Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—S.D. Cal.: Class certification granted in action over Uber’s unfair business practices, (Dec 3, 2015)

By Linda O’Brien, J.D., LL.M.

The federal district court in San Francisco has granted class certification to a class of consumers in their unfair and unlawful business practices claims against ridesharing service Uber Technologies, Inc. for allegedly misrepresenting that it charged an additional fee above the metered rate for each ride as a gratuity for the driver while retaining a substantial portion of the fee as a revenue source. Thus, the proposed class sufficiently satisfied the prerequisites of Federal Rule of Civil Procedure 23(a) and (b)(3) (Ehret v. Uber Technologies, Inc., December 2, 2015, Chen, E.).

Uber allows consumers to arrange for taxi cab rides electronically through an application on their mobile phones. The app also allows consumers to make payments with their credit card information. Caren Ehret used Uber’s app to arrange for a taxi cab ride in September 2012.

In January 2014, Ehret filed a class action suit against Uber, alleging claims under California’s Unfair Competition Law (UCL) and Consumer Legal Remedies Act (CLRA). Specifically, Ehret asserted that Uber charged a 20 percent fee above the metered fare for each ride, misrepresenting the charge as a gratuity that was automatically added for the driver. However, Ehret alleged, a substantial portion of the fee was retained by Uber as an additional revenue source. In September 2014, the court denied Uber’s motion to dismiss. Subsequently, the plaintiff moved for class certification.

Proposed class. In granting the plaintiff’s motion in part, the court certified a class of persons “who received Uber’s email with the representation that the 20% charge would be gratuity only, who then arranged and paid for taxi rides through Uber’s service from April 20, 2012 to March 25, 2013.” First, the court determined that the plaintiff’s proposed class sufficiently satisfied the prerequisites of Federal Rule of Civil Procedure 23(a). The class was ascertainable and so large that joinder of all members was impracticable. The plaintiff demonstrated that there were common questions of law or fact—whether Uber represented that the 20 percent additional charge was gratuity only. Furthermore, the claims of the class were typical of those of the class and the named class representative would fairly and adequately protect the interests of the class.

Predominance. The court also found that common questions of law or fact predominate over any questions affecting only individual members regarding the UCL claims. Uber’s argument that a UCL claim requires that members of the proposed class be exposed to the alleged false advertising and the plaintiff’s class includes individuals who were never exposed to any representation about the 20 percent charge was rejected. According to the court, there was a uniform and consistent misrepresentation throughout the class period regarding the 20 percent gratuity on Uber’s website, blog, and email message.

However, since the plaintiff could not show that Uber advertised the 20 percent gratuity in a manner that almost every class member had been exposed to the misrepresentation, the court certified a class of persons who received the emails advertising the taxi service which included the alleged misrepresentation regarding the 20 percent charge. Unlike the website, the email messages heavily promoted the uberTAXI service and featured bullet points expressly stating that the 20 percent gratuity would be charged to the rider.

Similarly, the predominance requirement was satisfied for the plaintiff’s CLRA claim for the limited class identified by the court. Although the CLRA claim required an additional showing of reliance, reliance could be established on a class-wide basis by materiality, the court concluded.

The case is No. 3:14-cv-00113-EMC.

Attorneys: Hall Adams, III (Law Offices of Hall Adams LLC) for Caren Ehret. Amit B. Patel (Quinn Emanuel Urquhart & Sullivan, LLP) for Uber Technologies, Inc.

Companies: Uber Technologies, Inc.

Cases: StateUnfairTradePractices CaliforniaNews