Uber tells U.S. court
customers must arbitrate disputes
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[March 25, 2017]
By Brendan Pierson
(Reuters) - A U.S. appeals court in New
York on Friday weighed arguments over whether Uber Technologies Inc
[UBER.UL] customers gave up their right to sue the company when they
registered for its popular taxi hailing service.
The case could have wider implications for internet businesses, which
often require customers to agree to bring disputes through private
arbitration as part of long lists of terms and conditions when they
register for services.
Theodore Boutrous, arguing for Uber, urged the three-judge 2nd U.S.
Circuit Court of Appeals panel to send a class action lawsuit by
Connecticut Uber passenger Spencer Meyer over the company's pricing
practices to arbitration, which U.S. District Judge Jed Rakoff refused
to do last year.
When users register for Uber on their smartphones, Boutrous said, they
are told on the registration screen that by registering, they are
agreeing to terms and conditions. Boutrous said a typical smartphone
user "can't miss" the notice, and can easily read the terms and
conditions by touching a link.
Jeffrey Wadsworth, arguing for Meyer, said it was not reasonable to
expect customers to know they were giving up their right to sue when
they agreed to standard terms and conditions from an internet-based
"To register means to put your name on an official list," he said. "It
does not mean you're engaging in some complex contractual transaction."
However, Circuit Judge Susan Carney and Reena Raggi both pointed out
that providing credit card information, as Uber users do when they sign
up, goes beyond merely registering.
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The Uber app logo is seen on a mobile telephone in this October 28,
2016 photo illustration. REUTERS/Toby Melville/Illustration/File
In a short response, Boutrous said that no other court had ruled the way Rakoff
did when faced with a registration agreement similar to Uber's.
He also said small differences in the way registration screens are set up should
not make a difference.
"We can't have district judges going on immaterial distinctions here," he said.
"It's on the screen, right in front of the individual."
Meyer's lawsuit, filed in 2015, claims that Uber's practice of "surge pricing" -
raising prices when demand spikes at a particular time and place - violates
federal antitrust laws.
In his opinion refusing to send the case to arbitration, Rakoff took broad aim
at onlines businesses' practice of including arbitration agreements in their
terms and conditions, saying it threatened consumers' right to jury trials.
"This most precious and fundamental right can be waived only if the waiver is
knowing and voluntary," he said.
(Reporting By Brendan Pierson in New York; editing by Grant McCool)
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