U.S. Second Circuit - The FindLaw 2nd Circuit Court of Appeals Opinion Summaries Blog

Uber Wins Customer Arbitration Appeal

The Second Circuit Court of Appeals has reversed and remanded the lower court's decision denying Uber's motion to compel arbitration in the Meyer v. Uber price fixing case.

Fortunately for Spencer Meyer, the appellate court's decision does not close the door on his case and send him packing to arbitration. Rather, Meyer and Uber will be going back before the district court to argue over whether the case should be forced into arbitration, at least one more time.

What's the Case About?

Spencer Meyer claims that Uber and its drivers engage in price fixing through the use of surge pricing. Essentially, as demand increases, prices increase. Meyer asserts that the alleged price fixing violates the federal Sherman Antitrust Act, as well as New York's Donnelly Act.

However, the merits of the price fixing claim have not been touched yet. At this stage, the parties have been fighting over whether Uber's arbitration clause is valid and should control this action. While it may seem that an arbitration clause buried in a terms of service would be a contract of adhesion, courts have been increasingly willing to find in favor of the businesses' sticky contracts.

Litigating Arbitration

As noted in the appellate decision, an interlocutory appeal can be made after an order on a motion to compel arbitration, as was the case here. However, despite obtaining a favorable ruling stating that the arbitration clause in Uber's terms of service is valid, and that the plaintiff's acceptance to the terms was also valid, the case was remanded for the lower court to decide whether to compel arbitration.

The circuit court found that Meyer's argument that Uber waived their right to arbitration by litigating the matter was not considered by the lower court, thus they could not issue a ruling on that matter. As such, the matter was remanded for the lower court to decide the issue of waiver.

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