Antitrust Law Daily Wrap Up, ADVERTISING—N.D. Cal.: Cab company hits roadblock, denied intervention in Uber suit, (Aug 31, 2015)

By Greg Hammond, J.D.

An Orange County taxi cab company could not intervene in a false advertising lawsuit against transportation network company Uber Technologies, Inc. The federal district court in San Francisco denied the cab company leave to file a complaint-in-intervention because (1) the company failed to demonstrate that its interest concerning the subject matter of the action would be inadequately represented by the existing parties and (2) intervention would unnecessarily delay and complicate the case (L.A. Taxi Cooperative, Inc. v. Uber Technologies, Inc., August 27, 2015, Tigar, J.).

A group of 19 corporations and companies that provide taxi services throughout California filed suit against Uber, alleging that its advertising campaign sets forth false and misleading claims concerning the safety of rides on Uber’s “UberX” platform and disparages the safety of taxi rides offered by taxi cab companies. A White and Yellow Cab, Inc. (A TAXI) made a motion for leave to file a complaint-in-intervention, asserting similar false advertising claims under the Lanham Act, California’s Unfair Competition Law (UCL), and California’s False Advertising Law (FAL), as well as claims against the California Public Utilities Commission (CPUC) for: (1) declaratory judgment invalidating a CPUC decision that created a new class of licensing for “Transportation Network Companies,” and declaring it void as unconstitutional; and (2) for denial of A TAXI’s equal protection and due process rights. The plaintiff taxi cab companies opposed the motion and Uber filed a statement of nonopposition.

Intervention as matter of right. The court first denied A TAXI’s motion to intervene as a matter of right. It reasoned that, although the motion was timely and A TAXI has a significantly protectable interest in the false advertising claims that are the subject matter of the litigation, A TAXI’s protectable interest did not extend to the CPUC claims and A TAXI failed to demonstrate its interest concerning the subject matter of the action was inadequately represented by the existing parties. Specifically, the court noted that A TAXI did not claim that the existing plaintiffs are incompetent, have interests adverse to its own, or will fail to advance any specific argument concerning false advertising.

Permissive intervention. The plaintiffs argued that the court should also deny permissive intervention because A TAXI challenges the regulatory authority that allows Uber to operate in California, a complex topic not at issue in the instant false advertising case. The court agreed, finding that the inclusion of A TAXI’s additional claims would necessitate the consideration of extraneous legal and factual issues that the lawsuit would not otherwise invoke, including questions concerning fare calculations, Orange County’s taxi regulations, and the constitutionality of CPUC decision-making regarding Uber. Intervention would therefore unnecessarily delay and complicate the case, and would prejudice the adjudication of the original parties’ rights, the court concluded. The request for permissive intervention was consequently denied.

The case is No. 15-cv-01257-JST.

Attorneys: Benjamin Ernest Shiftan (Pearson Simon & Warshaw, LLP) and Christopher B. Dolan (The Dolan Law Firm) for L.A. Taxi Cooperative, Inc., Administrative Services SD, LLC, All Yellow Taxi, Inc., and American Cab, LLC. Alvin Matthew Ashley (Irell & Manella LLP) for Uber Technologies, Inc., Rasier, LLC, and Rasier-CA, LLC. Maryann Cazzell (Cazzell & Associates) for A White and Yellow Cab, Inc.

Companies: L.A. Taxi Cooperative, Inc.; Administrative Services SD, LLC; All Yellow Taxi, Inc.; American Cab, LLC; Uber Technologies, Inc.; Rasier, LLC; Rasier-CA, LLC; A White and Yellow Cab, Inc.

Cases: Advertising CaliforniaNews