Capriole v. Uber Technologies, Inc.

991 F.3d 339

• Court: Court of Appeals for the First Circuit
• Decided: March 23, 2021
• Docket: 20-1386P
• Status: Published

Opinion

United States Court of Appeals For the First Circuit

No. 20-1386

JOHN CAPRIOLE, individually and on behalf of others similarly situated,

Plaintiff, Appellant,

v.

UBER TECHNOLOGIES, INC.; DARA KHOSROWSHAHI,

Defendants, Appellees.

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Indira Talwani, U.S. District Judge]

Before

Lynch and Kayatta, Circuit Judges, and McElroy,* District Judge.

Shannon Liss-Riordan, with whom Adelaide H. Pagano and Lichten & Liss-Riordan, P.C. were on briefs for appellant. Theane Evangelis, with whom Blaine H. Evanson, Heather Richardson, Jillian N. London, Samuel Eckman, and Gibson, Dunn & Crutcher LLP were on briefs for appellees. James W. Simpson, Jr., and Law Offices of James W. Simpson, Jr., P.C. on brief for Boston Independent Drivers Guild, Gig Workers Rising, Mobile Workers Alliance, Rideshare Drivers United, and We Drive Progress, amici curiae.

* Of the District of Rhode Island, sitting by designation. March 23, 2021 LYNCH, Circuit Judge. Plaintiff John Capriole filed a

class-action complaint in the United States District Court for the

District of Massachusetts asserting jurisdiction under the Class

Action Fairness Act, 28 U.S.C. § 1332(d)(2), and alleging that

Uber Technologies, Inc. ("Uber") misclassified him and other

drivers as independent contractors rather than employees. He then

filed a motion for a preliminary injunction seeking to require

Uber to alter its classification and treat him and those similarly

situated as employees. After the district court denied Capriole's

motion for a preliminary injunction, he appealed to this court.

The district court then granted a prior motion to transfer the

case to the Northern District of California. The Northern District

of California court dismissed the case and entered final judgment.

That dismissal is pending before the Ninth Circuit Court of

Appeals.

This appeal concerns only the Massachusetts district

court's denial of Capriole's first preliminary injunction motion

and whether we have jurisdiction over the appeal. We dismiss the

appeal before us as we have no appellate jurisdiction.

I. Background

Uber owns a mobile phone application (the "app") through

which customers can request rides from one place to another. When

a customer requests a ride, the app notifies a nearby Uber driver

and the driver may accept or decline the request. If a driver

- 3 - declines the request, it is offered to another driver. The driver

who accepts the request meets the customer at his or her location.

The price of the ride is set by Uber and passengers do not select

their drivers.

When drivers sign up for the Uber app, they must accept

the "Technology Services Agreement" ("TSA"), which governs the

relationship between Uber and its drivers. The TSA includes an

arbitration agreement (the "Arbitration Provision") which states

that disputes arising out of the TSA may be resolved "only by an

arbitrator through final and binding arbitration on an individual

basis only." Drivers may opt out of the Arbitration Provision

within thirty days after signing up.

Capriole signed up to be a driver on March 27, 2016. He

did not opt out of the Arbitration Provision.

II. Procedural History

On September 12, 2019, Capriole filed a federal

complaint against Uber and its CEO alleging that Uber misclassified

its drivers as independent contractors instead of employees in

violation of the Massachusetts Wage Act, Mass. Gen. Laws ch. 149,

§ 148B. Capriole argued that drivers must be classified as

employees and paid and granted benefits as employees under

Massachusetts law.

A week later, on September 19, 2019, Capriole filed a

motion to preliminarily enjoin Uber from continuing to classify

- 4 - Uber drivers as independent contractors. Capriole made several

arguments as to why class-wide preliminary injunctive relief was

appropriate despite the Arbitration Provision. First, as to the

Arbitration Provision, Capriole argued that it was unenforceable

because Uber drivers are exempt from the Federal Arbitration Act

("FAA") and Massachusetts law does not allow enforcement of

arbitration clauses containing class action waivers where they are

not covered by the FAA. See Feeney v. Dell Inc., 908 N.E.2d 753,

768-69 (Mass. 2009) (abrogated in part by AT&T Mobility LLC v.

Concepcion, 563 U.S. 333, 339 (2011)). Capriole also argued that

even if his claims had to be arbitrated under the Arbitration

Provision, the district court had the power to issue preliminary

injunctive relief to protect him while the arbitration was ongoing.

Second, as to preliminary injunctive relief, Capriole

argued he sought "public" injunctive relief, and under California

law "agreements to arbitrate claims for public injunctive relief

under [certain statutes] are not enforceable." McGill v. Citibank,

N.A., 393 P.3d 85, 90 (Cal. 2017). Capriole argued that the

Massachusetts Supreme Judicial Court would follow California law

on this point.

On October 17, 2019, Uber filed a motion to compel

arbitration and a motion to transfer the case to the Northern

District of California on the grounds that a parallel

misclassification suit was ongoing in California and the TSA

- 5 - contained a forum selection clause specifying that any claims not

arbitrated would be litigated in the Northern District of

California. On March 19, 2020, Capriole filed an amended complaint

adding a new claim that Uber drivers were not being given paid

sick leave in violation of the Massachusetts Earned Sick Time Law,

Mass. Gen. Laws ch. 149, § 148C.

On March 20, 2020, the district court denied the pending

motion for a preliminary injunction on the ground that Capriole

had not made a showing of irreparable harm. Capriole v. Uber

Techs., Inc., No. 1:19-cv-11941-IT, 2020 WL 1323076, at *3 (D.

Mass. Mar. 20, 2020). It noted that Capriole had put in "no

evidence" in support of his claims that drivers will suffer

irreparable harm or cannot afford basic necessities. Id. at *2

n.5. As to the claim for public injunctive relief, the district

court concluded that the Massachusetts Wage Act did not authorize

private plaintiffs to seek public injunctive relief. Id. at *3.

Further, the court held that Capriole was not requesting a public

injunction because "[r]elief that has the primary purpose or effect

of redressing or preventing injury to an individual plaintiff --

or to a group of individuals similarly situated to the plaintiff

-- does not constitute public injunctive relief." Id. (quoting

McGill, 393 P.3d at 90). Capriole filed a timely notice of appeal

on March 30, 2020.

- 6 - On March 23, 2020, Capriole filed a second motion for

preliminary injunction based on his amended complaint. On March

31, the district court granted Uber's motion to transfer the case

to the Northern District of California. Capriole v. Uber Techs.,

Inc., No. 1:19-cv-11941-IT, 2020 WL 1536648, at *1 (D. Mass. Mar.

31, 2020). The district court did not resolve the motion to compel

arbitration or the second preliminary injunction motion before the

transfer.

The next day, on April 1, 2020, the Northern District of

California entered the case on its docket. On May 14, the Northern

District of California district court granted Uber's motion to

compel arbitration and denied Capriole's second motion for

preliminary injunction. Capriole v. Uber Techs., Inc., 460 F.

Supp. 3d 919, 934 (N.D. Cal. 2020). On May 24, it dismissed the

case and entered final judgment. Capriole appealed the decision

of the Northern District of California and the Ninth Circuit heard

argument on October 16, 2020.1

1 In dismissing the case, the district court held the Arbitration Provision was enforceable because Uber drivers are not "workers engaged in foreign or interstate commerce" under the FAA, that Capriole was not entitled to a public injunction under Massachusetts law, and that under Ninth Circuit precedent the district court did not have the power to grant preliminary injunctive relief to Capriole prior to arbitration. Capriole, 460 F. Supp. 3d at 927, 932-34. Those issues are before the Ninth Circuit.

- 7 - III. Analysis

Uber argues that this appeal became moot when the

California district court entered final judgment compelling

arbitration and dismissing the case. We address the issue of

jurisdiction as presented by the parties.

We decide the jurisdictional question of mootness before

reaching the merits of a case. Town of Portsmouth v. Lewis, 813

F.3d 54, 58 (1st Cir. 2016). Under the mootness doctrine, "an

actual controversy must exist at all stages of the review, not

merely at the time the complaint is filed." Id. (quoting Am. Civ.

Liberties Union of Mass. v. U.S. Conf. of Cath. Bishops, 705 F.3d

44, 52 (1st Cir. 2013)). "A case is moot when the court cannot

give any 'effectual relief' to the potentially prevailing party."

Am. Civ. Liberties Union of Mass., 705 F.3d at 52 (quoting Horizon

Bank Tr. Co. v. Massachusetts, 391 F.3d 48, 53 (1st Cir. 2004)).

It has long been the law that an appeal from the denial

of a preliminary injunction motion becomes moot when final judgment

issues because the district court's denial of the motion merges

with the final judgment. See Shaffer v. Carter, 252 U.S. 37, 44

(1920) (abrogated on other grounds by Comptroller of Treasury of

Md. v. Wynne, 575 U.S. 542 (2015)) (dismissing an appeal from the

denial of a preliminary injunction motion because the denial was

"merged in the final decree"); Smith v. Ill. Bell Tel. Co., 270

U.S. 587, 588-89 (1926); Harper ex rel. Harper v. Poway Unified

- 8 - Sch. Dist., 549 U.S. 1262, 1262 (2007); Chaparro-Febus v. Int'l

Longshoremen Ass'n, Loc. 1575, 983 F.2d 325, 331 n.5 (1st Cir.

1992) ("Because the district court's denial of the preliminary

injunction was 'merged in' the final judgment dismissing the case,

plaintiffs' complaints regarding the preliminary injunction are

moot.").

We agree with Uber that upon entry of the judgment of

dismissal of Capriole's suit, the denial in Massachusetts of the

first preliminary injunction merged with the California court's

final judgment. As a result, we do not have jurisdiction to hear

this appeal.

The arguments to the contrary fail. Capriole first

argues that Uber conceded the First Circuit had retained

jurisdiction of the appeal after the case was transferred. He

cites only one case, Matrix Group Ltd. v. Rawlings Sporting Goods

Co., 378 F.3d 29, 32 (1st Cir. 2004), to argue that a court of

appeals does not lose jurisdiction over the appeal of a preliminary

injunction motion when the underlying case is transferred.

Capriole misapplies Matrix Group Ltd., which is easily

distinguishable and which concerned an entirely different factual

scenario. It was the entry of final judgment, not the transfer,

that mooted this appeal.

Capriole next argues that the transfer "severed" the

first request for a preliminary injunction and thus that the denial

- 9 - of the preliminary injunction motion did not merge with the final

judgment. But a motion for a preliminary injunction is not a

separate claim that can be severed from the underlying claim. See

Acevedo-Garci v. Monroig, 351 F.3d 547, 558-59 (1st Cir. 2003) ("A

severance occurs when a lawsuit is divided into two or more

separate and independent or distinct causes." (quoting 88 C.J.S.

Trial § 17 (2003)).

Capriole last argues that his appeal of the denial of

his request for a preliminary injunction cannot be moot because

there is "still a case and controversy, as Uber drivers in

Massachusetts . . . remain misclassified, and effective relief may

still be provided upon resolution of the Appeal." This argument

fails. The appeal is moot because this court cannot provide relief

as to the preliminary injunction motion, not because the underlying

dispute has been resolved.

The final judgment in California means that the

arbitrator, not us or another court, is to decide any claim for

relief in this case unless and only if the Ninth Circuit reverses.

IV. Conclusion

The appeal is dismissed for lack of jurisdiction.

- 10 -