicabs-a finding which directly contravenes those of the [C]PUC." As a result, the court concluded "Plaintiffs' allegations directly implicate the [C]PUC's exclusive rulemaking authority," and held it lacked jurisdiction under section1759.
3. Uber's Second Demurrer
Plaintiffs subsequently filed their SAC against Uber. In response, Uber filed a demurrer to the SAC. The parties' arguments in support of and in opposition to the demurrer closely mirrored those raised in Uber's motion for judgment on the pleadings.
Plaintiffs did not file an amended complaint and stipulated to entry of judgment. The trial court subsequently entered judgment, and plaintiffs timely appealed.
II. DISCUSSION
A. Standard of Review
"We review an order sustaining a demurrer de novo to determine whether the complaint states facts sufficient to constitute a cause of action. [Citations.] We construe the complaint 'liberally ... with a view to substantial justice between the parties' [citation] and treat it ' " 'as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law. [Citation.] We also consider matters which may be judicially noticed.' [Citation.] Further, we give the complaint a reasonable interpretation, reading it as a whole and its parts in their context." ' " (
" '[W]hen a plaintiff is given the opportunity to amend his complaint and eleсts not to do so, strict construction of the complaint is required and it must be presumed that the plaintiff has stated as strong a case as he can.' " ( Reynolds v. Bement (2005)
B. Uber's Demurrer to the SAC
Plaintiffs argue Uber's demurrer to the SAC raised "many of the same arguments" as were raised in its prior demurrer, which was overruled. Because of these similarities, plaintiffs claim Uber was required to comply
Section 1008 of the Code of Civil Procedure states: "A party who originally made an application for an order which was refused in whole or part ... may make a subsequent application for the same order upon new or different facts, circumstances, or law." (Id. , subd. (b).)
Plaintiffs cite two cases, Bennett v. Suncloud (1997)
In Le Francois , supra ,
Read together, Bennett and Le Francois stand for the unremarkable proposition that a party cannot seek to dismiss the same claim based on a previously rejected argument without seeking reconsideration. In Bennett , specifically, the defendant improperly sought to raise the same demurrer to causes of action that had not been previously dismissed. ( Bennett , supra , 56 Cal.App.4th at pp. 96-97,
In any event, reviewing courts may consider de novo whether a challenged claim states a cause of action. ( Bennett , supra ,
The trial court held section 1759 barred plaintiffs' claims relating to the operation of UberX vehicles prior to April 7, 2014 and the operation of non-UberX vehicles. The court concluded it "has no authority to make findings as to the legality of Uber's operation of non-UberX vehicles in light of Phase II of the [C]PUC proceedings, which will consider 'Uber's status as a possible TCP.' " Likewise, the court found
1. Section 1759 and Covalt
The CPUC is a state agency of constitutional origin and possesses broad authority to supervise and regulate every public utility in California. ( Cal. Const., art. XII, §§ 1 - 6.) It has the power to "do all things, whether specifically designated in [the Public Utilities Act] or in addition thereto, which are necessary and convenient in the exercise of such power and jurisdiction." (§ 701.) Its powers include setting rates, establishing rules, holding hearings, awarding reparation, and establishing its own procedures. ( San Diego Gas & Electric Co. v. Superior Court (1996)
The Legislature has acted to limit judicial review of CPUC actions. Section 1759, subdivision (a) provides: "No court of this state, except the Supreme Court and the court of appeal, to the extent specified in this article, shall have jurisdiction to review, reverse, correct, or annul any order or decision of the commission or to suspend or delay the execution or operation thereof, or to enjoin, restrain, or interferе with the commission in the performance of its official duties, as provided by law and the rules of court." However, this provision "is not intended to, and does not, immunize or insulate a public utility from any and all civil actions brought in superior court." ( People ex rel. Orloff v. Pacific Bell (2003)
We are not the first court to address the interplay between sections 1759 and 2106 : " Section 2106 and section 1759 address different things. Section 1759 defines and limits the power of courts to pass judgment on, or interfere with, what the commission does. Section 2106, on the other hand, confirms the full power of the courts to pass judgment on what utilities do." ( Cundiff v. GTE California Inc . (2002)
2. Application of Covalt to the SAC
Plaintiffs' SAC focuses on two classes: UberX operations prior to April 7, 2014 and all non-UberX operations.
The gist of plaintiffs' complaint is that Uber was a charter-party carrier, even before the CPUC established the TNC classification. And, as a charter-party carrier, Uber was subject to the same rules and regulations applicable to traditional charter-party carriers and failed to comply with those rules and regulations. In support of their argument, plaintiffs rely heavily on Hartwell , supra ,
Plaintiffs argue this court should reach a similar conclusion-namely, that Uber's liability as a charter-party carrier for past damages would not interfere with the CPUC's prospective regulatory program for TNC's. However, plaintiffs overlook key aspects of Hartwell that undermine their analogy. The Supreme Court discussed Hartwell at length in Orloff , supra , 31 Cal.4th at pages 1146-1148,
The Second and Fourth Appellate Districts have addressed similar issues-i.e., an interpretation of a statutory definition in connection with
In Anchor Lighting v. Southern California Edison Co. (2006)
We also find Rosen , supra ,
In the instant matter, plaintiffs ask this court to determine whether Uber qualifies as a charter-party carrier and what regulations should apply to its operations. This question is far from resolved, and does not seek to apply a "clearly set[ ] out" rule. ( North Star , supra ,
First, the CPUC is actively addressing these questions as to Uber's non-UberX operations in Phase III.B., including: (1) "What is Uber for purposes of determining the full extent of the Commission's jurisdiction"; (2) "Should Uber be considered a Charter-Party Carrier (TCP)"; and (3) "Should any other Uber subsidiary or Uber affiliated business ... be considered a TCP?" The CPUC also is evaluating whether it should "reconsider its determination ... that Uber is not a TNC." As part of this reevaluation, the CPUC is investigating how Uber selects and screens TNC drivers, manages noncompliant drivers, investigates passenger complaints, and calculates fares. And, to the extent plaintiffs challenge Uber's ongoing activities, they ask us to countermand the CPUC's determination that Uber may continue to operate while it completes its Rulemaking.
Second, plaintiffs argue the CPUC has already determined UberX is subject to CPUC regulations and, consequently, should have been subject to those regulations during its entire operations period. We disagree. The CPUC determined UberX's operations qualified as a TNC-a new category created during the initial stage of its Rulemaking. But in making that determination and subsequently issuing a permit to UberX, the CPUC is not "done with [UberX]," as plaintiffs' counsel suggested at oral argument. To the contrary, the CPUC continues to retain regulatory jurisdiction over UberX's operations. The 2014 permit issued to UberX, for example, expressly states, "The requirements and status of your issued TNC permit may change pending determinations the [CPUC] may make in Phase II of Rulemaking 12-12-011." Likewise, UberX's 2017 permit also notes, "The requirements and status of your issued TNC permit may change pending determinations the [CPUC] may make in Rulemaking 12-12-011 or a successor proceeding." These
As discussed above, allowing the SAC to proceed would require the trial court to make factual findings regarding whether Uber falls within the charter-party carrier definition and, if so, which regulations would apply to its operations. A judicial determination on these issues would directly infringe upon the CPUC's ongoing rulemaking in this area. As such, the claims in the SAC are barred by section 1759.
The judgment оf the trial court is affirmed. Defendant Uber Technologies, Inc. may recover its costs on appeal. ( Cal. Rules of Court, rule 8.278(a)(1), (2).)
We concur:
Humes, P.J.
Banke, J.
Notes
All statutory references are to the Public Utilities Code unless otherwise indicated.
On June 28, 2017, Uber filed an unopposed request for judicial notice of 13 documents. At the request of the court, Uber filed a renewed request for judicial notice as to documents one through seven. This renewed request also was unopposed. These documents encompass rulings, submissions, scoping memoranda, and proposed decisions from the ongoing CPUC proceedings. The request also includes a permit issued by the CPUC and the CPUC's docket. We grant judicial notice as to all 13 documents as administrative records of the CPUC. (Evid. Code, § 452, subd. (c) ; Davis v. So. Cal. Edison Co. (2015)
The SAC also contains allegations regarding Uber's failure to obtain appropriate licenses, permits, and approvals from the San Francisco Municipal Transportation Agency (SFMTA) to operate as a taxicab. However, plaintiffs' claims are not based on any violations of SFMTA rules or regulations, so we need not address them here.
UberX is one of several transportation options available through the Uber smartphone application, in which drivers use personal rather than commercial vehicles.
TCP refers to transportation charter-party carriers of passengers, as defined by section 5360.
The trial court also dismissed plaintiffs' false advertising, accounting, and declaratory relief claims. However, plaintiffs have not contested those aspects of the trial court's ruling.
While plaintiffs cite subdivision (a) of Code of Civil Procedure section 1008, they do not suggest Uber requested the court modify or revoke Judge Goldsmith's order in its subsequent demurrer. Rather, plaintiffs argue Uber sought the same order (i.e., dismissal of certain causes of action) previously sought before Judge Goldsmith. Thus, subdivision (b) of section 1008, not subdivision (a), applies.
Plaintiffs do not contest the appropriateness of the court's order granting Uber's motion for judgment on the pleadings. We therefore conclude they have waived any such argument. (Behr v. Redmond (2011)
The trial court ruled section 1759 did not deprive it of jurisdiction to the extent plaintiffs' claims were based on alleged violations of the April 2014 permit. We question whether the trial court needed to reach this holding. While the SAC contains allegations regarding UberX permit violations, the SAC does not assert class claims against UberX for conduct after April 7, 2014 (the date CPUC issued UberX's permit), and plaintiffs' briefs repeatedly state the class claims exclude UberX operations after April 7, 2014. Hоwever, we need not address this issue. Any such error was harmless because the trial court properly dismissed the entire complaint on other grounds. (Berg & Berg , supra ,
Plaintiffs also rely on Orloff , supra ,
We also note plaintiffs' claims as to UberX for the period January 2013 to April 2014 run afoul of the settlement between Uber and the CPUC. That settlement set forth various terms for Uber's continued operations (also presumably applicable to those of UberX). From the time the parties entered into the settlement until UberX received its initial TNC permit, the CPUC exercised its jurisdiction to ensure Uber's compliance with the settlement terms. Any attempt to find UberX in violation of TCP regulations during this period would clearly interfere with the CPUC's regulatory authority.
Plaintiffs also raise two other arguments, which we can summarily dismiss. First, plaintiffs argue Uber cannot raise the jurisdictional bar of section 1759 because it рreviously argued the CPUC lacked jurisdiction. However, the CPUC rejected this argument and asserted jurisdiction. As such, Uber is not a "nonregulated defendant," as argued by plaintiffs. Second, plaintiffs argue the trial court reached its holding by relying on allegations beyond the scope of their SAC-i.e., "the belief that a finding that Uber was a taxicab under the SFMTA regulations would directly conflict with the [C]PUC's finding that Uber was not a taxicab." But this concern is neither stated in the trial court's order on the second demurrer, nor in the referenced section of the order on Uber's motion for judgment on the pleadings. Instead, the trial court only stated the FAC was premised on "violation[s] of the [C]PUC and the SFMTA" and "[t]his Court has no authority to make findings contrary to the Commission as such findings would interfere with and contravene the authority of the [C]PUC."