uber-app
Uber made it clear that users were agreeing to terms and conditions, including the waiving of a jury trial in favor of arbitration, when they downloaded and used the app, the U.S. Court of Appeals for the Second Circuit ruled Thursday.
The decision represents a big win for not only the ride-hailing company, but for creators of online and mobile technologies watching to see how their user agreements would remain valid.
The appellate panel of Judges Reena Raggi, Denny Chin and Susan Carney vacated and remanded an earlier decision by U.S. District Judge Jed Rakoff of the Southern District of New York. Rakoff had previously allowed a class action suit against Uber Technologies Inc. and its former CEO Travis Kalanick to proceed after a user claimed third-party drivers were illegally fixing prices.
Rakoff dismissed the technology company's move to compel arbitration based on its terms and services agreement that the lead plaintiff, Spencer Meyer, had agreed to use the app. The notice was not reasonably conspicuous and Meyer did not unambiguously agree to the terms when he registered, the district court found.
The panel disagreed. Uber's app design, they said, made it clear that proceeding to use the app meant agreeing to terms and conditions based on California state law. The terms of service were made clear and though it required the clicking of a hyperlink to review them, the panel found that the use of clear language that creating an account with Uber meant agreeing to the terms was sufficient. When doing so, the user is signaling that their acceptance of the benefit of registration would be subject to contractual terms.
While it may be the case that many users will not bother reading the additional terms, that is the choice the user makes; the user is still on inquiry notice, the panel wrote.
The panel said that while Meyer's assent to arbitration was not express[ed], he nonetheless did so unambiguously. A reasonable user of a smartphone and downloaded applications would know that by clicking the registration button, he was agreeing to the terms and conditions accessible via the hyperlink, whether he clicked on the hyperlink or not.
The panel found that there was no need to remand the case back to the district court for retrial, since, as a matter of law, that Meyer agreed to arbitrate his claims with Uber.
The panel did, however, send back to Rakoff an alternative argument raised by Meyer that Uber's active defense of his suit represented a waiver of the terms.
When the party seeking arbitration has participated in litigation regarding the dispute, the district court can properly decide the question of waiver, the panel stated.