Court Grant’s Uber’s Motion to Compel Arbitration in E-Scooter Suit

On Wednesday, Judge Jeffrey S. White of the Northern District of California issued an order granting Uber Technologies Inc.’s motion to compel arbitration finding that the arbitration agreement “clearly and unmistakably” delegates arbitrability to the arbitrator.

Previously, the plaintiff sued Uber, alleging that “she lost control of one of Uber’s Jump electric scooters while attempting to use her hand to signal that she was turning.” The order summarized that, in March, Uber filed a motion to compel arbitration asserting that the plaintiff accepted the terms of the rental agreement with an arbitration provision within Uber’s Jump application when she rented the Jump scooter.

However, the plaintiff opposed the motion to compel arbitration, asserting a variety of claims, such as that the arbitration agreement violates McGill and that she properly seeks public injunctive relief, among other assertions. The court added that the plaintiff “does not dispute that she accepted the Arbitration Agreement’s terms, but she argues that the Agreement does not ‘clearly and unmistakably’ delegate arbitrability to the arbitrator and contends that the Agreement is unenforceable under McGill v. Citibank.”

In its analysis, the court noted that under the Federal Arbitration Act (FAA), arbitration agreements “shall be valid, irrevocable, and enforceable save upon such grounds as exist at law or in equity for the revocation of any contract.” Pursuant to the FAA, the court “must order arbitration if it concludes that (1) an arbitration agreement exists and (2) the dispute at hand falls within the scope of the arbitration agreement.” Furthermore, the parties can arbitrate “these so-called ‘gateway issues’ if the parties do so ‘clearly and unmistakably.’ ”

The court agreed with Uber’s argument that the arbitration agreement “clearly and unmistakably delegates questions of arbitrability to the arbitrator, both by indicating a delegation clause and by incorporating the American Arbitration Association’s (‘AAA’) rules.” In particular, the court noted that a delegation clause “constitutes clear and unmistakable evidence of an intent to delegate.”

Additionally, the court pointed to the language of the arbitration agreement, which stated that “the arbitrator … shall have exclusive authority to resolve any disputes relating to the interpretation, applicability, enforceability or formation of (the) Arbitration Agreement, including any claim that all or any part of (the) … Agreement is void or voidable.” The agreement also stated that the “(a)rbitrator shall also be responsible for determining all threshold arbitrability issues, including issues relating to … any defense to arbitration”; the court found that this clearly and unmistakably delegates the issue of arbitrability to the arbitrator.

The court added that because there is a clear delegation clause, the issue of party sophistication is not relevant. The court claimed that it also is “unpersuaded” by the plaintiff’s argument that the instant action involves an ambiguous severability clause because “the severability provision here does not contradict the delegation provision.” As a result, the court reiterated that the parties “clearly and unmistakably delegated threshold issues to the arbitrator.” Therefore, the court granted Uber’s motion to compel arbitration.

Uber is represented by Shook, Hardy & Bacon LLP. The plaintiff is represented by Carlson Lynch LLP and Hindman APC.