Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—3d Cir.: Philadelphia taxicab companies unable to obtain preliminary injunction against Uber, (Mar 11, 2016)

By Edward L. Puzzo, J.D.

The Third Circuit U.S. Court of Appeals has affirmed a district court ruling that Checker Cab and other Philadelphia taxicab companies were not entitled to a preliminary injunction against Uber based on claims of unfair competition (Checker Cab of Philadelphia Inc., t/a 215-Get-A-Cab v. Uber Technologies, Inc., March 10, 2016, Smith J.).

Unfair competition. Checker Cab Philadelphia, Inc., 44 other taxicab companies, and a taxicab dispatch company had sought a preliminary injunction against Uber Technologies, alleging that Uber was operating an illegal gypsy cab operation in Philadelphia in violation of state and local cab ordinances, and in doing so took customers away from medallion cabs, causing damage to their business, reputation, and goodwill. On March 3, 2015, the district court denied the motion, finding that plaintiffs failed to show a likelihood of success on the merits and make the clear showing of irreparable harm that was required for a preliminary injunction. Plaintiffs appealed this determination as an abuse of discretion.

The appellate court noted that in the Third Circuit, an injury measured in solely monetary terms could not constitute irreparable harm. In order to demonstrate irreparable harm, the plaintiff must demonstrate potential harm that cannot be redressed by a legal or an equitable remedy. The preliminary injunction must be the only way of protecting the plaintiff from harm, the court stated. Plaintiffs here failed to meet that heavy burden. Accordingly, the court ruled, the lower court did not abuse its discretion in denying Checker's motion for a preliminary injunction.

False advertising. Plaintiffs had also alleged that Uber disseminated false representations about the plaintiffs' insured status and Uber’s comparable fares, in violation of the Lanham Act. Uber had publicized that there was “no guarantee” consumers’ taxicab rides would be insured due to the bankruptcy of the state’s largest taxicab insurer. The plaintiffs alleged that, although the company’s policies were cancelled as of November 2014, the city regulatory authority notified all of the company’s policyholders to obtain replacement coverage by October 2014 and most of Philadelphia’s taxicab drivers obtained replacement coverage by that deadline. Thus, Uber’s statements were literally false, the plaintiffs maintained. On March 7, 2016, the federal district court in Philadelphia ruled that plaintiff taxicab companies had sufficiently pleaded that customers were induced to use Uber’s services by false representations about the insured status of the plaintiffs.

The case is Civil Action No. 15-1834.

Attorneys: Zachary L. Grayson (Salaman, Grayson & Henry) for Checker Cab of Philadelphia Inc., t/a 215-Get-A-Cab. A. Scott Bolden (Reed Smith) for Uber Technologies, Inc.

Companies: Checker Cab of Philadelphia Inc., t/a 215-Get-A-Cab; Uber Technologies, Inc.

Cases: StateUnfairTradePractices Advertising DelawareNews NewJerseyNews PennsylvaniaNews