throbber
Case 1:21-cv-04995-JMF Document 75 Filed 09/24/21 Page 1 of 24
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`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF NEW YORK
`
`
`MICHELI & SHEL, LLC, individually and on behalf of
`others similarly situated,
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`Plaintiffs,
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`
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`v.
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`GRUBHUB INC., GRUBHUB INC. d/b/a SEAMLESS,
`SEAMLESS NORTH AMERICA, LLC, UBER
`TECHNOLOGIES INC., UBER EATS, POSTMATES
`LLC, and DOORDASH INC.,
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`
`Defendants.
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`
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`Case No.: 21-cv-04995 (JMF)
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`MICHELI & SHEL, LLC’s OMNIBUS MEMORANDUM OF LAW IN OPPOSITION TO
`DEFENDANTS’ MOTION TO COMPEL ARBITRATION AND STAY THIS ACTION
`
`
`
`
`
`
`HELBRAUN LEVEY
`Lee N. Jacobs
`Hamutal G. Lieberman
`Joseph D. Taylor
`40 Fulton Street, Fifth Floor
`New York, New York 10038
`Telephone: (212) 219-1193
`Email: lee@helbraunlevey.com
`Email: Hamutal.liberman@helbraunlevey.com
`Email: joe.taylor@helbraunlevey.com
`
`Attorneys for the Plaintiff
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`

`

`Case 1:21-cv-04995-JMF Document 75 Filed 09/24/21 Page 2 of 24
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`TABLE OF CONTENTS
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`TABLE OF CONTENTS ________________________________________________________ I
`
`TABLE OF AUTHORITIES ____________________________________________________ II
`
`INTRODUCTION _____________________________________________________________ 1
`
`BACKGROUND AND RELEVANT FACTS ________________________________________ 2
`
`ARGUMENT _________________________________________________________________ 4
`
`I. The FAA Does Not Appy to this Dispute and Plaintiff Should Not be Compelled to
`Arbitrate Its Claims. ________________________________________________________ 4
`A. The Arbitration Agreements are Unenforceable. ________________________________ 5
`i.
`The Enforcement of the Arbitration Agreements Would be Unconscionable Because
`Plaintiff Did Not Agree to Arbitrate Illegal Conduct When It Assented to Defendants’
`Service Agreements. ____________________________________________________ 5
`ii. The FAA’s Mandate has Been Overridden by Contrary Legislative Command. ______ 7
`B. The Arbitration Agreement Does Not Cover the Dispute. _________________________ 8
`i.
`The Claims are Unrelated to the Contract Between the Parties. __________________ 9
`ii. The Plaintiff Could Not Have Agreed to Arbitrate Claims Based On a Law That Did
`Not Exist at the Time of Alleged Assent to the Service Agreements. _____________ 11
`iii. Updated Service Agreements Cannot be Used to Compel Arbitration Because the
`Plaintiff Never Assented to Them. ________________________________________ 13
`C. Since the Dispute Falls Outside the Scope of the Arbitration Agreement the Issue of
`Arbitrability Should be Decided by the Court. _________________________________ 15
`
`II. The Class Action Waivers Do Not Apply to Plaintiff’s Dispute and in Any Event, the
`Enforceability of the Class Action Waivers Must be Resolved by the Court. ___________ 15
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`III. Public Policy Requires That the Parties Litigate This Dispute in Open Court. __________ 17
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`IV. This Action Should Not be Stayed. ___________________________________________ 19
`
`CONCLUSION ______________________________________________________________ 20
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`i
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`Case 1:21-cv-04995-JMF Document 75 Filed 09/24/21 Page 3 of 24
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`TABLE OF AUTHORITIES
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`
`
`
`
` Page(s)
`
`
`Cases
`
`BCB Holdings Ltd. v. Gov’t of Belize,
`110 F. Supp. 3d 233 (D.D.C. 2015) .......................................................................................... 18
`
`
`Benicorp Ins. Co. v. Nat’l Med. Health Card Sys., Inc.,
`447 F. Supp. 2d 329 (S.D.N.Y. 2006) ....................................................................................... 13
`
`
`Berkson v. Gogo LLC,
`97 F. Supp. 3d 359 (E.D.N.Y. 2015) ......................................................................................... 14
`
`
`Cap Gemini Ernst & Young, U.S., L.L.C. v. Nackel,
`346 F.3d 360 (2d Cir. 2003) ...................................................................................................... 12
`
`
`Express Indus. & Terminal Corp. v. New York State Dep’t of Transp.,
`93 N.Y.2d 584, 715 N.E.2d 1050 (1999) .................................................................................. 13
`
`
`Gillman v. Chase Manhattan Bank, N.A.,
`73 N.Y.2d 1, 534 N.E.2d 824 (1988) ...................................................................................... 5, 6
`
`
`Hall St. Assocs., L.L.C. v. Mattel, Inc.,
`552 U.S. 576, 128 S. Ct. 1396, 170 L. Ed. 2d 254 (2008) ........................................................ 17
`
`
`Howsam v. Dean Witter Reynolds, Inc.,
`537 U.S. 79, 123 S. Ct. 588, 154 L. Ed. 2d 491 (2002) .............................................................. 5
`
`
`In re Am. Exp. Fin. Advisors Sec. Litig.,
`672 F.3d 113 (2d Cir. 2011) ........................................................................................................ 5
`
`
`In re Winimo Realty Corp.,
`276 B.R. 334 (S.D.N.Y. 2001) .................................................................................................... 9
`
`
`JLM Indus., Inc. v. Stolt-Nielsen SA,
`387 F.3d 163 (2d Cir. 2004) ........................................................................................................ 8
`
`
`McFarlane v. Altice USA, Inc.,
`2021 WL 860584 (S.D.N.Y. Mar. 8, 2021) ....................................................................... Passim
`
`
`Meyer v. Uber Techs., Inc.,
`868 F.3d 66 (2d Cir. 2017) ........................................................................................................ 13
`
`
`Necchi S.p.A. v. Necchi Sewing Mach. Sales Corp.,
`348 F.2d 693 (2d Cir. 1965) ................................................................................................ 10, 11
`
`
`
`ii
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`

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`Case 1:21-cv-04995-JMF Document 75 Filed 09/24/21 Page 4 of 24
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`
`Plazza v. Airbnb, Inc.,
`289 F. Supp. 3d 537 (S.D.N.Y. 2018) ......................................................................................... 5
`
`
`Prima Paint Corp. v. Flood & Conklin Mfg. Co.,
`388 U.S. 395, 87 S. Ct. 1801, 18 L. Ed. 2d 1270 (1967) .................................................... 10, 12
`
`
`Schnabel v. Trilegiant Corp.,
`697 F.3d 110 (2d Cir. 2012) ...................................................................................................... 14
`
`
`Shearson/Am. Exp., Inc. v. McMahon,
`482 U.S. 220, 107 S. Ct. 2332, 96 L. Ed. 2d 185 (1987) ............................................................ 8
`
`
`Sprinzen v. Nomberg,
`46 N.Y.2d 623, 389 N.E.2d 456 (1979) .............................................................................. 18, 19
`
`
`Titan Tire Corp. of Freeport v. United Steel, Paper & Forestry, Rubber, Mfg., Energy, Allied
`Indus. & Serv. Workers Int’l Union,
`734 F.3d 708 (7th Cir. 2013) ..................................................................................................... 19
`
`
`Transit Mix Concrete Corp. v. Loc. Union No. 282, Int’l Bhd. of Teamsters, Chauffeurs,
`Warehousemen & Helpers of Am.,
`809 F.2d 963 (2d Cir. 1987) ...................................................................................................... 12
`
`
`United Bhd. of Carpenters & Joiners of Am., AFL-CIO v. Operative Plasterers’ & Cement
`Masons’ Int’l Ass’n of U.S. & Canada, AFL-CIO,
`721 F.3d 678 (D.C. Cir. 2013) .................................................................................................. 18
`
`
`Vera v. Saks & Co.,
`335 F.3d 109 (2d Cir. 2003) ...................................................................................................... 12
`
`
`Volt Info. Scis., Inc. v. Bd. of Trustees of Leland Stanford Junior Univ.,
`489 U.S. 468, 109 S. Ct. 1248, 103 L. Ed. 2d 488 (1989) .......................................................... 4
`
`
`W.R. Grace & Co. v. Loc. Union 759, Int’l Union of United Rubber, Cork, Linoleum & Plastic
`Workers of Am.,
`461 U.S. 757, 103 S. Ct. 2177, 76 L. Ed. 2d 298 (1983) .......................................................... 17
`
`
`Statutes
`
` 9
`
` U.S.C.A. § 2 ................................................................................................................................. 6
`
`
`Other Authorities
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`New York City, N.Y., Code § 20-848 ............................................................................................ 8
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`
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`iii
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`Case 1:21-cv-04995-JMF Document 75 Filed 09/24/21 Page 5 of 24
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`Plaintiff Micheli & Shel, LLC (“Plaintiff” or “Micheali’s Bakery”) respectfully submits
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`this memorandum of law in opposition to Defendants Grubhub Inc., Grubhub Inc. d/b/a Seamless,
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`Seamless North America, LLC (collectively with Grubhub Inc. and Grubhub Inc. d/b/a Seamless,
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`“GrubHub”)1, Uber Technologies, Inc., Uber Eats (collectively with Uber Technologies, Inc.,
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`“Uber”), Postmates, LLC (“Postmates”) 2, and DoorDash, Inc.’s (“DoorDash”) motions seeking
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`an Order (i) compelling arbitration of the claims asserted by Plaintiff; (ii) staying the action
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`pending the outcome of any arbitration; and (iii) granting such other and further relief as the Court
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`deems just and proper (collectively, “the Motions”).
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`
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`INTRODUCTION
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`On June 7, 2021, Plaintiff Micheli & Shel, LLC (“Michaeli’s Bakery”), an Israeli-style
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`bakery located in Manhattan’s Lower East Side neighborhood, filed suit on its behalf and on behalf
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`of all others similarly situated, against Defendants, the major third-party food delivery platforms
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`in New York City for their violations of New York City’s legislation capping delivery fees during
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`the COVID-19 pandemic. Defendants seek to compel Michaeli’s Bakery to arbitrate its claims
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`against them on an individual basis claiming that the Federal Arbitration Act (“FAA”) applies to
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`the dispute and that the Plaintiff agreed to arbitrate any and all disputes through private arbitration.
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`However, as will be discussed, the FAA does not apply to this dispute and as such, Plaintiff should
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`not be compelled to arbitrate its claims.
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`First, it would be unconscionable to enforce the arbitration agreements because, when
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`Plaintiff contracted with Defendants for their delivery services, it certainly did not agree to
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`arbitrate disputes stemming from Defendants’ illegal conduct. Second, the FAA’s mandate has
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`Defendants Grubhub Inc., GrubHub d/b/a Seamless, and Seamless North America, LLC merged into one
`1
`entity, Grubhub Inc. See Doc. No. 39.
`2
`In or around July 2020, Defendant Uber Technologies, Inc. acquired Defendant Postmates, LLC.
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`1
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`Case 1:21-cv-04995-JMF Document 75 Filed 09/24/21 Page 6 of 24
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`been overridden by contrary legislative command in the text of the operative legislation which
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`prevents the enforcement of the arbitration agreements. Third, the dispute at issue does not come
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`within the scope of the arbitration agreements because the claims lack a nexus to the service
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`agreements entered into by the parties. Moreover, Plaintiff could not have possibly agreed to
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`arbitrate claims alleging violation of a law that did not exist at the time it executed the service
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`agreement with Defendants.
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`Given that the dispute falls outside of the scope of the arbitration agreements, it follows
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`that the issue of arbitrability must be decided by this Court rather than an arbitrator. In addition,
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`the class action waivers do not apply to this dispute and the terms of the parties’ contracts require
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`this Court to determine their enforceability. Last, public policy requires that the parties litigate
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`this dispute in open court given the (i) the dispute’s scope and breadth; (ii) the continued changing
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`legal landscape; and (iii) Defendants’ attempt to have their cake (delivered) and eat it, too.3
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`For all of these reasons, Plaintiff respectfully requests that Defendants’ Motions be denied
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`in their entirety and this action proceed to litigation.
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`BACKGROUND AND RELEVANT FACTS
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`On March 7, 2020, Governor Cuomo issued Executive Order Number 202 declaring a state
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`of emergency for the entire State of New York.4 Complaint (“Compl.”), ¶ 27. On March 16, 2020,
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`Governor Cuomo issued Executive Order Number 202.3 prohibiting restaurants and bars from
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`serving food or beverages on-premises due to the spread of COVID-19.5 Compl., ¶ 28. On March
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`22, 2020, Governor Cuomo’s executive order “New York State on PAUSE” required all non-
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`See Doordash Inc., et al. v. City of New York, Case No.: 1:21-cv-07564 (S.D.N.Y, September 9, 2021).
`3
`See https://www.governor.ny.gov/news/no-202-declaring-disaster-emergency-state-new-york (last accessed
`4
`on May 9, 2021).
`5
`See https://www.governor.ny.gov/news/no-2023-continuing-temporary-suspension-and-modification-laws-
`relating-disaster-emergency (last accessed on May 9, 2021).
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`2
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`Case 1:21-cv-04995-JMF Document 75 Filed 09/24/21 Page 7 of 24
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`essential businesses to close in-office personnel functions to help stop the infection rate of the
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`COVID-19 virus.6 Compl., ¶ 29. On May 13, 2020, the New York City Council, in an effort to
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`curb the already powerful influence of third-party delivery companies, passed emergency
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`legislation placing a cap on the delivery fees that third-party delivery companies such as
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`Defendants could charge restaurants for their services. Compl., ¶ 32.
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`
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`Effective June 2, 2020, Local Law No. 52 of 2020, Council Int. No. 1908-B of 2020 (the
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`“Delivery Fee Caps Law”) placed a twenty percent (20%) cap on all fees that Defendants could
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`charge their customers with a specific cap of fifteen percent (15%) on all fees charged for delivery
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`and a five percent (5%) cap for any additional fees including for marketing, credit card processing
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`or any other fees. Compl., ¶ 6. The Delivery Law was amended pursuant to Local Law No. 88 of
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`2020, Council Int. No. 2054-A of 2020 (the “Amended Delivery Fee Caps Law” and together with
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`the “Delivery Fee Caps Law”, the “Delivery Fee Caps Laws”), effective September 14, 2020, to
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`allow for “pass-through” costs, such as credit card fees, to be charged to the restaurant above the
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`fifteen percent (15%) and five percent (5%) fee caps. Despite the passing of the Delivery Fee Caps
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`Laws, Defendants continued to charge Plaintiff (and the class members) in excess of the fifteen
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`percent (15%) delivery fee cap and five (5%) cap on all additional fees. Compl., ¶ 9.
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`
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`Defendants restructured their fees to appear to comply with the laws, but in actuality
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`continued to charge Plaintiff and the class members above the permitted fee caps. Compl., ¶ 11.
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`In some cases, for example, Defendants charged a flat twenty percent (20%) service fee without
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`clearly identifying what the fee was for. Compl., ¶ 11. This ambiguity violates both the delivery
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`fee and additional fee cap as neither fee may be twenty percent (20%) in the aggregate according
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`to the law. Compl., ¶ 11. Some Defendants disingenuously appeared to comply with the cap by
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`
`https://www.governor.ny.gov/news/governor-cuomo-issues-guidance-essential-services-under-new-
`See
`6
`york-state-pause-executive-order (last accessed on September 24, 2021).
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`3
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`Case 1:21-cv-04995-JMF Document 75 Filed 09/24/21 Page 8 of 24
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`keeping their delivery fee under the fifteen percent (15%) fee cap, charging thirteen percent (13%)
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`or fourteen and half percent (14.5%), but then overcharging with respect to the category of “other”
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`non-delivery fees. Compl., ¶ 12. These other fees were charged for several categories of fees each
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`individually under the five percent (5%) threshold, but cumulatively added up to well over the five
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`percent (5%) threshold. Compl., ¶ 12.
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`On June 7, 2021, Plaintiff Micheali’s Bakery, filed suit on behalf of itself and on behalf of
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`all others similarly situated against Defendants. Defendants represent the major third-party food
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`delivery platforms in New York City.7 This Class Action seeks to hold Defendants accountable
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`for their predatory behavior on the businesses most impacted by the COVID 19 Pandemic. The
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`Motions to compel arbitration followed.
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`ARGUMENT
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`The FAA Does Not Appy to this Dispute and Plaintiff Should Not be Compelled
`to Arbitrate Its Claims.
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`The Supreme Court has repeatedly made clear that the FAA was designed “to make
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`I.
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`
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`arbitration agreements as enforceable as other contracts, but not more so.” McFarlane v. Altice
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`USA, Inc., No. 20-CV-1297 (JMF), 2021 WL 860584, at *5 (S.D.N.Y. Mar. 8, 2021) (J. Furman)
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`(quoting Volt Info. Scis., Inc. v. Bd. of Trustees of Leland Stanford Junior Univ., 489 U.S. 468,
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`478, 109 S. Ct. 1248, 103 L. Ed. 2d 488 (1989)) (emphasis added) (internal citation omitted).
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`Accordingly, “the FAA does not require parties to arbitrate when they have not agreed to do so.”
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`Id.
`
`
`See “Minutes of the Proceedings for the Stated Meeting of Wednesday, May 13, 2020,” The New York
`7
`City Council, May 13, 2020, New York accessible at
`https://www1.nyc.gov/assets/dcas/downloads/pdf/cityrecord/stated_meeting_2020_05_13.pdf (last accessed
`September 24, 2021).
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`4
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`Case 1:21-cv-04995-JMF Document 75 Filed 09/24/21 Page 9 of 24
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`When evaluating whether the FAA requires a court to compel arbitration, courts must
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`consider two gateway issues: “(1) whether the parties have entered into a valid agreement to
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`arbitrate, and if so, (2) whether the dispute at issue comes within the scope of the arbitration
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`agreement.” Plazza v. Airbnb, Inc., 289 F. Supp. 3d 537, 547 (S.D.N.Y. 2018). Only if both
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`conditions are met, must the Court send the case to arbitration. Id. If either is missing, as is here,
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`the nonmoving party cannot be forced to arbitrate the dispute. In re Am. Exp. Fin. Advisors Sec.
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`Litig., 672 F.3d 113, 127 (2d Cir. 2011) (“[A] party cannot be required to submit to arbitration any
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`dispute which he has not agreed so to submit.”) (quoting Howsam v. Dean Witter Reynolds, Inc.,
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`537 U.S. 79, 83, 123 S. Ct. 588, 154 L. Ed. 2d 491 (2002)). As will be discussed, neither gateway
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`factors are satisfied and accordingly, the Court must deny the Motions in their entirety.
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`
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`
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`A. The Arbitration Agreements are Unenforceable.
`
`i. The Enforcement of the Arbitration Agreements Would be Unconscionable
`Because Plaintiff Did Not Agree to Arbitrate Illegal Conduct When It
`Assented to Defendants’ Service Agreements.
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`In some circumstances, such as here, it would be unconscionable to enforce arbitration
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`provisions with respect to claims that are completely unrelated to the contracts (here, service
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`agreements) entered between the parties. “Under New York law, an unconscionable contract has
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`been defined as one which is so grossly unreasonable or unconscionable in the light of the mores
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`and business practices of the time and place as to be unenforceable according to its literal terms.”
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`McFarlane, 2021 WL 860584, at *8 (S.D.N.Y. Mar. 8, 2021) (quoting Gillman v. Chase
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`Manhattan Bank, N.A., 73 N.Y.2d 1, 534 N.E.2d 824 (1988)) (internal quotations omitted).
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`Moreover, New York law provides that “a contract should not be interpreted to produce a result
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`that is absurd, commercially unreasonable or contrary to the reasonable expectations of the
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`parties.” Id. “Where some absurdity has been identified or the contract would otherwise be
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`5
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`Case 1:21-cv-04995-JMF Document 75 Filed 09/24/21 Page 10 of 24
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`unenforceable either in whole or in part, courts may as a matter of interpretation carry out the
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`intention of the contract by transposing, rejecting, or supplying words to make the meaning of the
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`contract more clear.” Id.
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`McFarlane is particularly instructive, as this Court was asked to determine whether an
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`arbitration clause buried in a cable service agreement required plaintiffs to arbitrate claims arising
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`out of their employment and not their cable service despite an “extremely broad” arbitration clause
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`requiring arbitration of “any and all disputes arising between the customer and Atlice.” Id. at *6.
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`There, this Court held that “it would be unconscionable to enforce the Arbitration Provision with
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`respect to claims untethered to the Altice cable service agreement.” Id. at *8. This very same Court
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`went on to state that such arbitration agreement was “arguably not even subject to the FAA . . .
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`because the [FAA] applies only to a written provision in any . . . contract evidencing a transaction
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`involving commerce to settle by arbitration a controversy thereafter arising out of such a contract
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`or transaction.” Id.; see also 9 U.S.C.A. § 2 (emphasis added). Finally this Court concludes,
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`“[n]otwithstanding the literal meaning of the [arbitration] clause’s language, no reasonable person
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`would think that agreeing to Altice’s Terms and Conditions would obligate them to arbitrate
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`literally every possible dispute he or she might have with the service provider . . . rather, a
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`reasonable person would be expressing, at most, an intent to agree to arbitrate disputes connected
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`in some way to the service agreement with Altice.” Id. at *8 (emphasis added).
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`Here, Defendants seek to enforce equally broad arbitration agreements and allege that
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`Plaintiff’s claims relating to Defendants’ violation of the Delivery Fee Caps Laws must be
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`arbitrated pursuant to the arbitration clause contained in the parties’ service agreement for food
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`delivery services. For instance, the Uber Terms arbitration clause encompasses “[a]ny dispute,
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`whether contractual or otherwise, arising out of or in connection with the Agreement.” See Uber
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`6
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`Case 1:21-cv-04995-JMF Document 75 Filed 09/24/21 Page 11 of 24
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`Terms, Section 17.1, Doc. No.: 66-1 (emphasis added). Whereas, the Updated Postmates Terms,
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`if applicable (as discussed below), contain an arbitration clause that is equally broad,
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`encompassing “any and all disputes” between the parties.” See Postmates Updated Terms, at 8,
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`Doc. No.: 65-3 (emphasis added). DoorDash’s agreement requires arbitration of, “[a]ny dispute,
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`controversy or claim arising out of, relating to or in connection with [its] contract.” See DoorDash
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`Terms, Section 19(a), Doc. No.: 59 (emphasis added). Finally, GrubHub’s terms is no different
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`from the others and requires arbitration extending to “all claims or disputes arising out of this
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`Agreement.” See GrubHub Terms, Section 5, Doc. No.: 53-2 (emphasis added).8
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`Applying the same principals here, as it did in McFarlane, this Court must reach the
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`conclusion that notwithstanding the language in the various arbitration clauses, no reasonable
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`person would think that agreeing to Defendants’ Service Agreements would obligate them to
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`arbitrate every possible dispute they might have with the Defendants including Defendants’
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`violations of the law, or as is here, the Delivery Fee Cap Laws. Instead, it is reasonable that a
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`person would at most, express intent to agree to arbitrate disputes connected in some way to the
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`service agreement. To reach any other conclusion would result in an interpretation producing “a
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`result that is absurd, commercially unreasonable or contrary to the reasonable expectations of the
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`parties.” McFarlane, 2021 WL 860584, at *8.
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`ii. The FAA’s Mandate has Been Overridden by Contrary Legislative
`Command.
`
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`If this Court determines that the FAA applies to this dispute, which Plaintiff disagrees, the
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`FAA’s mandate has nevertheless been overridden by contrary legislative command in the Delivery
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`Fee Caps Laws statutory text rendering the arbitration agreements unenforceable. While
`
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`For brevity purposes, when referring to all of the Defendants’ agreements with the Plaintiff, the
`8
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`collective term, “Service Agreements” will be utilized.
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`7
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`Case 1:21-cv-04995-JMF Document 75 Filed 09/24/21 Page 12 of 24
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`Defendants cite authorities emphasizing a strong policy favoring arbitration, arbitration may not
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`be compelled where the FAA’s mandate is “overridden by a contrary congressional command.”
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`Shearson/Am. Exp., Inc. v. McMahon, 482 U.S. 220, 226, 107 S. Ct. 2332, 96 L. Ed. 2d 185 (1987).
`
`“If Congress did intend to limit or prohibit waiver of a judicial forum for a particular claim, such
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`an intent will be deducible from the statute’s text or legislative history, or from an inherent conflict
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`between arbitration and the statute’s underlying purposes.” Id. at 227 (internal citations omitted).
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`A review of the text of the Delivery Fee Caps Laws reveals a contrary legislative command
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`requiring this Court to reject the arbitration clause. Specifically, the Penalties and Enforcement, of
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`the Delivery Fee Caps Laws states:
`
`A proceeding to recover any civil penalty authorized to the
`subchapter may be brought in any tribunal established within the
`office of administrative trials and hearings or within any agency of
`the city designated to conduct such proceedings.
`
`
`New York City, N.Y., Code § 20-848. Such language clearly and unmistakably communicates a
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`legislative intent to limit or prohibit waiver of a judicial forum for such a claim overriding the
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`FAA’s mandate to require the Plaintiff to arbitrate its claims.
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`
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`B. The Arbitration Agreement Does Not Cover the Dispute.
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`Plaintiff cannot be forced to arbitrate the claims set forth in its Complaint. The claims are
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`not within the ambit of the arbitration clause contained in the parties’ service agreements, and
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`therefore, Defendants cannot force Plaintiff to arbitrate claims that it clearly did not agree to
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`arbitrate. See JLM Indus., Inc. v. Stolt-Nielsen SA, 387 F.3d 163, 171 (2d Cir. 2004) (“[A]rbitration
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`is a matter of consent, not coercion.”) (internal citations and quotations omitted). As set forth
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`below, it is patently clear that Plaintiff did not, and could not, agree to arbitrate the claims set forth
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`in its Complaint and this Court should deny Defendants’ Motions.
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`8
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`Case 1:21-cv-04995-JMF Document 75 Filed 09/24/21 Page 13 of 24
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`First, the claims in the Complaint are wholly unrelated to the parties’ Service Agreements.
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`Indeed, these claims do not invoke any issues of contract construction or the parties’ rights
`
`pursuant to the Service Agreements. Cf., In re Winimo Realty Corp., 276 B.R. 334, 338 (S.D.N.Y.
`
`2001) (“[E]ven if the disputed issue is collateral (to the contract) it will only be arbitrated if it
`
`implicate[s] issues of contract construction or the parties’ rights and obligations under the
`
`[contract].”) (internal citations and quotations omitted).
`
`To be clear, Plaintiff does not allege that Defendants violated the applicable Service
`
`Agreements; rather, Plaintiff seeks to hold Defendants liable for their clear violations of the
`
`Delivery Fee Caps Laws. Second, Plaintiff could not have agreed to arbitrate the claims at issue
`
`here when the Service Agreements were executed, because the Delivery Fee Caps Laws did not
`
`come into effect until September 14, 2020, after Plaintiff had already executed the Service
`
`Agreements.9 Additionally, to the extent Defendants allege that subsequent or updated Terms of
`
`Use/Terms of Service may apply, in each and every case the alleged updated terms were sent via
`
`email and did not require any physical manifestation of assent to bind the Plaintiff. Thus,
`
`Defendants cannot prove that Plaintiff had notice of these updated terms and therefore cannot force
`
`Plaintiff to arbitrate its claims pursuant to these updated Terms of Use/Service.
`
`
`
`i. The Claims are Unrelated to the Contract Between the Parties.
`
`Plaintiff’s allegations rest upon Defendants’ violation of the Delivery Fee Caps Laws and
`
`seek damages stemming from Defendants’ charging Plaintiff in excess of what is allowed under
`
`the Delivery Fee Caps Laws. Thus, this dispute does not require any reference to the parties’
`
`Service Agreements, as Plaintiff does not allege claims that Defendants violated the Service
`
`Agreements. Moreover, the fact that Defendants’ violation of the Delivery Fee Caps Laws would
`
`
`Further, as to Postmates, its applicable service agreement does not contain an arbitration clause and thus
`9
`Postmates cannot compel arbitration. See, Lopez Dec. at ¶6, Exhibit A (Doc. No 65-1).
`
`
`
`9
`
`

`

`Case 1:21-cv-04995-JMF Document 75 Filed 09/24/21 Page 14 of 24
`
`not have occurred without the existence of the parties’ Service Agreements is insufficient to
`
`compel Plaintiff to arbitrate these claims. See, Necchi S.p.A. v. Necchi Sewing Mach. Sales Corp.,
`
`348 F.2d 693, 698 (2d Cir. 1965) (“It is undoubtedly true that many of the matters . . . would not
`
`have arisen if the exclusive distributorship arrangement had never existed between the [parties].
`
`But this is not sufficient to render them arbitrable within the specific meaning of the arbitration
`
`clause . . . which requires that the matter arise out of or in connection with that agreement(sic)
`
`rather than the working relationship between the parties.”) (emphasis added).
`
`As the Second Circuit made clear in Necchi, the mere fact that the dispute would only occur
`
`because of a contractual relationship between the parties does not require arbitration of any and all
`
`claims that parties to a contract may have against each other. Indeed, despite the FAA’s
`
`presumption in favor of arbitration, the legislative purpose behind enacting the FAA was to “make
`
`arbitration agreements as enforceable as other contracts, but not more so”. Prima Paint Corp. v.
`
`Flood & Conklin Mfg. Co., 388 U.S. 395, 404, 87 S. Ct. 1801, 18 L. Ed. 2d 1270 (1967); see also
`
`McFarlane, 2021 WL 860584, at *5. Compelling Plaintiff to arbitrate claims that clearly fall
`
`outside the scope of the respective Service Agreements would be akin to making the arbitration
`
`clause contained in these agreements more enforceable than other contracts and is thus
`
`impermissible. Id.
`
`To be clear, all three of the applicable arbitration clauses (with the exception of Postmates,
`
`which does not contain one) require arbitration of matters premised on violation of the respective
`
`Service Agreements. Moreover, the arbitration clauses contained in both GrubHub’s and Uber’s
`
`Service Agreements are no more broad than the arbitration clause referred to in Necchi and
`
`therefore Plaintiff’s claims are clearly outside the purview of the Service Agreements’ arbitration
`
`clauses. See Necchi S.p.A., 348 F.2d at 698. Similarly, the arbitration clause contained in
`
`
`
`10
`
`

`

`Case 1:21-cv-04995-JMF Document 75 Filed 09/24/21 Page 15 of 24
`
`DoorDash’s Service Agreement is also inapplicable to Plaintiff’s claims as it requires arbitration
`
`of claims, arising out of, relating to, or in connection with the Service Agreement. Plaintiff’s
`
`claims simply have no connection to the Service Agreements and Defendant DoorDash cannot
`
`base its demand to arbitrate on the mere fact that Plaintiff entered into a contract that does not
`
`apply to this dispute. Id. The salient, distinguishing fact that precludes arbitration of Plaintiff’s
`
`claims is that the Service Agreements are not operative to the dispute at issue and thus fall outside
`
`the scope of all of the arbitration clauses contained in the Service Agreements. Indeed, Plaintiff
`
`does not allege that the Defendants have violated the terms of their respective Service Agreements,
`
`or that Defendants’ conduct is governed by the terms of the Service Agreements. Therefore,
`
`Plaintiff’s claims do not fall within the scope of the arbitration clauses contained in the Service
`
`Agreements. Id. at 697 (refusing to compel arbitration for certain claims regarding practices that
`
`were not volitive of the contract containing the arbitration clause, or where the conduct at issue
`
`was not governed by the contract).
`
`ii. The Plaintiff Could Not Have Agreed to Arbitrate Claims Based On a Law
`That Did Not Exist at the Time of Alleged Assent to the Service
`Agreements.
`
`Additionally, it is impermissible to compel Plaintiff to arbitrate its claims when they were
`
`
`
`not even in existence at the time it entered into the Service Agreement with each Defendant.
`
`Notably, Plaintiff entered into the Service Agreements before the Delivery Fee Cap Laws came
`
`into existence.
`
`The Postmates service agreement, which does not include a mandatory arbitration
`
`agreement, was executed on May 12, 2020, and is the only one which Plaintiff physically
`
`manifested an assent to be bound. See Lopez Dec., Exhibit A (Doc. No.: 65-1). Whereas, while
`
`the Uber, GrubHub, and DoorDash Service Agreements contain an arbitration clause, the parties’
`
`
`
`11
`
`

`

`Case 1:21-cv-04995-JMF Document 75 Filed 09/24/21 Page 16 of 24
`
`mutual understanding of the sc

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