Goncharov v. Uber Techs., Inc.

229 Cal. Rptr. 3d 3, 19 Cal. App. 5th 1157
CourtCalifornia Court of Appeal, 5th District
DecidedJanuary 29, 2018
DocketA149347
StatusPublished
Cited by14 cases

This text of 229 Cal. Rptr. 3d 3 (Goncharov v. Uber Techs., Inc.) is published on Counsel Stack Legal Research, covering California Court of Appeal, 5th District primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Goncharov v. Uber Techs., Inc., 229 Cal. Rptr. 3d 3, 19 Cal. App. 5th 1157 (Cal. Ct. App. 2018).

Opinion

Margulies, J.

*1161Plaintiffs Leonid Goncharov, Mohammed Eddine, Alan Freberg, Trevor Johnson, Peter Kirby, and Jeremy Watt filed a putative class action lawsuit against Uber Technologies, Inc. (Uber) for providing unlicensed transportation services that appropriated passengers and income from licensed taxicab drivers. In the second amended complaint (SAC), plaintiffs alleged Uber failed to comply with the California Public Utilities Commission (CPUC) licensing requirements for charter-party carriers. Uber filed a demurrer, claiming the court lacked jurisdiction under Public Utilities Code 1 section 1759 due to ongoing rulemaking by the CPUC and asserting the SAC failed to state a claim as to all causes of action. Plaintiffs asserted the court had denied these arguments in connection with Uber's demurrer to the first amended complaint and lacked jurisdiction to reconsider these issues without a proper motion under Code of Civil Procedure section 1008. Plaintiffs also contested the substantive arguments raised by Uber. The trial court took judicial notice of various documents associated with the CPUC rulemaking and sustained the demurrer with leave to amend. Plaintiffs declined to amend, and judgment was entered. We affirm the judgment.

I. BACKGROUND

A. Factual Background

Because this appeal challenges a trial court order sustaining a demurrer, we draw the relevant facts from the complaint and matters subject to judicial notice.2

*6( Yvanova v. New Century Mortgage Corp. (2016) 62 Cal.4th 919, 924, 199 Cal.Rptr.3d 66, 365 P.3d 845.)

Uber provides transportation services to the public by connecting consumers to its " 'partner drivers' " through the use of a GPS-enabled smartphone *1162application. At the time Uber began operating, it had not received any licenses, permits or approvals from the CPUC to operate as a charter-party carrier.3

The CPUC issued a cease and desist letter and citation to Uber, asserting Uber was violating various CPUC rules and regulations. The CPUC also initiated rulemaking (Rulemaking) to determine "whether the CPUC should adopt changes to its regulations pertaining to passenger transportation in light of the emergence of companies with business models such as Uber, Lyft and SideCar." In an effort to resolve the cease and desist letter and citation, the CPUC and Uber entered into a settlement agreement in which the CPUC agreed to not enforce the outstanding citation against Uber in exchange for Uber's compliance with certain consumer protection conditions. The parties agreed the settlement would govern their interactions pending a final decision by the CPUC in the Rulemaking.

The CPUC thereafter issued a decision, which established a new subset of charter-party carriers known as transportation network companies (TNC's). As part of that decision, the CPUC found UberX4 qualified as a TNC and could not lawfully operate without a CPUC license. The CPUC also "reject[ed] Uber's assertion that TNC's are nothing more than an application on smart phones, rather than part of the transportation industry. ... Accordingly, Uber is not exempt from the [CPUC]'s jurisdiction over charter-party carriers." That said, the CPUC "left the issue of whether Uber is a [charter-party carrier], despite the fact that it is not a TNC, to be determined in Phase II of this proceeding." Uber subsequently applied for a TNC permit for UberX, which the CPUC issued on April 7, 2014.

During the course of "Phase II," the CPUC requested information and documents from Uber regarding its operations. The CPUC also continued to evaluate issues impacting the new TNC category. When the CPUC issued its decision on Phase II, it was "still considering whether to require Uber, or any of its subsidiaries, to seek operating authority as a TCP."5 The CPUC concluded, "Uber's status will be taken up as part of Phase III of this proceeding."

*1163"Phase III" was divided into two subphases: III.A. and III.B. Phase III.A. focused on issues impacting TNC's. Phase III.B. addressed eight issues, including additional TNC concerns, the question "Is Uber a TNC?," and the "Regulatory status of Uber." Phase III.B. is currently ongoing and the CPUC has not issued a decision.

*7Uber's non-UberX operations remain unlicensed.

B. Procedural Background

1. Uber's First Demurrer

During the CPUC proceedings, plaintiffs filed a complaint against Uber, which they unilaterally amended (FAC), alleging it operated and advertised itself as a public transportation company without the requisite regulatory approvals from the SFMTA or the CPUC. The FAC asserted causes of action for (1) violation of the Unfair Competition Law (UCL; Bus. & Prof. Code, § 17200 et seq. ); (2) intentional interference with prospective economic relations; (3) negligent interference with prospective economic relations; (4) accounting; and (5) declaratory relief.

Uber filed a demurrer to the FAC. The demurrer primarily focused on the doctrine of judicial abstention. It argued the court should abstain from adjudicating the FAC because it would require the court to "assume the functions" or "interfere with the functions" of the CPUC. Specifically, Uber argued "the Legislature has entrusted the power to regulate the vehicle for hire industry to the CPUC and SFMTA," the claims "depend on a determination that Uber is either a taxi company or a Black Car service. ... [which] lies with the agencies responsible for taxis and Black Cars," and the CPUC is in the process of evaluating these issues. In support of its argument, Uber referenced the settlement agreement between the CPUC and Uber, which allowed Uber to continue its operations "pending a final decision of the Rulemaking." Uber claimed any consideration of the FAC would "nullify the agency's decision, supplant its regulatory authority, and render its work superfluous."

In opposition, plaintiffs argued the Legislature had already defined "taxis" and "charter-party carriers," and the FAC merely sought to determine whether Uber meets the definition through standard statutory construction. In reply, Uber asserted the CPUC has authority to determine the scope of the "charter-party carrier" definition and its related regulations, and is in the process of doing so. Uber argued the court should defer to that authority.

The trial court overruled Uber's demurrer.

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Cite This Page — Counsel Stack

Bluebook (online)
229 Cal. Rptr. 3d 3, 19 Cal. App. 5th 1157, Counsel Stack Legal Research, https://law.counselstack.com/opinion/goncharov-v-uber-techs-inc-calctapp5d-2018.