+Knj#cxc2^?e%--3J<=1$Nkko%4P c^bd{#d}SX% MD'9Zh>Qx&|M+xe8w0Ro7x{uaR\1;Y?V?AjrMdkL 8|9Aut/U In legal papers, they have called the Uber Eats arbitration a ransom by politically-motivated lawyers.. Uber commenced its lawsuit after law firm Consovoy McCarthy brought more than 31,000 demands for arbitration on behalf of Uber Eats customers alleging reverse discrimination" arising from Uber's efforts to support Black-owned restaurants following the police killing of George Floyd in May 2020. He played a supporting role in Fisher v. the University of Texas, a case that originated in 2008 and came before the Supreme Court twice. The group is represented by attorneys William Consovoy and Patrick Strawbridge of the law firm Consovoy McCarthy. ',`+^(?5Z`&^JL("[T\(9$xwMa)UT8u9v-%T`0B*93,} ~&&CN@Nhkojo8Q= = |CM*Y /cW8sxjM9^UxX~Zjm and the remaining batches each containing approximately 7,771 California cases. 40 0 obj This material may not be published, broadcast, rewritten, or redistributed. While acknowledging this background, Justice Robert Reed of the Commercial Division emphasized that Ubers suit against AAA does not in any way involve an analysis of the merits of the reverse discrimination claims asserted by the Consovoy law firm. Uber and its lawyer Roberta Kaplan didnt respond to requests for comment. In addition, Uber has asserted counterclaims against its arbitration counterparties seeking reimbursement of the fees at issue, thus cutting against its claim of irreparable harm. Will was just critical to all of that.. AAA responded by stating if payment was made under protest, it would return such fees and administratively close the case files. [or] unfair . Consovoy also didnt respond to a comment request, nor did the AAA or its lawyer Ted Hecht. Uber's platform, "Uber Eats," allows Uber stated it would pay that amount, but "under protest." AAA responded by stating if payment was made under protest[*2] et seq. to preserve the status quo by enjoining AAA from issuing any additional invoices, prohibiting AAA requested From He clerked for Justice Clarence Thomas during the 2008-9 Supreme Court term, and he came away with the conviction that the court was poised to tilt further to the right and that constitutional rulings that had once been considered out of reach by conservatives, on issues like voting rights, abortion and affirmative action, would suddenly be within grasp. oppressive, unscrupulous, or substantially injurious to consumers (People v Casa Blanca Uber is effectively seeking a substantial reduction to the additional $91 million AAA will invoice to arbitrate the claims, which would be a monetary judgment precluding the preliminary injunction (see Credit Agricole Indosuez v Rossiyskiy Kredit Bank, 94 N.Y.2d 541, 545, 548 [2000]; JSC VTB Bank v Mavlyanov, 154 A.D.3d 560, 561 [1st Dept 2017]). Following the death of George Floyd in June 2020, Uber announced it would waive its delivery fee charged to customers for orders placed at certain qualifying Black-owned restaurants from June 4, 2020 through December 1, 2020. Supreme Court of New York, First Department. . This is a contract dispute between plaintiffs Uber Technologies, Inc. and Uber USA, LLC (together, Uber) and defendant the American Arbitration Association, Inc. (AAA) over fees for approximately 31, 500 similarly situated arbitrations. According to a motion filed by some of the arbitration petitioners in federal court in San Francisco in December, Uber refused to pay the American Arbitration Association (AAA) filing fees it was obligated to under its own arbitration agreement. would succeed on its declaratory judgment breach of contract claim. Uber has not shown a likelihood of success on the merits of its breach of implied covenant Both she and his father survive him, as do his stepfather, Bernie Whalen, and his sister, Amanda Consovoy. covenant of good faith and fair dealing, unjust enrichment and restitution, and unfair competition CALIFORNIA APPEALS COURT RULES UBER, LYFT MUST RECLASSIFY DRIVERS AS EMPLOYEES. No aspect of this advertisement has been approved by the Supreme Court of New Jersey. The Protocol, while not explicitly [*3]mentioned in Uber's Terms of Use, has language regarding 41 0 obj 4a 3e' @ leaving the company owing as much as $92 million. [*4]arbitration counterparties seeking reimbursement of the fees Further, Uber could avoid the alleged irreparable harm caused by AAA by changing the assigned arbitration organization for the 31, 000 cases. ?`Z?01* f3 G, William Consovoy, whose firm brought the arbitrations, is known for representing clients like Donald Trump and the anti-affirmative action group Students for Fair Admissions. Those cases, brought on behalf of Students for Fair Admissions, an organization that Mr. Blum founded, reached the Supreme Court last fall. told the parties that absent an agreement between them, it would administer the cases pursuant to endstream E\%@Efc6@dG*B L% This is a contract dispute between plaintiffs Uber Technologies, Inc. and Uber USA, LLC case management fees for the second "batch" of 7,771 cases subject to the Cal CP Arbitration Firm Helps AAA Block Ubers Bid to Cancel $10M Arbitration Bill. He was an enormously talented legal strategist, Mr. Blum said in a phone interview. AAA exercised its discretion as to the filing fee, and reduced it to approximately $4.3 million, which Uber paid without objection. Rule. of those documents requires AAA to charge reasonable fees related to its actual costs. LP v Board of Mgrs. In a filing submitted on Sunday, Uber Technologies Inc. and Uber USA. 2021-03782. Please see our Privacy Policy. Eventually, it was required to pay $700,000 to facilitate 500 more cases, pending a final decision by a state appellate tribunal. which would be a monetary judgment precluding the preliminary injunction (see Credit In 2020 alone, he argued against an extension of the deadline for mail-in ballots in Wisconsin, the re-enfranchisement of felons in Florida and a California plan to send absentee ballots to all registered voters. PRIVACY POLICY. After Uber announced in 2020 that its food-delivery branch, Uber Eats, would waive fees for Black-owned businesses, Consovoy McCarthy arranged for some 31,000 complainants to claim reverse discrimination through arbitration, leaving the company owing as much as $92 million. #X5.0l`}u,"ZeJRg&[eT%X`XZa(`E;1@kU42mzsGIOd~{~ r1Y/iN5xI]e_!Qae. Uber Eats made this change in June . The complaint alleges essentially that non-party law firm Consovoy McCarthy PLLC (Consovoy) sought out thousands of Uber drivers to file claims through the firm alleging "reverse discrimination" stemming from Uber's temporary waiver of delivery fees. authenticate users, apply security measures, and prevent spam and abuse, and, display personalised ads and content based on interest profiles, measure the effectiveness of personalised ads and content, and, develop and improve our products and services. In 2020, Uber implemented a slew of initiatives to support Black-owned restaurants, including waiving delivery fees for meals from Black-owned establishments ordered through Uber Eats,. While Uber alleges that it, the claimants, and AAA are all bound About 31,500 cases accuse Uber Eats of reverse race discrimination.". Firm Scores Unanimous Appellate Win for American Arbitration Association Over Uber. Mr. Consovoy then worked closely with Mr. Blum on cases against Harvard and the University of North Carolina, arguing that their affirmative action programs and, by extension, college and university affirmative action programs generally were unconstitutional. https://www.hugheshubbard.com/legal-notices-methodologies. The lawyer William Consovoy, left, in July 2019, leaving a courthouse in Washington where he was representing President Donald J. Trump in his fight to prevent Congress from forcing the release of his tax returns. Rather, the In legal papers, they have called the Uber Eats arbitration a "ransom by politically-motivated lawyers." William Consovoy, whose firm brought the arbitrations, is known for representing. immunity under California law. Find out more about how we use your personal data in our privacy policy and cookie policy. of the Hearth House Condominium, 190 AD3d 473, 474 [1st Dept 2021]). Consovoy McCarthy represented former president Donald Trump in his dispute with congressional Democrats over subpoenas for his financial records. Thus, it is unlikely Uber Dan Weiner, John Townsend and alum Jack Kilgard represented AAA on the matter. NY Slip Op 32080(U). <>stream Supreme Court providently found a lack of irreparable harm. AAA is the worlds largest private mediation and alternative dispute resolution service. Eats customers against Uber. Uber commenced its lawsuit after law firm Consovoy McCarthy brought more than 31,000 demands for arbitration on behalf of Uber Eats customers alleging "reverse discrimination" arising from Uber's efforts to support Black-owned restaurants following the police killing of George Floyd in May 2020. The parties and AAA then engaged in months of fruitless negotiations to come up with a more efficient process for dealing with the 31, 500 arbitration cases. They say it was illegal to waive fees for certain Black-owned restaurants but not orders they placed from places owned by non-Black entrepreneurs. Williams mother, Linda Whalen, was a mental-health specialist. You can change your choices at any time by clicking on the 'Privacy dashboard' links on our sites and apps. However, Uber may not seek a declaratory judgment when other remedies are available, such as monetary damages (see Atlas MF Mezzanine Borrower, LLC v Macquarie Tex. endobj [Prior Case History: 2021 <>stream !yc1uU]\/O,f0v^Grdt2I>kEuu\S.+kF#dp\*uP 17200 et seq.). % Uber could be on the hook for $92 million or more in arbitration fees, depending on how far the cases go. The company has received more than 8,500 demands for arbitration over the policy, an Uber spokesperson confirmed to FOX Business. In hot-button cases, lot of times passions overtake logic, and that was not the case with him. Contrary to Uber's allegations, this claim is unlikely to succeed under the After Uber announced in 2020 that its food-delivery branch, Uber Eats, would waive fees for Black-owned businesses, Consovoy McCarthy arranged for some 31,000 complainants to claim. Though he quickly made partner at Wiley Rein, he grew restless within the confines of a large firm. The Cal CP Arbitration at issue, thus cutting against its claim of irreparable harm. Loan Holder LLC, 174 A.D.3d 150, 163 [1st Dept 2019]), and here, monetary damages are available for all four of Uber's claims. %PDF-1.7 asserted declaratory judgment claims based upon breach of contract, breach of the implied Moreover, the arbitrator may impose severe sanctions on the breaching party, including entry of a default judgment, prohibiting discovery, monetary sanctions, and orders of contempt. Law360 Pulse takes your privacy seriously. According to the fee schedule, for each substantial reduction to the additional $91 million AAA will invoice to arbitrate the claims, payment was made under protest[*2], it would return such fees customers who paid a delivery fee to a nonblack owned restaurant during the relevant time and He knew every argument, the upside of the argument, where were vulnerable, where were strong.. On September 14, 2021, AAA issued an invoice demanding payment of $10.879 million for case management fees for the second "batch" of 7, 771 cases subject to the Cal CP Arbitration Rule. Consovoy McCarthy in an amicus filing said arbiter immunity leaves Uber's case "dead on arrival." Whatever the motivations behind the complaint, arbitration experts saw plenty of irony in Uber's . then. Contrary to Uber's allegations, this claim is unlikely to succeed under the unlawful prong, as Uber has not shown a likelihood of success on the underlying breach of the implied covenant claim. $1,500 arbitrator fee, for a total of approximately $107 million if charged the full amount under monetary damages are available for all four of Uber's claims. The CA Rules also allow AAA to exercise sole discretion as to whether to apply the CA Rules, whether to interpret and apply the fee schedule to a particular case or cases, and whether to consider an alternative payment process for multiple case filings. The parties and AAA then engaged in months of fruitless negotiations to come up with a reverse race discrimination. Because Supreme Court did not abuse its discretion in finding that Uber failed to establish a However, before that goes into effect, Californians will be voting on Proposition 22, an Uber and Lyft-backed measure that will maintain gig workers as independent contractors. ]. Uber stated it would pay that amount, but "under protest." He came from a family steeped in New Jersey politics. CA Rules repeatedly state AAA will charge fees as outlined in the attached fee schedule. in the fee schedule (see Carma Devs. Simultaneously, Uber moved for a preliminary injunction While Uber alleges that it, the claimants, and AAA are all bound by the CA Rules and Consumer Due Process Protocol Statement of Principles (Protocol), neither of those documents requires AAA to charge reasonable fees related to its actual costs. breach of the arbitration agreement, is in default of the arbitration, and waives its right to compel No aspect of this advertisement has been approved by the Supreme Court of New Jersey. case, Uber would owe AAA a $500 filing fee, a $1,400 standard case management fee, and a Password (at least 8 characters required). filed over 31,000 substantively identical arbitration demands with AAA on behalf of the Uber Agricole Indosuez v Rossiyskiy Kredit Bank, 94 NY2d 541, 545, 548 [2000]; JSC VTB Bank v Mavlyanov, 154 with its reasonable, actual costs. ' Ul,*tr+}CHrMUfqiKhTQY,!-3$Ew.9%Ko( ~2sa?`}lR82-2z:0Cy:M^[]sxv`s&SK`s{D*c)!@(L8Fbku9 %*eSx/uPfq)P#d%FmLD)x0#Io3~Uyk2YaNXF-b ARRR-K|bXbJ\vvq*A;K5#3B{uc/}6LinJY/WXWU50~LVrU|v0G{VW3W3IW`k]mb[iU%\~qTM~/Y`;P(X=T>f{ZDQp}H2YpEq '!^g0nKWTa- BM'CY$g,#RGiLl|OaT. ), entered October 15, 2021, which denied plaintiffs' motion for preliminary injunctive relief, unanimously affirmed, without costs. Thats on top of whatever it might pay to settle the cases and what Uber pays its own lawyers. It is also unlikely to succeed under the unfair prong, as AAA's enforcement of its fee schedule does not offend public policy, and is not immoral, unethical, oppressive, unscrupulous, or substantially injurious to consumers (People v Casa Blanca Convalescent Homes, 159 Cal.App.3d 509, 530 [1984]). Law360and Reutersreported on the decision. The decision set off a wave of new voting laws, including limits on early and absentee voting. Uber failed to demonstrate AAA breached any agreed upon terms by failing to charge fees commensurate with its reasonable, actual costs. He was the quintessential legal chess player. Allegedly, Consovoy eventually was able to file more than 31,000 such claims against Uber in Justice Reeds Oct. 14 decision on Ubers motion for a preliminary injunction to suspend AAAs invoice came after two days of arguments and testimony from Uber and AAA witnesses. Identifiers and Personal Information. It has grown to twenty lawyers, many who've arrived from clerkships . Mr. Consovoy graduated from Monmouth University in 1996 with a degree in political science, and from the Antonin Scalia Law School at George Mason University in 2001. Last month, a California appeals court ruled against Uber and Lyft, saying they will have to reclassify their drivers as employees in the state. Consovoy McCarthy PLLC (collectively, the "Firm," "we," "us," or "our") is committed to safeguarding the privacy of visitors to our website (the "Website"), contacts for our clients and prospective clients, contacts for suppliers of goods and services to the Firm, candidates for employment or engagement, and any other individuals about whom the Firm obtains . (iStock). ConcurAcosta, P.J., Kern, Gonzlez, Shulman, JJ. claims down into five different batches, with the first batch containing 477 non-California cases, Because AAA determined that the Consovoy-filed demands against Uber met its mass arbitration criteria, it charged Uber an arbitration initiation fee of only about $140 per claim, not the $500 that the company would have had to pay for an individual consumer demand for arbitration. Petitioners are 7,271 customers of the Uber service Uber Eats. xc```b`` f`a`} `6320ff\.U K@ #hPspu|t#`_%b(*bhXH;Z1M;dmXH.L}-r* 7V4Hiud7)06:C\r!6$*r#!1X/Sl`9;k# DYi We heard loud and clear from consumers this was a feature they wantedand well continue to make it a priority., GET FOX BUSINESS ON THE GO BY CLICKING HERE. Uber sued the American Arbitration Association, arguing that it shouldnt have to pay several thousand dollars for each case since all of the users had nearly identical claims. Because Supreme Court did not abuse its discretion in finding that Uber failed to establish a likelihood of success on the merits on any claim, this Court need not reach the issue of arbitral immunity under California law. approximately $4.3 million, which Uber paid without objection. unlawful prong, as Uber has not shown a likelihood of success on the underlying breach of the the fees after the parties could not agree to a more efficient manner of proceeding with over <>/ProcSet[/PDF/Text/ImageB/ImageC/ImageI]/Font<>>>/MediaBox[ 0 0 612 792]/Contents 45 0 R /Parent 36 0 R /Type/Page/Tabs/S/Group<>>> endobj December 1, 2020. On April 14, a four-judge panel of New York's Appellate Division, First Department ruled that the ride-sharing platform should pay after it could not demonstrate how it would be successful in pursuing claims of breach of contract, fair dealing, unjust enrichment and unfair competition in violation of California's Unfair Competition Law. ], Inc. v Marathon Dev. Uber's Terms of Use, which contains a provision stating that any dispute between the customer LAWSUIT ALLEGES UBER COERCED DRIVERS INTO SUPPORTING CALIFORNIA PROP. preclude class, collective, or representative claims in its arbitration agreement with its Competition Law, which provides that "unfair competition shall mean and include any unlawful In seeking a preliminary injunction, Uber had to "demonstrate, by clear and convincing evidence, (1) a likelihood of success on the merits, (2) irreparable injury absent the granting of the preliminary injunction, and (3) a balancing of the equities in the movant's favor" (Gilliland v Acquafredda Enters., LLC, 92 A.D.3d 19, 24-25 [1st Dept 2011]; see CPLR 6301). endobj 2022). 15732 Case No. For a time after the killing of George Floyd, Uber waived fees for deliveries from certain Black-owned restaurants, leading to the claim of discrimination. His paternal grandfather, George, served as mayor of Franklin Township, in the middle of the state, in the 1960s. Uber was ordered to foot the bill for thousands of arbitration cases filed against it. His success helped distinguish the school, in the Virginia suburbs outside Washington, as a hothouse of conservative legal thinking and training. irreparable harm caused by AAA by changing the assigned arbitration organization for the 31,000 In June, Uber announced that it would be waiving delivery fees for independent Black-owned restaurants as an incentive for customers to order from those businesses. Uber solely seeks declaratory judgments for the four claims in its complaint. According to the fee schedule, for each case, Uber would owe AAA a $500 filing fee, a $1,400 standard case management fee, and a $1,500 arbitrator fee, for a total of approximately $107 million if charged the full amount under the fee schedule. https://www.hugheshubbard.com/legal-notices-methodologies. He knew, if he made a move in this direction, what the first four options his adversaries would take. The law firm Consovoy McCarthy PLLC then gathered more than 31,000 claimants who paid delivery fees to non-Black-owned restaurants and filed arbitration demands claiming that the fees constituted unlawful reverse race discrimination. AAA responded by stating if 2022 N.Y. Slip Op. Mr. Consovoy was perhaps best known for his work with Edward Blum, the conservative activist who engineered the effort to have the Supreme Court overturn Section 4 of the Voting Rights Act and, more recently, to outlaw affirmative action in higher education. October 25, 2021 In an important victory for firm client American Arbitration Association (AAA), Hughes Hubbard helped secure denial of Ubers motion for a preliminary injunction seeking to suspend AAAs $10 million invoice to the ride-hailing giant for administrative costs associated with 7,771 arbitration cases. In a statement emailed to FOX Business, Uber spokesperson Meghan Casserlysaidthe company intends to continue the policy. AAA then broke the For information regarding the selection process of awards, please visit https://www.hugheshubbard.com/legal-notices-methodologies. Mr. Consovoy often led the charge in attacking existing laws in court or defending new ones. endobj 655549/21Case No. 43 0 obj Unlock these benefits today when you sign-up for a FREE 7-day trial: Read more on the latest California legal trends in Lexis, 2023, Portfolio Media, Inc. | About Law360 Pulse | Contact Us | Terms | Privacy Policy, Enter your details below and select your area(s) of interest to receive Law360 Pulse daily newsletters, Email (NOTE: Free email domains not supported). Addressing the substance of the petitioners claims, Uber argues that the court should not hold it accountable for the $10 million AAA fees because it does not owe the AAA all of this money, as it is currently arguing before the New York court. Mr. Consovoy represented Mr. Trump in his fight to prevent Congress from forcing the release of his tax returns. Readers are advised that prior results do not guarantee a similar outcome. And thats actually, sadly, a rare thing., William Consovoy Dies at 48; Took Conservative Cases to Supreme Court, https://www.nytimes.com/2023/01/12/us/william-consovoy-dead.html. Shortly after, the law firm of Consovoy McCarthy PLLC began searching for Uber Eats customers who paid a delivery fee to a nonblack owned restaurant during the relevant time and asking them to challenge the lawfulness of Uber's policy by claiming it constituted unlawful reverse race discrimination. While Justice Ostrager initially maintained that his relationship with Justice Ramos would not affect his presiding over the case, he decided to recuse himself after AAA objected to Ubers presentation of a well-known, recently retired Commercial Division justice as an expert in that same court. Uber solely seeks declaratory Were proud to support Black-owned businesses with this initiative, as we know theyve disproportionately been impacted by the health crisis, Casserly said. He clerked for Judge Edith Jones of the U.S. Court of Appeals for the Fifth Circuit before becoming the first student from George Masons law school to clerk for the Supreme Court. He and Mr. McCarthy steadily expanded their firm from a two-man start-up to a 22-lawyer operation. Schnader Harrison Segal & Lewis LLP, New York (Theodore L. Hecht of counsel), for This is the second time Ubers individual-arbitration requirement has blown up in its face. Attorney advertising. Uber then sought relief from the fees with a New York state court. So in court it wasnt cheap appeals to emotion or anything like that. Despite his clear conservative leanings, Mr. Consovoy won praise from many of his legal sparring partners on the left, both for his acumen and for the dispassionate way he approached his ideologically contentious cases. 78 0 obj the fee schedule. [Cal. consumers, and AAA's fees are directly attributable to that decision (see Avenue A Assoc.