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Case 3:20-cv-02211-EMC Document 96 Filed 05/14/20 Page 1 of 19
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`UNITED STATES DISTRICT COURT
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`NORTHERN DISTRICT OF CALIFORNIA
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`JOHN CAPRIOLE, et al.,
`Plaintiffs,
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`v.
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`UBER TECHNOLOGIES, INC., et al.,
`Defendants.
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`
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`
`
`Case No. 20-cv-02211-EMC
`
`
`ORDER GRANTING DEFENDANTS’
`MOTION TO COMPEL
`ARBITRATION AND DENYING
`PLAINTIFFS’ MOTION FOR
`PRELIMINARY INJUNCTION
`Docket Nos. 42, 67
`
`I.
`John Capriole (“Mr. Capriole”), Martin El Koussa (“Mr. El Koussa”), and Vladimir
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`INTRODUCTION
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`Leonidas (“Mr. Leonidas”) (collectively “Plaintiffs”) bring this class action to compel Uber
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`Technologies, Inc. (“Uber”) to comply with Massachusetts labor laws and to classify Uber drivers
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`as employees. Uber and Dara Khosrowshahi (“Mr. Khosrowshahi), the President and CEO of
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`Uber, are named as Defendants. Plaintiffs assert that, as a result of Uber’s alleged
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`misclassification of drivers, they have been forced to bear the expenses of their employment, been
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`denied Massachusetts minimum wage for hours worked, been deprived of overtime pay, and—as
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`is particularly relevant to their current motion—been denied paid sick leave. This case was
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`originally filed in federal court in Massachusetts but was transferred to the Northern District of
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`California pursuant to a forum selection clause in Uber’s driver agreement. In September 2019,
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`Plaintiffs filed a motion for a preliminary injunction in Massachusetts, but that motion was denied
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`and is currently on appeal before the First Circuit. Plaintiffs subsequently filed a new Emergency
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`Motion for Preliminary Injunction, which is now pending before this Court. Defendants in turn
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`have filed a Motion to Compel Arbitration.
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`Case 3:20-cv-02211-EMC Document 96 Filed 05/14/20 Page 2 of 19
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`
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`A.
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`Factual Background
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`II.
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`BACKGROUND
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`Mr. Capriole is a resident of Haverhill, Massachusetts. See Second Amended Complaint
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`(“SAC”) ¶ 7, Docket No. 77. He has worked there as an Uber driver since April 2016. Id. ¶¶ 7,
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`35. Mr. El Koussa is a resident of Boston Massachusetts. Id. ¶ 8. He has worked there as an Uber
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`driver since July 2014. Id. Mr. Leonidas is a resident of Braintree, Massachusetts. Id. ¶ 9. He
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`has worked there as an Uber driver since May 2016. Id. Uber is a corporation with its
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`headquarters in San Francisco. Id. ¶¶ 11, 15. Mr. Khosrowshahi is the President and Chief
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`Executive Officer of Uber; Plaintiffs assert that he is “responsible for Uber’s pay practices and
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`employment policies.” Id. ¶ 12. (Together, Uber and Mr. Khosrowshahi are referred to as
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`“Defendants.”)
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`Plaintiffs bring this class action on behalf of all “individuals who have worked as Uber
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`drivers in Massachusetts who have not released all of their claims against Uber.” SAC ¶ 10. As
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`noted above, they contend that “Uber has misclassified its drivers, including Plaintiffs John
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`Capriole, Martin El Koussa, and Vladimir Leonidas as independent contractors when they should
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`be classified under Massachusetts law . . . as employees.” Id. ¶ 2. Because Uber drivers are not
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`classified as employees, they are required “to pay business expenses (including but not limited to
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`the cost of maintaining their vehicles, gas, insurance, phone and data expense, and other costs),”
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`they are not guaranteed minimum wage or overtime premiums, and they do not receive paid sick
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`leave, as would otherwise be required under Massachusetts law. Id. ¶ 2. Massachusetts requires
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`employers to provide “a minimum of one hour of earned sick time for every thirty hours worked
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`by an employee . . . but employees shall not be entitled to use accrued earned sick time until the
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`90th calendar day following commencement of their employment.” MASS. GEN. LAWS. ch. 149, §
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`148C; see also SAC ¶ 2. Employees may earn and use up to forty hours of paid sick time per
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`calendar year. MASS. GEN. LAWS. ch. 149, § 148C.
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`Plaintiffs contend that because drivers are not classified as employees, many of them
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`“struggle to support themselves” and, as a result, “feel the need to continue working . . . even if
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`they feel ill.” FAC ¶¶ 3, 4. While such a dilemma might be problematic in normal times, in light
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`Case 3:20-cv-02211-EMC Document 96 Filed 05/14/20 Page 3 of 19
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`
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`of the “worldwide crisis” generated by COVID-19, Uber’s employee-classification and sick-leave
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`policies are exacerbating a life-threating global emergency. Id. ¶ 4. Without the option of paid
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`sick leave, Uber drivers who cannot afford to make a different choice “will continue working and
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`risking exposing hundreds of riders who enter their car[s] on a weekly basis to this deadly
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`disease.” Id. ¶ 5. Such actions wholly contravene the advice of public health officials, who have
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`“advised that anyone who feels ill should stay home and not go to work.” Id. ¶ 4. Thus, Plaintiffs
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`contend that Uber’s policies “creat[e] an immediate danger, not only to Uber drivers, but to the
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`general public as well.” Id. ¶ 5.
`B.
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`Arbitration Agreement
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`In moving to compel arbitration, Uber cites two arbitration agreements, which are
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`contained in Uber’s 2015 Technology Services Agreement (“2015 Agreement”) and the 2020
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`Platform Services Agreement (“2020 Agreement”). See Reply in Support of Motion to Compel
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`Arbitration at 1, Docket No. 83. It appears that Mr. El Koussa and Mr. Leonidas “agreed to
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`individual arbitration in the 2020 Platform Access Agreement . . . and did not opt out.”1 Id. Mr.
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`Capriole, however, agreed to both the 2015 and the 2020 Agreement, but opted out of the 2020
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`Agreement. See Motion to Compel Arbitration (“MTC”) at 4, Docket No. 67 (citing Exh. 7 to
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`Declaration of Brad Rosenthal (“Rosenthal Decl.”), Docket No. 69-7). Uber contends that,
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`because Mr. Capriole did not originally opt out of the 2015 Agreement, he remains bound to
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`arbitrate his claims because of a provision of the 2020 Agreement which informs any drivers
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`opting out of that agreement that they remain bound by any existing arbitration agreement to
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`which they are a party with Uber. See MTC at 5. Uber’s contention is discussed in greater detail
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`below. See Section III.B.1.
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`In Uber’s 2015 Technology Services Agreement, Section 15.3 sets forth the terms of the
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`company’s Arbitration Provision:
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`
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`IMPORTANT: This Arbitration Provision will require you to
`resolve any claim that you may have against the Company or Uber
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`1 Presumably, based on when they began driving, Mr. El Koussa and Mr. Leonidas also agreed to
`the 2015 Agreement; but neither party contends it changes the analysis here.
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`Case 3:20-cv-02211-EMC Document 96 Filed 05/14/20 Page 4 of 19
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`on an individual basis, except as provided below, pursuant to the
`terms of the Agreement unless you choose to opt out of the
`Arbitration Provision. Except as provided below, this provision will
`preclude you from bringing any class, collective, or representative
`action (other than actions under the Private Attorneys General Act
`of 2004 (“PAGA”)), California Labor Code § 2698 et seq.
`(“PAGA”) against the Company or Uber, and also precludes you
`from participating in or recovering relief under any current or future
`class, collective, or representative (non-PAGA) action brought
`against the Company or Uber by someone else.
`
`This Arbitration Provision is governed by the Federal Arbitration
`Act, 9 U.S.C. § 1 et seq. (the “FAA”) and evidences a transaction
`involving interstate commerce. This Arbitration Provision applies to
`any dispute arising out of or related to this Agreement or termination
`of the Agreement and survives after the Agreement terminates.
`
` .
`
` . .
`
`
`Except as it otherwise provides, this Arbitration Provision is
`intended to apply to the resolution of disputes that otherwise
`would be resolved in a court of law or before any forum other
`than arbitration, with the exception of proceedings that must be
`exhausted under applicable law before pursuing a claim in a
`court of law or in any forum other than arbitration. Except as it
`otherwise provides, this Arbitration Provision requires all such
`disputes to be resolved only by an arbitrator through final and
`binding arbitration on an individual basis only and not by way
`of court or jury trial, or by way of class, collective, or
`representative action.
`
`Except as provided in Section 15.3(v), below, regarding the Class
`Action Waiver, such disputes include without limitation disputes
`arising out of or relating to interpretation or application of this
`Arbitration Provision, including the enforceability, revocability or
`validity of the Arbitration Provision or any portion of the Arbitration
`Provision. All such matters shall be decided by an Arbitrator and
`not by a court or judge. However, as set forth below, the preceding
`sentences shall not apply to disputes relating to the interpretation or
`application of the Class Action Waiver or PAGA Waiver below,
`including their enforceability, revocability or validity.
`
` .
`
` . .
`
`You and the Company agree to resolve any dispute that is in
`arbitration on an individual basis only, and not on a class,
`collective action, or representative basis (“Class Action
`Waiver”). The Arbitrator shall have no authority to consider or
`resolve any claim or issue any relief on any basis other than an
`individual basis. The Arbitrator shall have no authority to
`consider or resolve any claim or issue any relief on a class,
`collective, or representative basis. Notwithstanding any other
`provision of this Agreement, the Arbitration Provision or the JAMS
`Streamlined Arbitration Rules & Procedures, disputes regarding the
`enforceability, revocability or validity of the Class Action Waiver
`may be resolved only by a civil court of competent jurisdiction and
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`Case 3:20-cv-02211-EMC Document 96 Filed 05/14/20 Page 5 of 19
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`not by an arbitrator. In any case in which (1) the dispute is filed as a
`class, collective, or representative action and (2) there is a final
`judicial determination that all or part of the Class Action Waiver [is]
`unenforceable, the class, collective, and/or representative action to
`that extent must be litigated in a civil court of competent
`jurisdiction, but the portion of the Class Action Waiver that is
`enforceable shall be enforced in arbitration.
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` .
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` . .
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`Arbitration is not a mandatory condition of your contractual
`relationship with the Company. If you do not want to be subject
`to this Arbitration Provision, you may opt out of this
`Arbitration Provision by notifying the Company in writing of
`your desire to opt out of this Arbitration Provision, either by (1)
`sending, within 30 days of the date this Agreement is executed
`by you, electronic mail to optout@uber.com, stating your name
`and intent to opt out of the Arbitration Provision or (2) by
`sending a letter by U.S. Mail, or by any nationally recognized
`delivery service (e.g[.], UPS, Federal Express, etc.), or by hand
`delivery to:
`
`Legal
`Rasier, LLC
`1455 Market St., Ste. 400
`San Francisco CA 94103
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`2015 Agreement, Docket No. 69-1 (emphasis and formatting in the original).
`C.
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`Procedural Background
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`Mr. Capriole filed a class action complaint in the U.S. District Court for the District of
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`Massachusetts on September 12, 2019. See Docket No. 1. (Mr. Capriole was the sole Plaintiff
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`named in the original complaint.) On September 19, 2019, he filed a Motion for Preliminary
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`Injunction, seeking essentially the same relief sought in the current motion for a preliminary
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`injunction: an injunction prohibiting Uber from “classifying its drivers in Massachusetts as
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`‘independent contractors’” and an order directing “Uber to classify its drivers as employees and
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`comply with Massachusetts wage laws.” See Docket No. 4 at 11–12. Uber filed a Motion to
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`Compel Arbitration and to Stay Proceedings (pending arbitration). See Docket No. 10. It also
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`filed a Motion to Transfer [the] Case to [the] Northern District of California on October 17, 2019.
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`See Docket No. 12.
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`On March 12, 2020, while the previously filed motions were still pending, Mr. Capriole
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`filed an Emergency Motion for Leave to File a First Amended Complaint, in order to add a claim
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`relating to paid sick leave. See Docket No. 35. Judge Talwani granted the motion for leave to file
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`an amended complaint on March 18, 2020. See Docket No. 3. On March 20, 2020, Judge
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`Talwani denied Mr. Capriole’s Motion for a Preliminary Injunction, see Docket No. 41. On
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`March 23, 2020, Mr. Capriole filed a new Emergency Motion for Preliminary Injunction (which is
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`now pending before this Court following transfer of the case, see Docket No. 42). The following
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`day, Mr. Capriole filed a Motion for Leave to File Second Amended Complaint. See Docket No.
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`43. That Complaint sought to add Mr. El Koussa and Mr. Leonidas (who had filed declarations in
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`support of the Emergency Motion for Preliminary Injunction) as named Plaintiffs and to add “an
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`additional statement of fact, that Plaintiff Capriole has driven across state lines while driving for
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`Uber Technologies, Inc.” Id.
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`On March 27, 2020, the Massachusetts Attorney General was granted permission to file an
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`amicus curiae brief in support of Plaintiff’s Emergency Motion For Preliminary Injunctive Relief.
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`See Docket Nos. 44–46. On March 30, 2020, Mr. Capriole appealed the denial of his Motion for a
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`Preliminary Injunction to the First Circuit Court of Appeals. See Docket No. 51.
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`On March 31, 2020, Judge Talwani granted Defendants’ Motion to Transfer and
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`transferred the case to this Court, where it was related to Verhines v. Uber Technologies, Inc.
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`(Case No. 3:20-cv-01886-EMC). Mr. Capriole’s outstanding Emergency Motion for Preliminary
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`Injunction and Defendants’ Motion to Compel Arbitration were set for a telephonic hearing on
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`April 22, 2020. Id. The Court also granted Mr. Capriole’s Motion for Leave to File [a] Second
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`Amended Complaint. See Docket No. 76. The Second Amended Complaint, which added Mr. El
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`Koussa and Mr. Leonidas as named Plaintiffs, was filed on April 10, 2020. See Docket No. 77.
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`The Court heard the parties’ arguments on Plaintiffs’ Emergency Motion for Preliminary
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`Injunction and Defendants’ Motion to Compel Arbitration on April 22, 2020. See Docket No. 89.
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`At the hearing, the parties were directed to meet and confer in an effort to reach a resolution with
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`respect to Plaintiffs’ Preliminary Injunction in view of the resolution of the preliminary injunction
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`motion reached by the parties in Verhines. Id. The Court took the matters under submission. Id.
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`On April 30, 2020, the parties submitted a joint case management statement indicating that the two
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`sides had not been able to reach a resolution as to the preliminary injunction and that Plaintiffs
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`Case 3:20-cv-02211-EMC Document 96 Filed 05/14/20 Page 7 of 19
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`seek a ruling on the preliminary injunction motion from the Court.
`III.
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`DISCUSSION
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`A.
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`Legal Standards
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`Under the Federal Arbitration Act (“FAA”), “[a] written provision in . . . a contract
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`evidencing a transaction involving commerce to settle by arbitration a controversy thereafter
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`arising out of such contract . . . shall be valid, irrevocable, and enforceable, save upon such
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`grounds as exist at law or in equity for the revocation of any contract.” 9 U.S.C. § 2. The FAA
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`establishes “a liberal federal policy favoring arbitration agreements.” Epic Sys. Corp. v. Lewis,
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`138 S. Ct. 1612, 1621 (2018) (citing 9 U.S.C. § 2); see also Blair v. Rent-A-Ctr., Inc., 928 F.3d
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`819, 825 (9th Cir. 2019) (quoting 9 U.S.C. § 2). Courts “must place arbitration agreements on an
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`equal footing with other contracts . . . and enforce them according to their terms.” AT&T Mobility
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`LLC v. Concepcion, 563 U.S. 333, 339 (2011) (internal citations omitted).
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`To determine “the validity of an arbitration agreement, federal courts apply state law
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`contract principles.” Lau v. Mercedes-Benz USA, LLC, No. CV 11-1940 MEJ, 2012 WL 370557,
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`at *2 (N.D. Cal. Jan. 31, 2012) (citing Circuit City Stores, Inc. v. Adams, 279 F.3d 889, 892 (9th
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`Cir. 2002)). However, arbitration agreements may “be invalidated by ‘generally applicable
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`contract defenses, such as fraud, duress, or unconscionability,’ but not by defenses that apply only
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`to arbitration or that derive their meaning from the fact that an agreement to arbitrate is at issue.”
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`Concepcion, 563 U.S. at 339.
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`Typically, “the question whether an issue is arbitrable . . . is ‘an issue for judicial
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`determination . . . .’” Mohamed v. Uber Techs., Inc., 848 F.3d 1201, 1208 (9th Cir. 2016) (citing
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`Oracle Am., Inc. v. Myriad Grp. A.G., 724 F.3d 1069, 1072 (9th Cir. 2013)). In other words,
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`“there is a presumption that courts will decide which issues are arbitrable; the federal policy in
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`favor of arbitration does not extend to deciding questions of arbitrability.” Oracle Am., Inc., 724
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`F.3d at 1072. However, where “the parties clearly and unmistakably provide otherwise, the
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`question of whether the parties agreed to arbitrate” may be decided by an arbitrator. AT&T Techs.,
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`Inc. v. Commc’ns Workers of Am., 475 U.S. 643, 649 (1986). “Such clear and unmistakable
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`evidence of agreement to arbitrate arbitrability might include . . . a course of conduct
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`demonstrating assent . . . or . . . an express agreement to do so.” Momot v. Mastro, 652 F.3d 982,
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`988 (9th Cir. 2011).
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`Arbitration agreements may also contain waivers of class action procedures that require
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`parties to pursue their claims individually. “In the Federal Arbitration Act, Congress has
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`instructed federal courts to enforce arbitration agreements according to their terms—including
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`terms providing for individualized proceedings.” Epic Sys., 138 S. Ct. at 1619.
`B.
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`Analysis
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`The first question presented here is which motion the Court should resolve first, Plaintiffs’
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`Motion for Preliminary Injunction or Defendants’ Motion to Compel Arbitration. As Judge
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`Chhabria recently noted in a case involving similar claims brought against Lyft, “[i]t would not be
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`appropriate to plow ahead on the motion for a preliminary injunction before ruling on
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`[Defendant’s] motion to compel.” Rogers v. Lyft, Inc., No. 20-CV-01938-VC, 2020 WL 1684151,
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`at *3 (N.D. Cal. Apr. 7, 2020). The Ninth Circuit has explained that a district court’s ability to
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`grant injunctive relief prior to arbitration is limited; a “district court may issue interim injunctive
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`relief on arbitrable claims if interim relief is necessary to preserve the status quo and the
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`meaningfulness of the arbitration process.” Toyo Tire Holdings Of Americas Inc. v. Cont’l Tire N.
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`Am., Inc., 609 F.3d 975, 981 (9th Cir. 2010). Toyo Tire further stated that its holding was
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`consistent with the majority of the Ninth Circuit’s sister circuits, which had emphasized the
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`preservation of the status quo in such cases. Id. (citing, e.g., Merrill Lynch, Pierce, Fenner &
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`Smith, Inc. v. Bradley, 756 F.2d 1048, 1050–55 (4th Cir. 1985) (“[W]e conclude that the language
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`of § 3 [of the FAA] does not preclude a district court from granting one party a preliminary
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`injunction to preserve the status quo pending arbitration.”); Merrill Lynch, Pierce, Fenner &
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`Smith, Inc. v. Dutton, 844 F.2d 726, 726–28 (10th Cir. 1988) (affirming district court’s grant of
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`preliminary injunction to preserve status quo until arbitration panel takes jurisdiction)). Because
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`the injunctive relief sought here would upend, rather than preserve, the status quo and would not
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`preserve the meaningfulness of the arbitration process, consideration of injunctive relief prior to
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`deciding Uber’s Motion to Compel Arbitration would be improper. Cf. O’Connor v. Uber Techs.,
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`Inc., 904 F.3d 1087, 1090 (9th Cir. 2018) (reversing class certification because arbitration
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`Case 3:20-cv-02211-EMC Document 96 Filed 05/14/20 Page 9 of 19
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`
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`agreements found enforceable). Accordingly, the Court turns first to the question whether to grant
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`Defendants’ Motion to Compel Arbitration.
`1.
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`Is Mr. Capriole Bound by the Arbitration Agreements?
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`Before compelling arbitration, the Court must determine that the parties actually consented
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`to resolve disputes through arbitration. “‘[T]he first principle that underscores all of our
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`arbitration decisions’ is that ‘[a]rbitration is strictly a matter of consent.’” Lamps Plus, Inc. v.
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`Varela, 139 S. Ct. 1407, 1415 (2019) (quoting Granite Rock Co. v. Teamsters, 561 U.S. 287, 299
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`(2010)). Thus, “[a] court may compel arbitration of an issue, including threshold issues, only after
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`first determining for itself that the parties in fact agreed to do so.” Lee v. Postmates Inc., No. 18-
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`CV-03421-JCS, 2018 WL 6605659, at *5 (N.D. Cal. Dec. 17, 2018), motion to certify appeal
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`granted, No. 18-CV-03421-JCS, 2019 WL 1864442 (N.D. Cal. Apr. 25, 2019) (citing Granite
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`Rock, 561 U.S. at 299). Where, as here, a party argues that they are not bound by an arbitration
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`agreement because they have opted out of an agreement that might otherwise bind them, courts
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`have seen fit to address the opt-out issue prior to compelling arbitration. See, e.g., Magana v.
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`DoorDash, Inc., 343 F. Supp. 3d 891, 897 (N.D. Cal. 2018) (examining plaintiffs’ “novel legal
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`argument” related to opting out of arbitration agreement prior to compelling arbitration despite
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`extremely expansive language as to the scope of arbitration agreement); Lee, 2018 WL 6605659,
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`at *5–6 (discussing whether plaintiffs opted out of arbitration agreement prior to compelling
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`arbitration despite the fact that agreement stated: “Postmates and Contractor mutually agree that
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`any and all disputes or claims between the parties will be resolved in individual arbitration.”).
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`As noted above, there is no contention that Mr. El Koussa or Mr. Leonidas opted out of
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`arbitrating their claims against Uber; however, Mr. Capriole did opt out of the 2020 Agreement.
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`Thus, the Court must determine whether he is nonetheless bound to arbitrate his claims because he
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`did not opt out of the 2015 Agreement. Uber contends that he is. Uber relies on two provisions in
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`the 2020 Agreement to argue that Mr. Capriole is still bound by the 2015 Agreement. First, part
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`(c) of Section 13.8 (“Your Right to Opt Out of This Arbitration Provision”) of the 2020
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`Case 3:20-cv-02211-EMC Document 96 Filed 05/14/20 Page 10 of 19
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`
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`Agreement provides:
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`If you opt out of this Arbitration Provision and at the time of your
`receipt of this Agreement you were bound by an existing agreement
`to arbitrate disputes arising out of or related to your use of our
`Platform and Driver App, that existing arbitration agreement will
`remain in full force and effect.
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`2020 Agreement, Section 13.8(c), Docket No. 69-4 (emphasis added). Because Mr. Capriole
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`signed the 2015 Arbitration Agreement, but did not opt out of it within 30 days (or ever), he had at
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`the time of the 2020 Agreement an “existing agreement to arbitrate” his disputes with Uber.
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`Opting out of the 2020 Agreement does not operate to opt him out of the prior 2015 agreement.
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`See, e.g., Wickberg v. Lyft, Inc., 356 F. Supp. 3d 179, 185 (D. Mass. 2018) (concluding plaintiff
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`was bound by earlier arbitration agreement despite the fact he opted out of a subsequent arbitration
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`agreement which contained a similar provision to the one here).
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`In addition, Section 13.2 (“Limitations on How This Arbitration Provision Applies”) of the
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`2020 Agreement provides:
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`If, at the time of your receipt of this Agreement, you were bound by
`an existing arbitration agreement with us, that arbitration agreement
`will continue to apply to any pending litigation, even if you opt out
`of this Arbitration Provision.
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`2020 Agreement, Section 13.2, Docket No. 69-4 (emphasis added). As noted above, Mr. Capriole
`
`filed this lawsuit on September 12, 2019. See Docket No. 1. Mr. Capriole thus remains bound by
`
`the 2015 Agreement.
`2.
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`Does the FAA Apply to Uber’s Arbitration Agreement?
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`While the FAA is a “liberal” policy that favors arbitration, Epic Systems, 138 S. Ct. at
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`1621, the FAA contains an express exception. Section 1 of the Act provides that “nothing herein
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`contained shall apply to contracts of employment of seamen, railroad employees, or any other
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`class of workers engaged in foreign or interstate commerce.” 9 U.S.C. § 1.
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`Plaintiffs contend that this Section 1 exemption (the “transportation worker exemption”)
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`from the FAA applies to them. As the party opposing arbitration, Plaintiffs have the burden of
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`proving that the exemption applies. See, e.g., Shearson/Am. Exp., Inc. v. McMahon, 482 U.S. 220,
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`Case 3:20-cv-02211-EMC Document 96 Filed 05/14/20 Page 11 of 19
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`227 (1987) (“The burden is on the party opposing arbitration, however, to show that Congress
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`intended to preclude a waiver of judicial remedies for the statutory rights at issue.”). To prove that
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`the exemption applies, Plaintiffs must establish that a “contract of employment” exists and that
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`they are part of a “class of workers engaged in foreign or interstate commerce.” See 9 U.S.C. § 1.
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`The Supreme Court has counseled that the exception is to be interpreted narrowly. Circuit City
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`Stores, Inc. v. Adams, 532 U.S. 105, 106 (2001) (“The statutory context in which the ‘engaged in
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`commerce’ language is found, i.e., in a residual provision, and the FAA’s purpose of overcoming
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`judicial hostility to arbitration further compel that the § 1 exclusion be afforded a narrow
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`construction.”).
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`The critical issue is whether Uber drivers are “engaged in interstate commerce.” That is a
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`question for the court to decide. In New Prime Inc. v. Oliveira, 139 S. Ct. 532 (2019), the
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`Supreme Court explained that “a court should decide for itself whether § 1’s ‘contracts of
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`employment’ exclusion applies before ordering arbitration.” Id. at 537.
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` In Circuit City, the Supreme Court faced the question of how broadly to interpret the
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`Section 1 exemption to the FAA. In concluding that only employment contracts for transportation
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`workers (as opposed to all employment contracts) are exempt from the FAA, the Court
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`distinguished between the phrases “affecting commerce” or “involving commerce” (used in
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`Section 2 to describe the general coverage of the FAA) and “engaged in commerce” (used in
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`Section 1 to describe the scope of the exemption). It noted that “the words ‘involving commerce’
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`evidence the congressional intent to regulate to the full extent of its commerce power,” Circuit
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`City, 532 U.S. at 114. In contrast, the words “‘engaged in commerce’ are understood to have a
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`more limited reach.” Id. at 115; see also id. at 118 (citing Gulf Oil Corp. v. Copp Paving Co., 419
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`U.S. 186, 195 (1974)) (“The plain meaning of the words ‘engaged in commerce’ is narrower than
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`the more open-ended formulations ‘affecting commerce’ and ‘involving commerce.’”). As Judge
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`Chhabria noted in Rogers, the phrase “engaged in commerce” includes not everyone whose work
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`might generally affect commerce, but “‘only persons or activities within the flow of interstate
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`commerce,’ meaning ‘the practical, economic continuity in the generation of goods and services
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`for interstate markets and their transport and distribution to the consumer.’” Rogers, 2020 WL
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`11
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`Northern District of California
`United States District Court
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`

`

`Case 3:20-cv-02211-EMC Document 96 Filed 05/14/20 Page 12 of 19
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`1684151, at *5 (quoting Gulf Oil, 419 U.S. at 195).
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`In order to bring themselves within the narrower meaning of “engaged in interstate
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`commerce,” Plaintiffs allege both that Uber drivers sometimes cross state lines while transporting
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`passengers and also that Uber drivers frequently pick up and drop off passengers at airports,
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`thereby placing themselves within the flow of interstate commerce. See Opposition to Motion to
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`Compel Arbitration (“MTC Opp.”) at 4, 16, Docket No. 78. As to crossing state lines while
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`transporting passengers, only Mr. Capriole alleges that he has done so. See Declaration of John
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`Capriole (“Capriole Decl.”) ¶ 7, Docket No. 16-8. However, the relevant inquiry is not whether an
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`individual driver has crossed state lines, but whether the class of drivers crosses state lines. See
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`Lee v. Postmates Inc., No. 18-CV-03421-JCS, 2018 WL 4961802, at *8 (N.D. Cal. Oct. 15, 2018),
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`motion to certify appeal granted, No. 18-CV-03421-JCS, 2019 WL 1864442 (N.D. Cal. Apr. 25,
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`2019) (quoting Bacashihua v. U.S. Postal Serv., 859 F.2d 402 (6th Cir. 1988)) (“the concern was
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`not whether the individual worker actually engaged in interstate commerce, but whether the class
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`of workers to which the complaining worker belonged engaged in interstate commerce”).
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`On that point, Uber has provided evidence that only 2.5% of “all trips fulfilled using the
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`Uber Rides marketplace in the United States between 2015 and 2019 . . . started and ended in
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`different states.” Contreras Decl. ¶ 4. In Massachusetts, that number is even smaller: “[o]f all
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`trips fulfilled using the Uber Rides marketplace in Massachusetts between 2015 and 2019, 99.7%
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`of these trips began and ended in Massachusetts, while the other 0.3% of all such trips started and
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`ended in different states.” Id. ¶ 5. And for Mr. Capriole himself, the number is roughly as small:
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`only “0.4% of Mr. Capriole’s total trips crossed state lines.” Rosenthal Decl. ¶ 43.
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`With respect to Plaintiffs’ contention that Uber drivers are engaged in interstate commerce
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`because they play a central role in transporting people to and from airports, see MTC Opp. at 16
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`n.28 (“Plaintiffs have all provided innumerable rides to and from the airport.”); see also id. at 4
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`(noting seven million TNC [Transportation Network Company] rides to and from Boston Logan
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`Airport in 2018), Uber has provided data indicating that “10.1% of all [Uber] trips taken in the
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`United States in 2019 began or ended at an airport,” see Contreras Decl. ¶ 4.

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