ORDER GRANTING DEFENDANT’S MOTION FOR JUDGMENT ON THE PLEADINGS
Plаintiffs Douglas O’Connor, Thomas Colopy, David Khan, Matthew Manahan, Wilson Rolle, Jr., and William Anderson (“Plaintiffs”) seek to represent a nationwide class of drivers who provide passenger car service for customers who hail them through Defendant Uber Technologies, Inc.’s mobile phone application. They allege that Uber discourages passengers from tipping by falsely advertising that gratuity is included in the fare, even though the full gratuity is not passed along to the drivers. Plaintiffs allege various California statutory and common law causes of action against Uber, specifically breach of implied-in-fact contract, unfair business practices, and interference with prospective economic advantage. This Court has previously granted-in-part and denied-in-part Uber’s motion to dismiss, and afforded Plaintiffs leave to amend. An amended complaint was filed, and Uber has moved for judgment on the pleading as to most of the claims in the first amended complaint.
Having considered the рarties’ briefs and accompanying submissions, as well as the oral argument of counsel, the Court hereby GRANTS Uber’s motion.
I. FACTUAL BACKGROUND
The following allegations are contained in Plaintiffs’ first amended complaint. Plaintiffs are drivers from California, Georgia, and Washington who have participated in the Uber service who bring this action on behalf of a putative class of “Uber drivers anywhere in the United States (other than Massachusetts).” First Amended Complaint (“FAC”) ¶¶ 1, 4-9. Uber provides a service that gives consumers the ability to hail a participating car service driver “on demand” using their mobile phone. Id. ¶¶ 14-15. Plaintiffs allege that Uber advertises on its website (and in its marketing materials) that a gratuity is included in the total cost of the car service and that the customer does not need to provide a tip to the driver. Id. ¶ 16. Sometimes, Uber has advertised the gratuity is a set amount (such as 20%) of the fair charged, while in other instances, the amount of the gratuity is not specified. Id. ¶¶ 19-20.
Uber drivers, including Plaintiffs, operate under a Licensing Agreement with Uber.
This Agreement shall be governed by California law, without regard to thechoice of conflicts of law provisions of any jurisdiction, and any disputes, actions, claims or causes of action arising out of or in connection with the Agreement of the Uber Service or Software shall be subject to the exclusive jurisdiction of the state and federal courts located in the City and County of San Francisco, California.
Id. at 11. Substantively, the Licensing Agreement refers to the drivers as “independent contractors” and not employees. See id. at 7-8. The Licensing Agreement generally describes hоw the fares and fees will be calculated and disbursed, and does not contain any reference to gratuities. Id. at 5-6. Notwithstanding the “independent contractor” label in the Licensing Agreement, Plaintiffs allege they are, in fact, employees as evidenced by the “litany of detailed requirements imposed on them by Uber” and the fact they are “graded, and are subject to termination, based on their failure to adhere to these requirements.” FAC ¶ 24. Included in these requirements are ones regarding their conduct with customers, the cleanliness of their vehicles, the timeliness with which they pick up and deliver customers, and what they are permitted to say to customers. Id. Additionally, Plaintiffs allege that their services are “fully integrated” into Uber’s business of “providing car service to customers.” Id. ¶ 25. Accordingly, as employees, Plaintiffs allege that they are entitled to reimbursed for employment related expenses under California law. Id. ¶¶ 26.
Plaintiffs assert five causes of action in their FAC.
• First, Plaintiffs allege in Count 1 that Uber has tortiously interfered with the prospective economic relationship between drivers and Uber customers by (1) failing to remit all of the collected gratuities to drivers; and (2) informing customers that there was no need to tip drivers. Id. ¶ 38.
• Second, Count 2 asserts that Uber had an implied-in-fact contract with its customers pursuant to which the customers agreed to pay gratuity for the benefit of the drivers and that, by failing to pay the drivers their full gratuity, Uber has violated this agreement. Id. ¶ 39.
• The third cause of action is entitled “Statutory Gratuity Violation (Enforced Through UCL) and alleges that Uber had failed to remit all gratuities to the drivers and therefore violated California Labor Code Section 351, enforceable pursuant to “UCL § 17200.” Id. ¶ 40.
• Fourth, in Count 4 Plaintiffs assert that Uber’s misclassification of drivers as independent contractors and failure to reimburse them for incurred expenses violates California Labor Code Section 2802. Id. ¶ 41.
• Finally, Count 5 alleges unfair competition in violation of California Business and Professions Code § 17200. Specifically Plaintiffs allege that Uber has engaged in “unlawful or fraudulent business acts or practices” by (1) committing the tort of breach of tortious interference with prospective economic advantage; (2) breaching an implied-in-fact contract between Uber and its customers for which the drivers were third-party beneficiaries; and (3) violating California Labor Codes Sections 351 and 2802. Id. ¶ 42.
II. DISCUSSION
A. Legal Standard
Under Federal Rule of Civil Procedure 12(c), “[jjudgment on the pleadings is
While “a complaint need not contain detailed factual allegatiоns ... it must plead ‘enough facts to state a claim to relief that is plausible on its face.’” Id.; see also Lewis v. City & County of San Francisco, No. C 11-5273 PJH,
In the context of ruling on both a Rule 12(b)(6) and Rule 12(c), motion, the Court is generally limited to the contents of the complaint. However, in addition, the Court may consider “documents referenced extensively in the complaint, documents that form the basis of plaintiffs claims, and matters of judicial notice when determining whether the allegations of the complaint state a claim upon which relief can be granted.” Mendelsohn v. Intalco Aluminum Corp., No. C06-0190RSL,
B. . Ubеr’s Motion for Judgment on the Pleadings Is Not an Impermissible Motion for Reconsideration
Plaintiffs argue that the motion for judgment on the pleadings is no more than a disguised motion for reconsideration of this Court’s prior order granting-in-part and denying-in-part Uber’s motion to dismiss Plaintiffs original complaint. Specifically, they contend that Uber’s motion either raises identical arguments already rejected by the Court in reviewing the original complaint or contains arguments that Uber could have, but did not, raise against the original complaint. Because Uber has purportedly failed to meet the standard governing motions for reconsideration (N.D. Civ. Local R. 7-9), Plaintiffs urge to deny Uber’s motion on this ground. The Court disagrees.
Uber’s motion is not one for reconsideration. To be sure, the motion raises arguments that Uber clearly could have made against the Plaintiffs’ original complaint. Further, as will be discussed below, in places the arguments raised are identical. However, Plaintiffs’ argument ignores the fact that they have filеd an amended complaint, thus “supercedfing] the original complaint and render[ing] it without legal effect.” Lacey v. Maricopa Cnty.,
In light of the above, Uber’s motion for judgment on the pleadings is not a motion for reconsideration and the Court will neither deny the motion on this ground nor apply the more stringent motion for reconsideration standard in еvaluating Uber’s arguments.
C. Plaintiffs Have Failed to State a Claim for Interference with Prospective Economic Advantage
In its prior order regarding Uber’s motion to dismiss, the Court set forward the essential elements for the tort of interference with prospective economic advantage under California law. Specifically, Plaintiffs must properly allege (1) an economic relationship between the plaintiff and some third party, with the probability of future economic benefit to the plaintiff; (2) defendant’s knowledge of the relationship; (3) the defendant’s intentional acts designed to disrupt the relationship;' (4) actual disruption of the relationship; and (5) economic harm to the plaintiff proximately caused by the defendant’s acts. See Reeves v. Hanlon,
Uber challenges Plaintiffs’ tortious interference claim on a number of bases. First, they allege that Plaintiffs have failed to allege an “independently wrongful act.” Second, they assert that there was no existing economic relationship with which Uber could have interfered. Finally, Uber contends that because it was not a “stranger” to the relationship between Plaintiffs and Uber customers, it could not, as a matter of law, have tortiously interfered. For the following reasons, the Court finds that Plaintiffs have failed to allege interference with an existing economic relationship. Accordingly, the Court need not reach Uber’s other arguments.
In its prior order, the Court rejected Uber’s argument that Plaintiffs had failed
These newly cited cases, unlike Pardi, do expressly note that the “relationship” that forms the basis of the intentional interference tort must have existed at the time of the allegedly tortious conduct. In Roth v. Rhodes,
In the primary case relied upon by Uber, Westside Center Associates v. Safeway Stores 23, Inc.,
In Silicon Knights, Inc. v. Crystal Dynamics, Inc.,
The complaint does not allege that Silicon Knights was in the midst of negotiations with 3DO, Microsoft, or any other publisher, and that the third party pulled out of the negotiations or awarded business to another because of these alleged acts by Defendants. Moreover, allegations that Defendants’ undisclosed statements caused potential customers not to buy Silicon Knights’ video game software asserts the type of speculative economic relationship disapproved of in West[side ].
Id. The court then found that “[e]ven if interference with potential customers” was a legitimate basis for the tort, plaintiffs allegations were wholly conclusory. Id.
Thus, interference with potential customers with whom the plaintiff did not hаve an existing relationship generally is not sufficient to state a claim. To be sure, in some ways, the instant action is distinguishable from the cases cited above. Westside and Silicon Knights involved situations where the defendants did not have any knowledge of any prospective relationships and, as a result, the interfering conduct went out to an undefined, undifferentiated market that may have included some of the plaintiffs’ potential customers. In the case at bar, Plaintiffs suggest the alleged interfering conduct — representations made that gratuities were included in the cost of Uber’s service — were directed at a defined universe — Uber app users. However, even if such a scenario would satisfy the existing relationship requirement (construed to encompass relationships of one defined group to another), the advertising in this case was in fact directed at the market generally and was not confined to those who had already signed up for the Uber app.
Louisiana Pacific Corp. v. James Hardie Building Products, Inc., No. C-12-3433 SC,
As in Louisiana Pacific, at the time of the interfering conduct in this case — the alleged misrepresentations regarding the payment of gratuities to drivers — the Plaintiffs did not havе an “existing relationship” with their customers. Rather, they had a “speculative economic relationship” or a “hope of future transactions.” Rheumatology Diagnostics Lab.,
At the hearing, the Plaintiffs asserted that the alleged act of interference could be construed not simply as making the misrepresentation, but Uber’s failure to remit the gratuities once the customers’ payments were made. This act, unquestionably, occurred after the relationship between customer and driver had been formed. The alleged interference in this case can be seen as a transitional act — it started with the misrepresentation and was consummated with the failure to remit the entire gratuity to the driver. However, without the alleged representation (which occurred before the relationship was created), the withholding of the alleged “gratuities” would not have been wrongful. Therefore, in this case, an essential element of the alleged interference occurred prior to the creation of any business relationship; it is also the focal point of Plaintiffs’ interference claim, and thаt is the act by which the timing of the interference should be measured.
Because this relationship did not exist at the time of the alleged interference, Plaintiffs’ tortious interference claim must be DISMISSED.
D. Plaintiff's Have Failed to State an Implied-in-Fact Claim
As this Court previously recognized, a “contract implied in fact ‘consists of obligations arising from a mutual agreement and intent to promise where the agreement and promise have not been expressed in words.’” Retired Employees Ass’n of Orange Cnty., Inc. v. Cnty. of Orange,
Plaintiffs’ breach of implied-in-fact contract cause of action is based on allegations that Uber had an implied-in-fact contract with its customers “pursuant to which the customers pay gratuity for the benefit of the drivers” — a contract that was breached when Uber failed to remit to the drivers the total gratuity amount. FAC ¶ 39. Plаintiffs further allege that they, and the other Uber drivers, are third-party beneficiaries of this contract and have suffered as a result of Uber’s breach of this contract. Id. In. its prior order, this Court found that Plaintiffs had adequately spelled out the “circumstances upon which it is plausible that the parties intended Uber to collect passenger gratuities through fare payments and that the parties intended the drivers to be third-party beneficiaries of the gratuities.” O’Connor,
Uber now contends, however, that there is “judicially noticed evidence in the record” of an express contract between Uber and customers covering this subject matter — namely, the “User Terms and Conditions” to which customers agreed prior to using the Uber application — and that these Terms and Conditions foreclose implied contractual relief. Uber asserts that three aspects of the Terms and Conditions are relevant. First, the Terms and Conditions contain a “Payment terms” section which provides, in relevant part:
Any fees which the Company may charge you for the Software or Service are due immediately and are non-refundable. This no refund policy shall apply at all times regardless of your decision to terminate your usage, our decision to terminate your usage, disruptiоn caused to our Software or Service either planned, accidental or intentional, or any reason whatsoever. The Company reserves the right to determine final prevailing pricing — Please note the pricing information published on the website may not reflect the prevailing pricing. ... The Company may change the fees for our Service or Software as we deem necessary for our business. We encourage you to check back at our website periodically if you are interested about how we charge for the Service of [sic] Software.
Docket No. 117-2, at 3. Second, the Terms and Conditions contain a “Limitation of Liability” section which provides, in relevant part:
THE COMPANY AND/OR ITS LI-CENSORS SHALL NOT BE LIABLE FOR ANY LOSS, DAMAGE OR INJURY WHICH MAY BE INCURRED BY YOU, INCLUDING BY [sic] NOT LIMITED TO ... ANY RELIANCE PLACED BY YOU ON THE COMPLETENESS, ACCURACY OR EXISTENCE OF ANY ADVERTISING
Id. at 5. Finally, the Terms and Conditions have an integration clause which pro
The Court finds that, as alleged, Plaintiffs have failed to state a claim for breach of implied-in-fact contract. Plaintiffs’ claim rests on the argument that by misrepresenting in advertising to customers that Uber would remit gratuities to the Drivers, Uber had created an implied in fact contract that they would, in fact, do so. However, such a claim would be in direct conflict with the waiver of reliance on advertising expressly contained in the Terms and Conditions.
Accordingly, the purported implied contract encompasses the same subject (Uber’s advertising) and requires a result contrary to that required by the Terms and Conditions of thе express contract — a result not allowed by California law of contracts. See Tollefson,
Uber’s motion for judgment on the pleadings as to Plaintiffs’ implied-in-fact contract claim is GRANTED.
E. Plaintiffs’ Failure to Allege Actual Reliance Is Fatal to Their UCL Claim Under the “Fraudulent” Prong but Does Not Affect Its “Unlawful” Prong Claim
Plaintiffs base their UCL claim under the UCL’s “unlawful” and “fraud” prongs. Specifically, Plaintiffs allege:
Defendant’s conduct constitutes unlawful or fraudulent business acts or practices, in that Defendant has committed the tort of tortious interference with prospective economic advantage, breached implied-in-fact contracts with customers for whom the drivers are third party beneficiaries, and have violated California Labor Code Sections 351 and 2802.
FAC ¶42. Uber seeks to have the UCL claim dismissed to the extent it is based on alleged misrepresentations insofar as Plaintiffs has failed to properly allege reliance. Docket No. 116, at 6; see also Docket No. 128, at 10 (“In its opening memorandum, Defendant argued that the FAC failed to state a UCL claim under the ‘fraudulent’ prong or, to the extent predicated on alleged misrepresentations' in Defendant’s advertising, under the ‘unlawful’ prong because Plaintiffs did not and could plead their own reliance on the alleged misrepresentations.”).
The fraudulent prong of the UCL does not require a plaintiff to establish the elements of the common law tort of fraud; rather, a “fraudulent business practice is one that is likely to deceive members of the public.” Morgan v. AT & T Wireless Servs., Inc.,
In light of this precedent, courts have recognized that UCL fraud plaintiffs must allege their own reliance — not the reliance of third parties — to have standing under the UCL. For example, in ZL Technologies v. Gartner, Inc., No. CV 09-02393 JF (RS),
This claim is problemаtic. First, the Court has dismissed Plaintiffs’ tortious interference claim, rending this argument moot. Second, even if the tortious interference claim still existed, it would be a claim that “sounded in fraud;” it would therefore require pleading “actual reliance” whether asserted under the fraudulent prong under the UCL or as predicate unlawfulness under the unlawful prong. Courts have recognized that Tobacco II ’ s “actual reliance” requirement “applies equally to the ‘unlawful’ prong of the UCL when the predicate unlawfulness is misrepresentation and deception.” See Swearingen v. Pacific Foods of Oregon, Inc., No. 13-CV-04157-JD,
For the foregoing reasons, the Court will DISMISS Count 5 to the extent it purports to assert a claim under the fraudulent prong of the UCL.
The Court finds, however, that the lack of pleading “actual” reliance does not affect Plaintiffs’ ability to state a UCL claim under the “unlawful” prong as to those unlawful acts not predicated on misrepresentation. Here, Plaintiffs have disclaimed any intention of relying on alleged misrepresentations as the basis for an unlawfulness claim and Plaintiffs’ remaining predicate claims (besides, e.g., the tortious interference claim which is based on fraud) allege statutory Labor Code violations. Accordingly, the remaining UCL unlawful claim does not sound in fraud and, therefore, does not require a showing of actual reliance. While Plaintiffs’ UCL claim under the fraudulent prong will be dismissed, this does not affect Plaintiffs’ claim under the “unlawful” prong based on statutory violations.
F. The California Laws Upon Which Plaintiffs Rely Do Not Apply Extra-Territоrially
Finally, Uber seeks to have Plaintiffs’ FAC dismissed to the extent that it seeks to apply California law to Plaintiffs Rolle and Anderson or any putative class members who reside and provide transportation services outside California. Docket No. 116, at 26. Plaintiffs oppose Uber’s motion on this ground, asserting that (1) the California laws at issue in this case do not contain geographical limitations and (2) any presumption against extraterritorial application of these laws is overcome by
Under California law, a presumption exists against the extraterritorial application state law. In Sullivan v. Oracle Corp.,
However far the Legislature’s power may theoretically extend, we presume the Legislature did not intend a statute to be “operative, with respect to occurrences outside the state, ... unless such intention is clearly expressed or reasonably to be inferred from the language of the act or from its purpose, subject matter or history.”
Id. at 1207,
The Court’s prior order rested on a fundamental mis-reading of Gravquick. The relevant portion of the Gravquick held:
If a state law does not have limitations on its geographical scope, courts will apply it to a contract governed by that state’s laws, even if parts of the contract are performed outside the state. When a law contains geographical limitations on its application, however, courts will not apply it to parties falling outside those limitations, even if the parties stipulate that the law should apply.
Gravquick,
Moreover, a contractual choice of law provision that incorporates California law presumably incorporates all of California law — including California’s presumption against extraterritorial application of its law. See Wright v. Adventures Rolling Cross Country, Inc., No. 12-cv-0982-EMC, Docket No. 22, at 6 (N.D. Cal. May 3, 2012) (“[E]ven if the provision identified by Plaintiffs were a choice-of-law provision, there is nothing to indicate that the parties intended to incorporate only portions of California law and exclude the incorporation of California law’s presumption against extraterritoriality.”); see also Cotter v. Lyft, Inc.,
Accordingly, the Court concludes that the choice-of-law provision in the Licensing Agreement does not overcome the presumption against extra-territorial application of California law absent an indication that such a presumption does not apply. The relevant question, therefore, is whether there is a discernible legislative
Here, there are indications in the legislative history of the Labor Code which support a finding that the California legislature did not intend Sections 351 or 2802 to apply extraterritorially. First, California’s presumption against extraterritorial application of its laws dates back to at least 1916. In North Alaska Salmon Co. v. Pillsbury, the California Supreme Court expressly spoke of the “presumption that [the legislature] did not intend to give its statutes any extraterritorial effect.”
Second, the legislature has, in other Labor Code provisions, expressly provided for extraterritorial application. For example, in Tidewater Marine Western, Inc. v. Bradshaw,
Accordingly, the Court concludes that, the Labor Code violations upon which Plaintiffs rely do not apply extraterritorially and, therefore, cannot apply to those Plaintiffs or unnamed class members who worked in states other than California. See, e.g., Cotter,
The Court reaches a similar result with regards to Plaintiffs’ UCL claim. As the California Supreme Court held in Sullivan, “[n]either the language of the UCL nor its legislative history provides any basis for concluding the Legislature intended the UCL tо operate extraterritorially. Accordingly, the presumption against extraterritoriality applies to the UCL in full force.” Id. at 1207,
G. Plaintiffs’ “Statutory Gratuity Violation” Claim (Count III) Will Be Dismissed
Plaintiffs third cause of action is entitled “Statutory Gratuity Violation” and provides, in its entirety: “Defendant’s conduct, as set forth above, in failing to remit all gratuities to the Uber drivers constitutes a violation of California Labor Code Section 351. This violation is enforceable pursuant to UCL § 17200. Plaintiffs previously conceded, and this Court held, that “there is no private right of action under section 351.” O’Connor,
III. CONCLUSION
For the foregoing reasons, Uber’s motion for judgment on the pleadings is GRANTED. Plaintiffs’ implied contract and tortious interference with prospective economic advantage claims are DISMISSED with prejudice. Plaintiffs’ “Statutory Gratuity Violation” cause of action is DISMISSED with prejudice as superfluous. Plaintiffs claim under the UCL is DISMISSED with prejudice to the extent it is based on the UCL’s fraudulent prong.
This order disposes of Docket No. 116.
IT IS SO ORDERED:
Notes
. For these latter instances, Plaintiffs allege that it is “customary in the car service industry for customers to leave approximately a 20% gratuity for drivers" and, as a result, where the amount of gratuity was not specified by Uber, a reasonable customer would have assumed the gratuity was "in the range of 20% of the total fair.” Id. ¶ 21.
. This Court has previously granted Uber’s motion to take judicial notice of the Software License and Online Services Agreement with Driver Addendum.. See O'Connor v. Uber Techs., Inc., No. C-13-3826 EMC,
. Of course, as Judge Koh recognized in Bru-ton, to the extent a defendant simply chooses to rehash arguments the court had previously rejected, it is likely they will "fare little better” than they did when originally raised. Id. In light of this, it will be a rare case where it will be an efficient use of an attorneys’ time— not to mention his client's money — to raise identical arguments already rejected.
. Uber requests that this Court take judicial notice of three versions of the Terms and Conditions, representing the versions that were in force during the class period. Uber additionally relies on the "incorporation by reference” doctrine which holds that when a "plaintiff's claim depends on the contents of a document, the defendant attaches the document to its motion to dismiss, and the рarties do not dispute the authenticity of the document, even though the plaintiff does not explicitly allege the contents of that document in the complaint, the court may consider that document when ruling on a motion to dismiss or motion for judgment on the pleadings. See Knievel v. ESPN,
Plaintiffs failed to object to Uber’s request for judicial notice, and, in their opposition, made arguments based on the substance, of the Terms and Conditions. At the hearing, Plaintiffs continued to state that they had no reason to dispute the authenticity of the documents but appeared to argue that the Court should not consider them at the motion to dismiss. Given the availability of the Terms and Conditions on Uber's website, and Plaintiffs’ failure to timely object to or oppose the request for judicial notice or challenge the authenticity of the documents, the Court will GRANT the request for judicial notice and consider the Terms and Conditions documents.
. Plaintiffs have not argued that the terms of the waiver are a valid part of the contract between Uber and its customers.
. The same principle governs normal fraud-based claims (i.e., claims asserting fraud out
. While Gravquick upheld the extra-territorial application of the California Equipment Dealers Act ("CEDA'') through a contract that contained a California choice-of-law provision, it did so on the ground that (1) there was no “express geographical limitation” in the CEDA and (2) there was "significant evidence” that the California legislature intended to permit extra-territorial application of the CEDA. Specifically, the Court found significant the fact that the bill that eventually became CEDA had originally defined "equipment dealers” to only encompass those "in this state.” This language was removed, and the court found that the "removal is a strong indication that the legislature did not intend strictly to limit the CEDA’s application to dealers located in California.” Id. at 1223. As discussed in the text below, the California Labor Code sections at issue do not evidence a similar legislative intent to permit еxtraterritorial application.
Further, in previously addressing this question, this Court noted the lack of "any express geographical limitations in the laws at issue which preclude the parties’ agreement to apply California law extraterritorially.” O’Connor,
. Plaintiffs cite the recent opinion from the Supreme Judicial Court of Massachusetts in which the court, relying on Gravquick stated: "Given that the parties agreed to construe the contract in accordance with Massachusetts law, that there is no express limitation on the territorial reach of the Massachusetts independent contractor statute, and that there is no apparent reason to disregard the parties’ choice of law, we conclude that the Massachusetts independent contractor statute applies to the plaintiffs’ misclassification claim.” Taylor v. Eastern Connection Operating, Inc.,
. Because the only remaining claims in this suit are those that apply only within California (the California statutory claims and the UCL claims predicated thereon), the Court recognizes this could limit the scope of the Court’s order regulating Uber's ability to communicate with class members (Docket Nos. 60, 99). However, because this order has been appealed, the Court does not have jurisdiction to consider any modification of it. Cf. Small v. Operative Plasterers’ & Cement Masons' Int’l Ass’n Local 200,