Update: Uber Loses AAA Fee Appeal Before New York State Court; N.D. Cal. Petitioners React

According to a letter sent to Judge Richard Seeborg on Thursday, the petitioners seeking an order compelling Uber to pay arbitration fees it owes the American Arbitration Association (AAA), may not need the requested judicial intervention. The letter explains that a New York state appellate tribunal rejected Uber’s bid to get out of paying the AAA fees it owes in connection with tens of thousands of racial discrimination claims brought by Uber Eats customers.

As previously reported, the Northern District of California action was filed after Uber allegedly expressed unwillingness to pay for the aforementioned arbitration fees. Those fees accumulated after claims streamed in over a disparate pricing policy, whereunder the company charged delivery fees to customers who ordered from non-Black-owned businesses but waived the fee for customers who ordered from Black-owned businesses. By Uber’s own policy, aggrieved customers were limited to seeking individual arbitral resolution of their claims.

The AAA received more than 20,000 arbitration demands over the differential policy. With a price tag of $1,400 per arbitration, which Uber agreed to pay, the company was looking at more than $10 million in arbitration charges.

Uber sought relief with a New York state court, arguing that the imposition of the AAA’s fee schedule was unjust. Its case first floundered at the trial court, and according to this week’s letter, it has now fallen short on appeal.

According to the letter, the “New York Appellate Division, First Department, unanimously affirmed the state trial court’s decision rejecting Uber’s attempt to avoid the arbitration fees it bargained for in drafting its consumer arbitration agreement.” The letter further says that Uber will unlikely have any further recourse to appeal the interlocutory decision. Moreover, it points out that Uber represented to Judge Seeborg that if it lost the New York appeal, it would “meet its obligations and arbitrations will proceed.”

As such, the petitioners suggest that the court stay any further action on pending motions for three weeks to determine “whether AAA or Uber take further steps that alter the course of these federal proceedings.”

The petitioners are represented by Consovoy McCarthy PLLC and Benbrook Law Group PC. Uber is represented by Jenner and Block LLP.