Meyer v. Kalanick

291 F. Supp. 3d 526
CourtDistrict Court, S.D. Illinois
DecidedMarch 5, 2018
Docket15 Civ. 9796
StatusPublished
Cited by3 cases

This text of 291 F. Supp. 3d 526 (Meyer v. Kalanick) is published on Counsel Stack Legal Research, covering District Court, S.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Meyer v. Kalanick, 291 F. Supp. 3d 526 (S.D. Ill. 2018).

Opinion

JED S. RAKOFF, U.S.D.J.

The American law of contracts in its common law origins presumed a promissory agreement freely negotiated between parties who reached a "meeting of the minds."1 That the agreement eventually became enforceable in a court of law (through the common law action known as "assumpsit") was an essential ingredient in the development of the British and American economies.2

But with the rise of giant corporations selling their products to masses of consumers, this contractual model became largely a figment of imagination, or nostalgia, at least so far as national retail markets were concerned. Increasingly, consumers purchasing a product were forced, as a condition of their purchase, to agree to a form contract drafted by the seller, replete with *529one-sided legalistically-worded provisions that the consumer had to accept if she wished to make the purchase. Such one-sided, take-it-or-leave-it form contracts were utilized by sellers in even otherwise competitive markets, because sellers saw no material competitive advantage in eliminating or negotiating any of these terms. Most consumers, for their part, did not even bother to read these small-print forms-not that most consumers would have been able to understand most of them if they had read them. These forms thus became the ubiquitous "contracts of adhesion."

In recent years, however, especially with the rise of internet merchandising, a new requirement has been imposed on consumers by these form contracts, to wit, a waiver of constitutional rights. In particular, consumers are now required, if they wish to purchase virtually any product or service via the internet, to waive their constitutional right to trial by jury-indeed, even their right to access to a court of law-and instead, submit to binding arbitration before a company-hired arbitrator.

One might have thought that such waivers were unenforceable on their face. The right to trial by jury, in civil as well as criminal cases, is a central feature, not only of the federal Constitution, but also of the constitutions of virtually every state.3 The right reflects the deep-seated view of the American people that the community is the best judge of justice.

But this, it appears, is not the view of the judiciary. Thus, while appellate courts still pay lip service to the "precious right" of trial by jury,4 and sometimes add that it is a right that cannot readily be waived,5 in actuality federal district courts are now obliged to enforce what everyone recognizes is a totally coerced waiver of both the right to a jury and the right of access to the courts-provided only that the consumer is notified in some passing way that in purchasing the product or service she is thereby "agreeing" to the accompanying voluminous set of "terms and conditions."

This being the law, this judge must enforce it-even if it is based on nothing but factual and legal fictions.

Which brings us to this case. Before the Court on remand are motions by Travis Kalanick and Uber Technologies, Inc. ("Uber") to compel arbitration. See Dkts. 80, 91. Also before the Court are motions by Kalanick for judgment on the pleadings and to dismiss as moot Spencer Meyer's claims for injunctive and declaratory relief. See Memorandum of Law in Support of Defendant Travis Kalanick's Renewed Motion to Compel Arbitration and For Judgment *530on the Pleadings ("Kalanick Mem."), Dkt. 152.

Meyer opposes defendants' motions arguing that, as a result of a pop-up keypad not in evidence prior to remand, Meyer did not have reasonably conspicuous notice that, by registering with Uber, he was agreeing to Uber's "Rider Terms" (otherwise referred to as the "User Agreement" or "Terms of Service") and therefore never entered into an agreement with defendants to arbitrate his claims. See Plaintiff's Memorandum of Law Concerning New Evidence of Keypad Obstruction ("Meyer Keypad Mem.") at 1-2, Dkt. 164. Meyer further argues that, even if an agreement to arbitrate was reached between Meyer and defendants, Kalanick expressly waived his, and by extension, Uber's, right to compel arbitration in this case. See Supplemental Memorandum of Law in Further Opposition to Defendants' Motions to Compel Arbitration ("Meyer Mem.") at 8-14, Dkt. 156.

By bottom line Order dated November 22, 2017, the Court granted Uber's motion to compel arbitration and Kalanick's motion for judgment on the pleadings, and dismissed Meyer's case without prejudice to Meyer pursuing his claims against Kalanick before an arbitrator. See Dkt. 169. The Court also denied as moot Meyer's motion-made after the Court had denied defendants' initial motions to compel arbitration in 2016 but prior to the Second Circuit's review of the case-to join four additional plaintiffs. See id.; see also Dkt. 127.

This Opinion and Order provides the reasons for these rulings.

Overall familiarity with the prior proceedings in this case is here assumed. Of some relevance to the instant dispute, Meyer's First Amended Complaint, filed on January 29, 2016, alleges that Kalanick orchestrated and facilitated an illegal price-fixing conspiracy among Uber drivers in violation of Section 1 of the Sherman Antitrust Act, 15 U.S.C. § 1, and Section 340 of the Donnelly Act, New York General Business Law § 340. See First Amended Complaint ¶¶ 120-140, Dkt. 26. Meyer's basic claim is that Kalanick arranged for Uber drivers to use Uber's pricing algorithm to determine the amounts to charge to Uber riders, thereby restricting competition among drivers who would otherwise compete on price to the benefit of riders such as Meyer. See id. ¶¶ 1-7.

Despite the obvious nexus between Meyer's claim and Uber, Meyer did not implead Uber. Nor did Uber initially move to intervene in the case. Instead, on January 15, 2016, Kalanick moved to dismiss Meyer's complaint on various grounds, see Dkt. 22, including, inter alia, that Meyer was barred from bringing a class action lawsuit because of a waiver provision in his User Agreement with Uber, the terms to which, Kalanick argued, Meyer acceded when he registered for the Uber application, see Memorandum of Law in Support of Defendant Travis Kalanick's Motion to Dismiss at 21-22, Dkt. 28. According to Kalanick, the class waiver term applied even though Kalanick was not (then) seeking to compel arbitration. See id. at 22, n. 10 ("Mr. Kalanick does not seek to enforce the arbitration agreement here.... [Though,] Mr. Kalanick does not waive and expressly reserves his right to move to compel arbitration in other cases arising out of the User Agreement.").

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Bluebook (online)
291 F. Supp. 3d 526, Counsel Stack Legal Research, https://law.counselstack.com/opinion/meyer-v-kalanick-ilsd-2018.