Uber Technologies Inc.'s arbitration win against predatory pricing claims wasn’t compromised by the arbitrator’s statement that he would “need security” because “people would be after me” if he “ruled Uber illegal,” a Manhattan federal judge ruled, calling the statement an obvious “attempt at humor.”
“If the arbitrator had in fact been making his decision out of fear, the last thing he would have done is placed that on the record,” Judge Jed S. Rakoff wrote late Monday. “The remarks are not inconsistent with impartiality once their patently jestful intent is recognized.”
The price-fixing lawsuit, filed in the U.S. District Court for the Southern District of New York, sought to hold Uber to its controversial claim that its drivers aren’t actually employees: It accused the ridesharing giant of coordinating prices charged by the nominally independent drivers.
The case is part of a wave of challenges to Uber’s business model in state and federal courts nationwide. The suits have all centered on similar conduct, but some of them have involved antitrust claims, while others have alleged unfair competition and violations of state pricing laws.
A federal judge in San Francisco ordered Uber in May to face claims that it drove ridesharing pioneer Sidecar out of business by leveraging the support of its deep-pocketed venture capital backers to operate at a loss for years. But the tech company has escaped most of the cases.
For instance, a Boston federal judge threw out one of them in 2019, and Uber got a California appeals court to affirm dismissal of state law predatory pricing claims in March, one day before it beat a similar suit brought in San Francisco federal court by the city’s oldest taxi company.
Rakoff sent the New York case—a proposed class action that also targeted Uber founder Travis Kalanick—to arbitration in late 2017.
After arbitrator Les Weinstein ruled for the company in February, the consumer plaintiff filed a motion in May seeking to vacate the decision over his “need security” remark. The plaintiff also claimed Weinstein posed for a photo with Kalanick, which showed he was “starstruck.”
The judge found both arguments unpersuasive Monday.
Weinstein made jokes throughout the proceedings, and the context makes clear the statement was another, though it was “perhaps inappropriate (or, worse yet, not as humorous as some of the arbitrator’s better jokes),” Rakoff wrote.
Moreover, the claim that Weinstein’s photo with Kalanick showed “hero-worship"—an episode that may not even have happened, in light of ambiguous evidence—involves “speculation” that’s “insufficient to justify vacatur,” the judge said.
The plaintiff also should have raised his challenge during the arbitration proceedings, Rakoff found. He rejected the argument that a challenge to an arbitrator’s impartiality is unwaivable, saying it was squarely foreclosed by precedents from the U.S. Court of Appeals for the Second Circuit.
Uber was represented by Boies Schiller Flexner LLP. The plaintiff was represented by Harter Secrest & Emery LLP.
The case is Meyer v. Kalanick, S.D.N.Y., No. 15-cv-9697, 8/3/20.
The Link LonkAugust 04, 2020 at 08:55PM
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Uber's Win Survives Arbitrator's Bad Joke, Judge Rules - Bloomberg Law
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