O'Connor et al v. Uber Technologies, Inc. et al

Filing 136

ORDER by Judge Edward M. Chen Granting 116 Defendant's Motion for Judgment on the Pleadings. (emcsec, COURT STAFF) (Filed on 9/4/2014)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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DOUGLAS O’CONNOR, et al.,

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Plaintiffs,
v.

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For the Northern District of California

United States District Court

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No. C-13-3826 EMC

UBER TECHNOLOGIES, INC., et al.,

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ORDER GRANTING DEFENDANT’S
MOTION FOR JUDGMENT ON THE
PLEADINGS

Defendants.
___________________________________/

(Docket No. 116)
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Plaintiffs Douglas O’Connor ,Thomas Colopy, David Khan, Matthew Manahan, Wilson

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Rolle, Jr., and William Anderson (“Plaintiffs”) seek to represent a nationwide class of drivers who

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provide passenger car service for customers who hail them through Defendant Uber Technologies,

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Inc.’s mobile phone application. They allege that Uber discourages passengers from tipping by

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falsely advertising that gratuity is included in the fare, even though the full gratuity is not passed

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along to the drivers. Plaintiffs allege various California statutory and common law causes of action

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against Uber, specifically breach of implied-in-fact contract, unfair business practices, and

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interference with prospective economic advantage. This Court has previously granted-in-part and

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denied-in-part Uber’s motion to dismiss, and afforded Plaintiffs leave to amend. An amended

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complaint was filed, and Uber has moved for judgment on the pleading as to most of the claims in

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the first amended complaint.

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Having considered the parties’ briefs and accompanying submissions, as well as the oral
argument of counsel, the Court hereby GRANTS Uber’s motion.

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I.

FACTUAL BACKGROUND

The following allegations are contained in Plaintiffs’ first amended complaint. Plaintiffs are

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drivers from California, Georgia, and Washington who have participated in the Uber service who

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bring this action on behalf of a putative class of “Uber drivers anywhere in the United States (other

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than Massachusetts).” First Amended Complaint (“FAC”) ¶¶ 1, 4-9. Uber provides a service that

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gives consumers the ability to hail a participating car service driver “on demand” using their mobile

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phone. Id. ¶¶ 14-15. Plaintiffs allege that Uber advertises on its website (and in its marketing

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materials) that a gratuity is included in the total cost of the car service and that the customer does not

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need to provide a tip to the driver. Id. ¶ 16. Sometimes, Uber has advertised the gratuity is a set
amount (such as 20%) of the fair charged, while in other instances, the amount of the gratuity is not

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For the Northern District of California

United States District Court

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specified. Id. ¶¶ 19-20.1 Notwithstanding these representations, Plaintiffs allege that Uber does not

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provide its drivers with the total proceeds of the gratuity, but rather retains a portion of it for itself.

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Id. ¶¶ 17-18. This failure to provide the full amount of the gratuity, Plaintiffs allege, violates

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various California statutes and common law principles. Id. ¶¶ 22-23.

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Uber drivers, including Plaintiffs, operate under a Licensing Agreement with Uber.2 Docket

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No. 39-2. The Licensing Agreement contains a “Governing Law and Jurisdiction” section which

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provides, in relevant part:

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This Agreement shall be governed by California law, without regard to
the choice of conflicts of law provisions of any jurisdiction, and any
disputes, actions, claims or causes of action arising out of or in
connection with the Agreement of the Uber Service or Software shall
be subject to the exclusive jurisdiction of the state and federal courts
located in the City and County of San Francisco, California.

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Id. at 11. Substantively, the Licensing Agreement refers to the drivers as “independent contractors”

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and not employees. See id. a 7-8. The Licensing Agreement generally describes how the fares and

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For these latter instances, Plaintiffs allege that it is “customary in the car service industry
for customers to leave approximately a 20% gratuity for drivers” and, as a result, where the amount
of gratuity was not specified by Uber, a reasonable customer would have assumed the gratuity was
“in the range of 20% of the total fair.” Id. ¶ 21.
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This Court has previously granted Uber’s motion to take judicial notice of the Software
License and Online Services Agreement with Driver Addendum. See O’Connor v. Uber Techs.,
Inc., No. C-13-3826 EMC, 2013 WL 6354534, at *1 n.1 (N.D. Cal. Dec. 5, 2013)

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fees will be calculated and disbursed, and does not contain any reference to gratuities. Id. at 5-6.

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Notwithstanding the “independent contractor” label in the Licensing Agreement, Plaintiffs allege

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they are, in fact, employees as evidenced by the “litany of detailed requirements imposed on them by

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Uber” and the fact they are “graded, and are subject to termination, based on their failure to adhere

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to these requirements.” FAC ¶ 24. Included in these requirements are ones regarding their conduct

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with customers, the cleanliness of their vehicles, the timeliness with which they pick up and deliver

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customers, and what they are permitted to say to customers. Id. Additionally, Plaintiffs allege that

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their services are “fully integrated” into Uber’s business of “providing car service to customers.” Id.

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¶ 25. Accordingly, as employees, Plaintiffs allege that they are entitled to reimbursed for
employment related expenses under California law. Id. ¶¶ 26.

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For the Northern District of California

United States District Court

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Plaintiffs assert five causes of action in their FAC.

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First, Plaintiffs allege in Count 1 that Uber has tortiously interfered with the

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prospective economic relationship between drivers and Uber customers by (1)

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failing to remit all of the collected gratuities to drivers; and (2) informing

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customers that there was no need to tip drivers. Id. ¶ 38.

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Second, Count 2 asserts that Uber had an implied-in-fact contract with its

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customers pursuant to which the customers agreed to pay gratuity for the

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benefit of the drivers and that, by failing to pay the drivers their full gratuity,

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Uber has violated this agreement. Id. ¶ 39.

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The third cause of action is entitled “Statutory Gratuity Violation (Enforced

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Through UCL) and alleges that Uber had failed to remit all gratuities to the

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drivers and therefore violated California Labor Code Section 351, enforceable

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pursuant to “UCL § 17200.” Id. ¶ 40.

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Fourth, in Count 4 Plaintiffs assert that Uber’s misclassification of drivers as

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independent contractors and failure to reimburse them for incurred expenses

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violates California Labor Code Section 2802. Id. ¶ 41.

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Finally, Count 5 alleges unfair competition in violation of California Business
and Professions Code § 17200. Specifically Plaintiffs allege that Uber has

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engaged in “unlawful or fraudulent business acts or practices” by (1)

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committing the tort of breach of tortious interference with prospective

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economic advantage; (2) breaching an implied-in-fact contract between Uber

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and its customers for which the drivers were third-party beneficiaries; and (3)

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violating California Labor Codes Sections 351 and 2802. Id. ¶ 42.

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II.
A.

DISCUSSION

Legal Standard
Under Federal Rule of Civil Procedure 12(c), “[j]udgment on the pleadings is properly

granted when there is no material fact in dispute, and the moving party is entitled to judgment as a
matter of law.” Fleming v. Pickard, 581 F.3d 922, 925 (9th Cir. 2009)). “Rule 12(c) is ‘functionally

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For the Northern District of California

United States District Court

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identical’ to Rule 12(b)(6) and . . . ‘the same standard of review’ applies to motions brought under

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either rule.” Cafasso, U.S. ex rel. v. Gen. Dynamics Cf Sys., Inc., 637 F.3d 1047, 1054 n.4 (9th Cir.

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2001). Accordingly, in considering such a motion a court must take all allegations of material fact

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as true and construe them in the light most favorable to the nonmoving party, although “conclusory

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allegations of law and unwarranted inferences are insufficient to avoid” dismissal. Cousins v.

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Lockyer, 568 F.3d 1063, 1067 (9th Cir. 2009).

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While “a complaint need not contain detailed factual allegations . . . it must plead ‘enough

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facts to state a claim to relief that is plausible on its face.’ “ Id.; see also Lewis v. City & County of

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San Francisco, No. C 11–5273 PJH, 2012 WL 909801, at *1 (N.D. Cal. Mar. 2012) (stating that to

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survive a Rule 12(c) motion, a plaintiff must allege “‘enough facts to state a claim to relief that is

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plausible on its face.’” (citation omitted)). “A claim has facial plausibility when the plaintiff pleads

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factual content that allows the court to draw the reasonable inference that the defendant is liable for

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the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868

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(2009); see also Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556, 127 S.Ct. 1955, 167 L.Ed.2d 929

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(2007). “The plausibility standard is not akin to a ‘probability requirement,’ but it asks for more than

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sheer possibility that a defendant acted unlawfully.” Iqbal, 556 U.S. at 678, 129 S.Ct. 1937.

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In the context of ruling on both a Rule 12(b)(6) and Rule 12(c), motion, the Court is
generally limited to the contents of the complaint. However, in addition, the Court may consider

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“documents referenced extensively in the complaint, documents that form the basis of plaintiff’s

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claims, and matters of judicial notice when determining whether the allegations of the complaint

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state a claim upon which relief can be granted.” Mendelsohn v. Intalco Aluminum Corp., No.

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C06–0190RSL, 2006 WL 1148559, at *1 (W.D.Wash. Apr. 21, 2006); see also United States v.

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Ritchie, 342 F.3d 903, 908–09 (9th Cir.2003).

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B.

Uber’s Motion for Judgment on the Pleadings Is Not an Impermissible Motion for

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Reconsideration

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Plaintiffs argue that the motion for judgment on the pleadings is no more than a disguised

motion to dismiss Plaintiff’s original complaint. Specifically, they contend that Uber’s motion

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For the Northern District of California

motion for reconsideration of this Court’s prior order granting-in-art and denying-in-pat Uber’s

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United States District Court

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either raises identical arguments already rejected by the Court in reviewing the original complaint or

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contains arguments that Uber could have, but did not, raise against the original complaint. Because

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Uber has purportedly failed to meet the standard governing motions for reconsideration (N.D. Civ.

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Local R. 7-9), Plaintiffs urge to deny Uber’s motion on this ground. The Court disagrees.

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Uber’s motion is not one for reconsideration. To be sure, the motion raises arguments that

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Uber clearly could have made against the Plaintiffs’ original complaint. Further, as will be

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discussed below, in places the arguments raised are identical. However, Plaintiffs’ argument ignores

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the fact that they have filed an amended complaint, thus “superced[ing] the original complaint and

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render[ing] it without legal effect.” Lacey v. Maricopa Cnty., 693 F.3d 896, 927 (9th Cir. 2012) (en

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banc). On this basis, a number of courts have permitted defendants to move to challenge the entire

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amended complaint – including those causes of action the court had previously found sufficient. See

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In re Sony Grand Wega KDF-E A10/A20 Series Rear Projection HDTV Television Litig., 758 F.

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Supp. 2d 1077 (S.D. Cal. 2010), (“When Plaintiffs filed the FACC, it superseded their previous

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complaint, and Sony was therefore free to move again for dismissal.”); Turner v. Tierney, No.C12-

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6231 MMC, 2013 WL 2156264 (N.D. Cal. May 17, 2013), (defendant did “not violate[] Civil Local

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Rule 7-9(c), as [defendant’s] motion to dismiss the FAC is not a motion for reconsideration of the

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Court’s prior order, but, rather, a new motion addressing a newly filed complaint”); Bruton v.

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Gerber Products Company, No. 12-cv-02412-LHK, 2014 WL 172111 (N.D. Cal. Jan. 15, 2014),

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(Defendant “is not seeking reconsideration of the Court’s prior Order, but rather is responding to

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[plaintiff’s] new complaint.”).3

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In light of the above, Uber’s motion for judgment on the pleadings is not a motion for

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reconsideration and the Court will neither deny the motion on this ground nor apply the more

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stringent motion for reconsideration standard in evaluating Uber’s arguments.

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C.

Plaintiffs Have Failed to State a Claim for Interference with Prospective Economic

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Advantage

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In its prior order regarding Uber’s motion to dismiss, the Court set forward the essential

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elements for the tort of interference with prospective economic advantage under California law.
Specifically, Plaintiffs must properly allege (1) an economic relationship between the plaintiff and

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For the Northern District of California

United States District Court

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some third party, with the probability of future economic benefit to the plaintiff; (2) defendant’s

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knowledge of the relationship; (3) the defendant’s intentional acts designed to disrupt the

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relationship; (4) actual disruption of the relationship; and (5) economic harm to the plaintiff

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proximately caused by the defendant’s acts. See Reeves v. Hanlon, 95 P.3d 513, 519 n.6 (Cal.

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2004). In addition, Plaintiffs must allege that the defendant “engaged in an independently wrongful

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act in disrupting the relationship.” Id. at 520. An act is “independently wrongful” if it is “‘unlawful,

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that is, if it is proscribed by some constitutional, statutory, regulatory, common law, or other

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determinable legal standard.’” Id. (quoting Korea Supply Co. v. Lockheed Martin Corp., 63 P.3d

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937, 954 (Cal. 2003)).

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Uber challenges Plaintiffs’ tortious interference claim on a number of bases. First, they

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allege that Plaintiffs have failed to allege an “independently wrongful act.” Second, they assert that

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there was no existing economic relationship with which Uber could have interfered. Finally, Uber

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contends that because it was not a “stranger” to the relationship between Plaintiffs and Uber

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customers, it could not, as a matter of law, have tortiously interfered. For the following reasons, the

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Of course, as Judge Koh recognized in Bruton, to the extent a defendant simply chooses to
rehash arguments the court had previously rejected, it is likely they will “fare little better” than they
did when originally raised. Id. In light of this, it will be a rare case where it will be an efficient use
of an attorneys’ time – not to mention his client’s money – to raise identical arguments already
rejected.

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Court finds that Plaintiffs have failed to allege interference with an existing economic relationship.

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Accordingly, the Court need not reach Uber’s other arguments.

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In its prior order, the Court rejected Uber’s argument that Plaintiffs had failed to state a

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tortious interference claim due to their failure to allege interference with an “existing relationship.”

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The Court concluded that the single case upon which Uber relied – Pardi v. Kaiser Foundation

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Hospitals, 389 F.3d 840 (9th Cir. 2004) – did “not stand for the proposition that an economic

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relationship must exist at the time of the interference.” O’Connor, 2013 WL 6354534, at *15. In

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response to the Court’s order, Uber has now, in connection with the instant motion, cited a number

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of additional California cases.
These newly cited cases, unlike Pardi, do expressly note that the “relationship” that forms

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For the Northern District of California

United States District Court

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the basis of the intentional interference tort must have existed at the time of the allegedly tortious

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conduct. In Roth v. Rhodes, 25 Cal. App. 4th 530 (1994), the California Court of Appeal noted that

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while the relationship in question “need not be a contractual relationship, an existing relationship is

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required.” Id. at 546; see also Halton Co. v. Streivor, Inc., No. C10-0655 WHA, 2010 WL 2077203,

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at *5 (N.D. Cal. May 21, 2010) (“[I]t is well settled in California that a plaintiff must establish an

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existing economic relationship or a protected expectancy with a third person, not merely a hope of

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future transactions. Such an existing relationship must be pleaded to state a claim for intentional

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interference with prospective economic advantage.” (citation omitted)). Thus, in Silicon Labs

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Integration, Inc. v. Melman, No. C08-04030-RMW, 2010 WL 890140 (N.D. Cal. Mar. 8, 2010), the

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court noted that this requirement “precludes application of the [tort] to hypothetical relationships not

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developed at the time of the allegedly tortious acts” and, as a result, plaintiffs must prove that they

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“had a relationship with and expected to receive an economic benefit from a specific third party.”

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Id. at *2; see also Rheumatology Diagnostics Lab., Inc. v. Aetna, Inc., No. 12-cv-05847-WHO, 2013

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WL 5694452 (N.D. Cal. Oct. 18, 2013) (“Alleged relationships with ‘potential customers’ are

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insufficient because they are nothing more than speculative economic relationships.”).

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In the primary case relied upon by Uber, Westside Center Associates v. Safeway Stores 23,

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Inc., 42 Cal. App. 4th 507 (1996), plaintiff owned an interest in several small stores in a local

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neighborhood shopping center. The shopping center’s anchor building was leased by Safeway for a

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supermarket, removed all fixtures, and disclaimed any intent to reopen. Nonetheless, it chose to

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exercise its option to renew its lease for five years. Id. at 510. Closure of the store resulted in a

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substantial decrease in business at the shopping center and, eventually, plaintiff sold its interest in

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the center at a substantial loss. Id. Plaintiff alleged Safeway took its actions as part of a conspiracy

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to drive down the value of the shopping center, permitting it to purchase the property on

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advantageous terms. Plaintiffs further alleged that Safeway’s activities “interfered in its relationship

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with the class of all potential buyers for its property” and therefore interfered with plaintiff’s

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opportunity to sell the property for its “true value.” Id. at 523. The California Court of Appeal

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rejected this argument. It noted that the “interference tort applies to interference with existing

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supermarket. Fifteen months prior to the expiration of its 20-year lease, Safeway closed its

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United States District Court

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noncontractual relations which hold the promise of future economic advantage. In other words, it

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protects the expectation that the relationship will yield desired benefit not necessarily the more

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speculative expectation that a potentially beneficial relationship will eventually arise.” Id. at 524

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(emphasis in original).

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In Silicon Knights, Inc. v. Crystal Dynamics, Inc., 983 F. Supp. 1303 (N.D. Cal. 1997),

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plaintiff – a company that created video game software – entered into a contract with defendant in

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which defendant agreed to fund the production of a certain game in exchange for publication rights.

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Id. at 1306. The relationship apparently soured and, at a certain point, plaintiff alleged that

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defendant made “false, misleading and commercially disparaging statements about [plaintiff’s]

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technical abilities and [its] involvement in the creation and development” of the game to multiple

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parties in the video game industry. Id. at 1307. Plaintiff sued, alleging causes of action including,

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inter alia, intentional interference with prospective economic relationship. As to this cause of

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action, plaintiff alleged that defendant’s assertions that plaintiff was technically incompetent and

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unable to timely create software “induced and/or caused customers and potential customers not to

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purchase video game software and related products from [plaintiff], and induced and/or caused other

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software publishers not to deal with [plaintiff] regarding video game software development.” Id. at

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1312. The court concluded that plaintiffs had failed to allege disruption of “an actual economic

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relationship by means of alleged defamatory statements.” Id. Specifically:

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The complaint does not allege that Silicon Knights was in the midst of
negotiations with 3DO, Microsoft, or any other publisher, and that the
third party pulled out of the negotiations or awarded business to
another because of these alleged acts by Defendants. Moreover,
allegations that Defendants’ undisclosed statements caused potential
customers not to buy Silicon Knights’ video game software asserts the
type of speculative economic relationship disapproved of in
West[side].

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Id. The court then found that “[e]ven if interference with potential customers” was a legitimate basis

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for the tort, plaintiff’s allegations were wholly conclusory. Id.

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Thus, interference with potential customers with whom the plaintiff did not have an existing

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relationship generally is not sufficient to state a claim. To be sure, in some ways, the instant action
is distinguishable from the cases cited above. Westside and Silicon Knights involved situations

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where the defendants did not have any knowledge of any prospective relationships and, as a result,

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the interfering conduct went out to an undefined, undifferentiated market that may have included

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some of the plaintiffs’ potential customers. In the case at bar, Plaintiffs suggest the alleged

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interfering conduct – representations made that gratuities were included in the cost of Uber’s service

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– were directed at a defined universe – Uber app users. However, even if such a scenario would

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satisfy the existing relationship requirement (construed to encompass relationships of one defined

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group to another), the advertising in this case was in fact directed at the market generally and was

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not confined to those who had already signed up for the Uber app.

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Louisiana Pacific Corp. v. James Hardie Building Products, Inc., No. C-12-3433 SC, 2012

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WL 5520394 (N.D. Cal. Nov. 14, 2012), is instructive. There, the plaintiffs alleged that the

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defendant tortiously interfered with its economic advantage by paying Google to direct consumers to

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defendant’s website whenever consumers performed an internet search for plaintiff’s trademarks.

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Id. at *1. Plaintiffs contended that it had an existing relationship with “consumers who visit its

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website to purchase goods and services.” Id. at *2. The court rejected this argument finding: “There

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is a possibility that consumers who search for Plaintiff through Google will choose to purchase

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Plaintiff’s goods or services at some point in the future; however, such consumers do not have an

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existing business relationship with Plaintiff merely because they perform an internet search.” Id.

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Thus, the court concluded that the plaintiff had not show the “requisite ‘promise of future economic

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advantage’” necessary to plead its tortious interference claim. See id. (quoting Google Inc. v. Am.

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Blind & Wallpaper Factory, Inc., No. C03-05340 JF, 2005 WL 832398 (N.D. Cal. Mar. 30, 2005)).

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As in Louisiana Pacific, at the time of the interfering conduct in this case – the alleged

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misrepresentations regarding the payment of gratuities to drivers – the Plaintiffs did not have an

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“existing relationship” with their customers. Rather, they had a “speculative economic relationship”

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or a “hope of future transactions.” Rheumatology Diagnostics Lab., 2013 WL 5694452, at *2;

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Halton Co. v. Streivor, Inc., No. C10-0655 WHA, 2010 WL 2077203, at *5 (N.D. Cal. May 21,

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2010). The alleged representations went out to the market as a whole, including those who had not

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downloaded the Uber app. Those who encountered the representations may or may not have chosen
to download Uber’s application, and those who chose to download the application may or may not

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have chosen to use the application to use the service, an act necessary to create an economic

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relationship with a driver. While the hope and expectations for future relationships may not have

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been as speculative as those at issue in Westside or many of the other cases that have applied the

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“existing relationship” standard, Plaintiffs did not have an “existing” relationship with potential

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Uber customers at the time those potential Uber customers encountered Uber’s allegedly misleading

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advertising and marketing materials.

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At the hearing, the Plaintiffs asserted that the alleged act of interference could be construed

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not simply as making the misrepresentation, but Uber’s failure to remit the gratuities once the

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customers’ payments were made. This act, unquestionably, occurred after the relationship between

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customer and driver had been formed. The alleged interference in this case can be seen as a

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transitional act – it started with the misrepresentation and was consummated with the failure to remit

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the entire gratuity to the driver. However, without the alleged representation (which occurred before

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the relationship was created), the withholding of the alleged “gratuities” would not have been

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wrongful. Therefore, in this case, an essential element of the alleged interference occurred prior to

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the creation of any business relationship; it is also the focal point of Plaintiffs’ interference claim,

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and that is the act by which the timing of the interference should be measured.

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Because this relationship did not exist at the time of the alleged interference, Plaintiffs’
tortious interference claim must be DISMISSED.

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D.

Plaintiffs Have Failed to State an Implied-in-Fact Claim
As this Court previously recognized, a “contract implied in fact ‘consists of obligations

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arising from a mutual agreement and intent to promise where the agreement and promise have not

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been expressed in words.’” Retired Employees Ass’n of Orange Cnty., Inc. v. Cnty of Orange, 52

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Cal. 4th 1171, 1178 (2011) (quoting Silva v. Providence Hospital of Oakland, 14 Cal.2d 762, 773

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(1939)). “‘[I]t is well settled that an action based on an implied-in-fact or quasi-contract cannot lie

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where there exists between the parties a valid express contract covering the same subject matter.”

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Lance Campter Mfg. Corp. v. Republic Indem. Co., 44 Cal. App. 4th 194, 203 (1996).

had an implied-in-fact contract with its customers “pursuant to which the customers pay gratuity for

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Plaintiffs’ breach of implied-in-fact contract cause of action is based on allegations that Uber

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United States District Court

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the benefit of the drivers” – a contract that was breached when Uber failed to remit to the drivers the

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total gratuity amount. FAC ¶ 39. Plaintiffs further allege that they, and the other Uber drivers, are

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third-party beneficiaries of this contract and have suffered as a result of Uber’s breach of this

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contract. Id. In its prior order, this Court found that Plaintiffs had adequately spelled out the

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“circumstances upon which it is plausible that the parties intended Uber to collect passenger

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gratuities through fare payments and that the parties intended the drivers to be third-party

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beneficiaries of the gratuities.” O’Connor, 2013 WL 6354534, at *12. Significant for purposes of

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the instant motion, however, the Court made the observation that there were “no allegations or

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judicially noticed evidence in the record of an express contract between Uber and customers

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covering this subject matter, which could preclude a finding of implied contractual intent to benefit

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the third-party drivers.” Id. at *11. This finding distinguished the Court’s treatment of this claim

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from Plaintiff’s now-dismissed implied-contract claim revolving around the relationship between

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Uber and the drivers. For that implied contract claim, the Court had granted the motion to dismiss

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finding the presence of an express agreement covering the subject matter – the Licensing Agreement

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– precluded an implied contract claim. See id.

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Uber now contends, however, that there is “judicially noticed evidence in the record” of an

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express contract between Uber and customers covering this subject matter – namely, the “User

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Terms and Conditions” to which customers agreed prior to using the Uber application – and that

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these Terms and Conditions foreclose implied contractual relief. Uber asserts that three aspects of

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the Terms and Conditions are relevant. First, the Terms and Conditions contain a “Payment terms”

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section which provides, in relevant part:

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Any fees which the Company may charge you for the Software
or Service are due immediately and are non-refundable. This no
refund policy shall apply at all times regardless of your decision to
terminate your usage, our decision to terminate your usage, disruption
caused to our Software or Service either planned, accidental or
intentional, or any reason whatsoever. The Company reserves the
right to determine final prevailing pricing – Please note the pricing
information published on the website may not reflect the prevailing
pricing.

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. . . The Company may change the fees for our Service or
Software as we deem necessary for our business. We encourage you
to check back at our website periodically if you are interested about
how we charge for the Service of [sic] Software.

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Docket No. 117-2, at 3. Second, the Terms and Conditions contain a “Limitation of Liability”

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section which provides, in relevant part:

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THE COMPANY AND/OR ITS LICENSORS SHALL NOT BE
LIABLE FOR ANY LOSS, DAMAGE OR INJURY WHICH MAY
BE INCURRED BY YOU, INCLUDING BY [sic] NOT LIMITED
TO . . . ANY RELIANCE PLACED BY YOU ON THE
COMPLETENESS, ACCURACY OR EXISTENCE OF ANY
ADVERTISING

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Id. at 5. Finally, the Terms and Conditions have an integration clause which provides: “This

19

Agreement[] comprises the entire agreement between you and the Company and supersedes all prior

20

or contemporaneous negotiations, discussions or agreements, whether written or oral, between the

21

parties regarding the subject matter contained herein.” Id. at 7.4

22
4

23
24
25
26
27
28

Uber requests that this Court take judicial notice of three versions of the Terms and
Conditions, representing the versions that were in force during the class period. Uber additionally
relies on the “incorporation by reference” doctrine which holds that when a “plaintiff’s claim
depends on the contents of a document, the defendant attaches the document to its motion to dismiss,
and the parties do not dispute the authenticity of the document, even though the plaintiff does not
explicitly allege the contents of that document in the complaint, the court may consider that
document when ruling on a motion to dismiss or motion for judgment on the pleadings. See Knievel
v. ESPN, 393 F.3d 1068, 1076 (9th Cir. 2005).
Plaintiffs failed to object to Uber’s request for judicial notice, and, in their opposition, made
arguments based on the substance of the Terms and Conditions. At the hearing, Plaintiffs continued
to state that they had no reason to dispute the authenticity of the documents but appeared to argue

12

1

The Court finds that, as alleged, Plaintiffs have failed to state a claim for breach of implied-

2

in-fact contract. Plaintiffs’ claim rests on the argument that by misrepresenting in advertising to

3

customers that Uber would remit gratuities to the Drivers, Uber had created an implied in fact

4

contract that they would, in fact, do so. However, such a claim would be in direct conflict with the

5

waiver of reliance on advertising expressly contained in the Terms and Conditions.5 Cf.

6

Kurcharczyk v. Regents of Univ. of Cal., 946 F. Supp. 1419 (N.D. 1996) (“[T]erms that conflict with

7

an express written contract cannot be implied in a written contract.”); see also Tollesfson v. Roman

8

Catholic Bishop, 219 Cal. App. 3d 843, 855 (1990) (“[T]here simply cannot exist a valid express

9

contract on one hand and an implied contract on the other, each embracing the identical subject but
requiring different results and treatment.”).

11
For the Northern District of California

United States District Court

10

Accordingly, the purported implied contract encompasses the same subject (Uber’s

12

advertising) and requires a result contrary to that required by the Terms and Conditions of the

13

express contract – a result not allowed by California law of contracts. See Tollesfson, 219 Cal. App.

14

3d at 855 Because the third party beneficiary claim is predicated on the asserted implied-in-fact

15

contract, that claim must fail. Third party beneficiaries cannot claim any rights greater than that

16

held by the direct parties to the contract. See Marina Tenants Ass’n v. Deauville Marine Dev. Co.,

17

Ltd., 181 Cal. App. 3d 122, 132 (1986).

18

Uber’s motion for judgment on the pleadings as to Plaintiffs’ implied-in-fact contract claim

19

is GRANTED.

20

E.

Plaintiffs’ Failure to Allege Actual Reliance Is Fatal to Their UCL Claim Under the

21

“Fraudulent” Prong but Does Not Affect Its “Unlawful” Prong Claim

22

Plaintiffs base their UCL claim under the UCL’s “unlawful” and “fraud” prongs.

23

Specifically, Plaintiffs allege:

24
25
26
27

that the Court should not consider them at the motion to dismiss. Given the availability of the Terms
and Conditions on Uber’s website, and Plaintiffs’ failure to timely object to or oppose the request for
judicial notice or challenge the authenticity of the documents, the Court will GRANT the request for
judicial notice and consider the Terms and Conditions documents.
5

28

Plaintiffs have not argued that the terms of the waiver are a valid part of the contract
between Uber and its customers.

13

1
2
3

Defendant’s conduct constitutes unlawful or fraudulent business acts
or practices, in that Defendant has committed the tort of tortious
interference with prospective economic advantage, breached impliedin-fact contracts with customers for whom the drivers are third party
beneficiaries, and have violated California Labor Code Sections 351
and 2802.

4
5

FAC ¶ 42. Uber seeks to have the UCL claim dismissed to the extent it is based on alleged

6

misrepresentations insofar as Plaintiffs has failed to properly allege reliance. Docket No. 116, at 6;

7

see also Docket No. 128, at 10 (“In its opening memorandum, Defendant argued that the FAC failed

8

to state a UCL claim under the ‘fraudulent’ prong or, to the extent predicated on alleged

9

misrepresentations in Defendant’s advertising, under the ‘unlawful’ prong because Plaintiffs did not

11
For the Northern District of California

United States District Court

10

and could plead their own reliance on the alleged misrepresentations.”).
The fraudulent prong of the UCL does not require a plaintiff to establish the elements of the

12

common law tort of fraud; rather, a “fraudulent business practice is one that is likely to deceive

13

members of the public.” Morgan v. AT&T Wireless Servs., Inc., 177 Cal. App. 4th 1235, 1235

14

(2009). Before a court can evaluate the substance of a plaintiff’s claim, however, it must ensure that

15

the plaintiff has standing under the UCL. Proposition 64, codified at Cal. Bus. & Prof. Code §

16

17204, amended the UCL to limit standing to those individuals who had “suffered injury in fact and

17

has lost money or property as a result of the unfair competition.” Relevant to this action, the

18

California Supreme Court has interpreted this standing provision – specifically the “as a result of the

19

unfair competition language” – as “impos[ing] an actual reliance requirement on plaintiffs

20

prosecuting a private enforcement action under the UCL’s fraud prong.” Id. at 326; see also

21

Morgan, 177 Cal. App. 4th at 1257 (2009) (“In Tobacco II, the Supreme Court held that this

22

standing requirement . . . imposes an actual reliance requirement on named plaintiffs seeking relief

23

under the fraudulent prong of the UCL.” (citation omitted)); Rosado v. eBay, — F. Supp. 2d — ,

24

2014 WL 2945774, at *5 (N.D. Cal. June 30, 2014) (noting that Tobacco II held “that for a

25

fraudulent business practices claim, the UCL mandates that plaintiff demonstrate ‘actual reliance’

26

upon the defendant’s misrepresentation or omission”).

27
28

In light of this precedent, courts have recognized that UCL fraud plaintiffs must allege their
own reliance – not the reliance of third parties – to have standing under the UCL. For example, in

14

1

ZL Technologies v. Gartner, Inc., No. CV 09-02393 JF (RS), 2009 WL 3706821 (N.D. Cal. Nov. 4,

2

2009), the court agreed with defendant’s argument that the plaintiff “lack[ed] standing to bring a

3

UCL claim sounding in fraud because [plaintiff] alleges not its own reliance upon the Alleged

4

Defamatory Statements, but that of third parties – potential [plaintiff] customers – resulting in a loss

5

of profits and injury to [plaintiff].” Id. at *11. Similarly, in Jent v. Northern Trust Corp., No. C13-

6

01684 WBS CKD, 2013 WL 5806024 (E.D. Cal. Oct. 28, 2013), the court found that plaintiff had

7

failed to allege actual reliance on an allegedly fraudulent notice of default. Rather, the plaintiff had

8

alleged that “the financial institutions which plaintiffs sought an extension of credit relied on the

9

NOD.” Id. at *3, *4; see also U.S. Legal Support, Inc. v. Hofioni, No. S-13-01770 LKK/AC, 2013

11
For the Northern District of California

United States District Court

10

WL 6844756, at *15 (N.D. Cal. Dec. 20, 2013).6
At the hearing, Plaintiffs clarified that they do not seek to assert “fraud” as an independent

12

basis for liability under the UCL, but that Uber’s misrepresentations form the basis of their tortious

13

interference with prospective economic advantage claim as the misrepresentations constitute the

14

“independent wrongful act” required by that tort. Accordingly, Plaintiffs appear to be asserting that

15

the tortious interference claim also forms the basis for a UCL claim under the fraudulent (as well as

16

unlawful) prong.

17

This claim is problematic. First, the Court has dismissed Plaintiffs’ tortious interference

18

claim, rending this argument moot. Second, even if the tortious interference claim still existed, it

19

would be a claim that “sounded in fraud;” it would therefore require pleading “actual reliance”

20

whether asserted under the fraudulent prong under the UCL or as predicate unlawfulness under the

21

unlawful prong. Courts have recognized that Tobacco II’s “actual reliance” requirement “applies

22

equally to the ‘unlawful’ prong of the UCL when the predicate unlawfulness is misrepresentation

23

and deception.” See Swearingen v. Pacific Foods of Oregon, Inc., No. 13-cv-04157-JD, 2014 WL

24

3767052, at *2 (N.D. Cal. July 31, 2014) (internal quotation marks omitted) (emphasis added).

25

Plaintiffs have failed to allege such reliance. The FAC plausibly alleges facts suggesting that Uber’s

26
6

27
28

The same principle governs normal fraud-based claims (i.e., claims asserting fraud outside
the confines of the UCL). See, e.g., City & County of San Francisco v. Philip Morris, Inc., 957 F.
Supp. 1130 (N.D. Cal 1997) (“[A] fraud action cannot be maintained based on a third party’s
reliance.”).

15

1

alleged misrepresentations regarding their gratuity practices harmed the Plaintiffs. However,

2

Plaintiffs have not alleged their own reliance on Uber’s misrepresentations. Rather, the clear import

3

of the FAC is that Uber’s customers relied on the alleged misrepresentations. This third-party

4

reliance is insufficient to establish standing under the fraud prong of the UCL.

5
6

For the foregoing reasons, the Court will DISMISS Count 5 to the extent it purports to assert
a claim under the fraudulent prong of the UCL.

7

The Court finds, however, that the lack of pleading “actual” reliance does not affect

predicated on misrepresentation. Here, Plaintiffs have disclaimed any intention of relying on alleged

10

misrepresentations as the basis for an unlawfulness claim and Plaintiffs’ remaining predicate claims

11
For the Northern District of California

Plaintiffs’ ability to state a UCL claim under the “unlawful” prong as to those unlawful acts not

9

United States District Court

8

(besides, e.g., the tortious interference claim which is based on fraud) allege statutory Labor Code

12

violations. Accordingly, the remaining UCL unlawful claim does not sound in fraud and, therefore,

13

does not require a showing of actual reliance. While Plaintiffs’ UCL claim under the fraudulent

14

prong will be dismissed, this does not affect Plaintiffs’ claim under the “unlawful” prong based on

15

statutory violations.

16

F.

17

The California Laws Upon Which Plaintiffs Rely Do Not Apply Extra-Territorially
Finally, Uber seeks to have Plaintiffs’ FAC dismissed to the extent that it seeks to apply

18

California law to Plaintiffs Rolle and Anderson or any putative class members who reside and

19

provide transportation services outside California. Docket No. 116, at 26. Plaintiffs oppose Uber’s

20

motion on this ground, asserting that (1) the California laws at issue in this case do not contain

21

geographical limitations and (2) any presumption against extraterritorial application of these laws is

22

overcome by the presence of a California choice-of-law provision in the Licensing Agreement.

23

Docket No. 126, at 27. This Court previously considered, and rejected, Uber’s arguments against

24

extra-territorial application of California law in this action, finding that the Ninth Circuit’s decision

25

in Gravquick A/S v. Trimble Nav. Int’l Ltd., 323 F.3d 1219, 1223 (9th Cir. 2003), established that the

26

“the presumption against extraterritorial application of a law is rebutted when there is a choice-of-

27

law clause governing the parties’ relationship. O’Connor, 2013 WL 6354534, at *4. For the

28

16

1

reasons discussed below, the Court now concludes that its earlier holding was in error, and that the

2

California statutes involved in this action do not apply extra-territorially.

3
4
5
6
7

Under California law, a presumption exists against the extraterritorial application state law.
In Sullivan v. Oracle Corp., 51 Cal. 4th 1191 (2011), the California Supreme Court stated:
However far the Legislature’s power may theoretically extend, we
presume the Legislature did not intend a statute to be “operative, with
respect to occurrences outside the state, . . . unless such intention is
clearly expressed or reasonably to be inferred from the language of the
act or from its purpose, subject matter or history.”

8

Id. at 1207 (quoting Diamond Multimedia Systems, Inc. v. Superior Court, 19 Cal. 4th 1036, 1059

9

(1999)). In its prior order in this matter, the Court rejected Uber’s arguments and found that
extraterritorial application of California law was proper in this action. While noting the presumption

11
For the Northern District of California

United States District Court

10

against extraterritorial application, the Court found (1) that there were no “express geographical

12

limitations in the laws at issue which would preclude the parties’ agreement to apply California law

13

extraterritorially” and (2) that the Ninth Circuit’s decision in Gravquick established that the “the

14

presumption against extraterritorial application of a law is rebutted when there is a choice-of-law

15

clause governing the parties’ relationship. O’Connor, 2013 WL 6354534, at *4.

16
17
18
19
20

The Court’s prior order rested on a fundamental mis-reading of Gravquick. The relevant
portion of the Gravquick held:
If a state law does not have limitations on its geographical scope,
courts will apply it to a contract governed by that state’s laws, even if
parts of the contract are performed outside the state. When a law
contains geographical limitations on its application, however, courts
will not apply it to parties falling outside those limitations, even if the
parties stipulate that the law should apply.

21
22

Gravquick, 323 F.3d at 1223 (emphases added). It is thus apparent that the court in Gravquick did

23

not hold that a California choice of law provision can overcome the presumption against extra-

24

territorial application of California law. Instead, the court recognized that parties’ agreement to

25

apply California law must yield in those circumstances where the law in question contains

26

“geographical limitations.” While Gravquick makes clear one such circumstance is where the

27

legislation contains an explicit limitation, there is no logical reason to reach a different result where

28

that limitation is implicit, especially when the California Supreme Court has made clear that such

17

1

limitations are presumed to be present unless the legislature’s contrary intention “is clearly

2

expressed or reasonably to be inferred from the language of the act or from its purpose, subject

3

matter or history.” Sullivan v. Oracle Corp., 51 Cal. 4th at 12077; see also North Alaska Salmon Co.

4

v. Pillsbury, 174 Cal. 1, 6 (1916) (“[T]here is nothing in the act which, by express words or clear

5

implication, manifests an intent to have it operate extraterritorially, and . . . settled rules of

6

interpretation prohibit our giving it any such effect.”); cf. Morrison v. Nat’l Australia Bank, 561

7

U.S. 247, 248 (2010) (“When a statute gives no clear indication of an extraterritorial application, it

8

has none.”).8

9

Moreover, a contractual choice of law provision that incorporates California law presumably
incorporates all of California law – including California’s presumption against extraterritorial

11
For the Northern District of California

United States District Court

10

application of its law. See Wright v. Adventures Rolling Cross Country, Inc., No. 12-cv-0982-EMC,

12

Docket No. 22, at 6 (N.D. Cal. May 3, 2012) (“[E]ven if the provision identified by Plaintiffs were a

13

choice-of-law provision, there is nothing to indicate that the parties intended to incorporate only

14
7

15
16
17
18
19
20
21
22
23
24
25
26
27
28

While Gravquick upheld the extra-territorial application of the California Equipment
Dealers Act (“CEDA”) through a contract that contained a California choice-of-law provision, it did
so on the ground that (1) there was no “express geographical limitation” in the CEDA and (2) there
was “significant evidence” that the California legislature intended to permit extra-territorial
application of the CEDA. Specifically, the Court found significant the fact that the bill that
eventually became CEDA had originally defined “equipment dealers” to only encompass those “in
this state.” This language was removed, and the court found that the “removal is a strong indication
that the legislature did not intend strictly to limit the CEDA’s application to dealers located in
California.” Id. at 1223. As discussed in the text below, the California Labor Code sections at issue
do not evidence a similar legislative intent to permit extraterritorial application.
Further, in previously addressing this question, this Court noted the lack of “any express
geographical limitations in the laws at issue which preclude the parties’ agreement to apply
California law extraterritorially.” O’Connor, 2013 WL 6354534, at *4. This Court placed too much
emphasis on the lack of any express indication by the legislature disclaiming extra-territorial
application This Court did not sufficiently credit the California’s Supreme Court articulation of a
presumption against extra-territoriality – including in decisions which came after Gravquick. See
Sullivan, 51 Cal. 4th at 1207.
8

Plaintiffs cite the recent opinion from the Supreme Judicial Court of Massachusetts in
which the court, relying on Gravquick stated: “Given that the parties agreed to construe the contract
in accordance with Massachusetts law, that there is no express limitation on the territorial reach of
the Massachusetts independent contractor statute, and that there is no apparent reason to disregard
the parties’ choice of law, we conclude that the Massachusetts independent contractor statute applies
to the plaintiffs’ misclassification claim.” Taylor v. Eastern Connection Operating, Inc., 988 N.E.2d
408, 414 (Mass. 2013). First, the Court disagrees with the Supreme Judicial Court’s reading of
Gravquick for the reasons discussed in this opinion. Second, as Taylor was interpreting and
applying Massachusetts law, it is not binding on this Court interpreting California law.

18

1

portions of California law and exclude the incorporation of California law’s presumption against

2

extraterritoriality.”); see also Cotter v. Lyft, Inc., — F. Supp. 2d — , 2014 WL 3884416, at *4 (N.D.

3

Cal. Aug. 7, 2014) (“Even if the choice of law provision were intended to confer upon out-of-state

4

drivers a cause of action for violation of California’s wage and hour laws, it could not do so. An

5

employee cannot create by contract a cause of action that California law does not provide.”).

6

Accordingly, the Court concludes that the choice-of-law provision in the Licensing

absent an indication that such a presumption does not apply. The relevant question, therefore, is

9

whether there is a discernible legislative intent not to have “geographic limitations” in the statutes

10

relied upon by the Plaintiffs – specifically Cal. Labor Code Sections 351 (covering gratuities) and

11
For the Northern District of California

Agreement does not overcome the presumption against extra-territorial application of California law

8

United States District Court

7

2802 (covering reimbursement for employment related expenses). The Court finds there is no such

12

intent.

13

Here, there are indications in the legislative history of the Labor Code which support a

14

finding that the California legislature did not intend Sections 351 or 2802 to apply extraterritorially.

15

First, California’s presumption against extraterritorial application of its laws dates back to at least

16

1916. In North Alaska Salmon Co. v. Pillsbury, the California Supreme Court expressly spoke of the

17

“presumption that [the legislature] did not intend to give its statutes any extraterritorial effect.” 174

18

Cal. at 4. It further stated the rule that has since been consistently applied by California courts ever

19

since – “The intention to make the act operative, with respect to occurrences outside the state, will

20

not be declared to exist unless such intention is clearly expressed or reasonably to be inferred ‘from

21

the language of the act or from its purpose, subject matter or history.’” Id. Despite this clear

22

standard, in originally enacting Labor Code Sections 351 and 2802 in 1937, the California

23

legislature failed to specify that either provision should be applied extra-territorially.

24

Second, the legislature has, in other Labor Code provisions, expressly provided for extra-

25

territorial application. For example, in Tidewater Marine Western, Inc. v. Bradshaw, 14 Cal. 4th

26

557 (1996), the California Supreme Court noted that “[i]n some circumstances, state employment

27

law explicitly governs employment outside the state’s territorial boundaries.” Id. at 578. The court

28

cited two statutes in the worker’s compensation realm – Cal. Labor Code § 3600.5 (providing

19

was injured out of state) and § 5305 (providing the Division of Workers’ Compensation with

3

jurisdiction over such claims. See Tidewater, 14 Cal. 4th at 578; see also Cotter, 2014 WL

4

3884416, at *3 (“[W]here the legislature has intended a Labor Code provision to apply to a broader

5

range of people, it has said so explicitly.”). Where it so desired, the California legislature provided

6

for extraterritorial applications; the California legislature did not so provide with respect to Sections

7

351 and 2802. The structure and history of the Labor Code, therefore, reinforce the presumption

8

against extraterritoriality. This distinguishes this case from Gravquick, where the Ninth Circuit

9

found evidence in the legislative history of the California Equipment Dealers’ Act suggesting that

10

the California legislature intended the Act to appear extraterritorially. See Gravquick, 323 F.3d at

11
For the Northern District of California

protection for injuries suffered by employees who were hired or regularly worked in California but

2

United States District Court

1

1223.

12

Accordingly, the Court concludes that the Labor Code violations upon which Plaintiffs rely

13

do not apply extraterritorially and, therefore, cannot apply to those Plaintiffs or unnamed class

14

members who worked in states other than California. See, e.g., Cotter, 2014 WL 3884416, at *3

15

(“[P]laintiffs propose to represent class members who are residents of other states, who drive for

16

Lyft exclusively in those states, and who apparently never set foot in California . . . . The California

17

wage and hour laws at issue here do not create a cause of action for people who fit this description,

18

even if they work for a California-based company that makes all employment-related decisions in

19

California.”); Campagna v. Language Line Servs., Inc., No. 5:08-CV-02488-EJD, 2012 WL

20

1565229 (N.D. Cal. May 2, 2012) (“None of the cases read California’s wage and hour laws to cover

21

out-of-state work performed by nonresidents who primarily work outside California.”); Sarviss v.

22

General Dynamics Info. Tech., Inc., 663 F. Supp. 2d 883, 900 (C.D. Cal. 2009) (“Although the cases

23

discussing the extraterritorial application of California’s wage and hour law are sparse, those

24

decisions that do discuss it have tended to find that California wage and hour provisions do not

25

apply to non-resident Californians who work primarily outside of California.”).

26

The Court reaches a similar result with regards to Plaintiffs’ UCL claim. As the California

27

Supreme Court held in Sullivan, “[n]either the language of the UCL nor its legislative history

28

provides any basis for concluding the Legislature intended the UCL to operate extraterritorially.

20

1207. Thus, the court addressed the applicability of a UCL claim predicated on alleged violations of

3

the Fair Labor Standards Act. The Court noted that while the “failure to pay legally required

4

overtime compensation certainty is an unlawful business act or practice” under the UCL, and,

5

therefore, the “UCL might conceivably apply to plaintiffs claims if their wages were paid (or

6

underpaid) in California,” the facts did not reveal where the wages were paid. Id. at 1208. It further

7

held that the UCL “does not apply to overtime work performed outside California for a California-

8

based employer by out-of-state plaintiffs . . . based solely on the employer’s failure to comply with

9

the overtime provisions of the FLSA.” Id. at 1209. This reasoning is conclusive here, as well. The

10

Court concludes that the UCL does not apply to work performed outside California by out-of-state

11
For the Northern District of California

Accordingly, the presumption against extraterritoriality applies to the UCL in full force.” Id. at

2

United States District Court

1

Plaintiffs based on the employer’s failure to reimburse the Plaintiffs for employment related

12

expenses or to pay them gratuities they were owed.9

13

G.

14

Plaintiffs’ “Statutory Gratuity Violation” Claim (Count III) Will Be Dismissed
Plaintiff’s third cause of action is entitled “Statutory Gratuity Violation” and provides, in its

15

entirety: “Defendant’s conduct, as set forth above, in failing to remit all gratuities to the Uber drivers

16

constitutes a violation of California Labor Code Section 351. This violation is enforceable pursuant

17

to UCL § 17200. Plaintiffs previously conceded, and this Court held, that “there is no private right

18

of action under section 351.” O’Connor, 2013 WL 6354534, at *7. However, the Court agreed with

19

Plaintiff that violation of this section could form the predicate needed for an “unlawfulness” UCL

20

claim. See id. (“Plaintiffs can proceed to allege Defendants’ violation of section 351 as the predicate

21

unlawful activity for their claim under the UCL.”).

22
23
9

24
25
26
27
28

Because the only remaining claims in this suit are those that apply only within California
(the California statutory claims and the UCL claims predicated thereon), the Court recognizes this
could limit the scope of the Court’s order regulating Uber’s ability to communicate with class
members (Docket Nos. 60, 99). However, because this order has been appealed, the Court does not
have jurisdiction to consider any modification of it. Cf. Small v. Operative Plasterers’ & Cement
Masons’ Int’l Ass’n Local 200, 611 F.3d 483, 495 (9th Cir. 2010) (“Because ‘[t]he filing of a notice
of appeal . . . confers jurisdiction on the court of appeals and divests the district court of its control
over those aspects of the case involved in the appeal,’ we conclude that the district court lacked
jurisdiction to modify the injunction.” (quoting Griggs v. Provident Consumer Disc. Co., 459 U.S.
56, 58 (1982) (per curiam)).

21

1

In the FAC, Plaintiffs’ UCL cause of action expressly states that it is based, in part, on the

2

fact that Uber had “violated California Labor Code Sections 351 and 2802” and that, as a result,

3

Plaintiffs suffered, inter alia, a “loss of gratuities to which they were entitled and customers

4

expected them to receive.” FAC ¶ 42. In light of this allegation under Count 5, having a separate

5

count entitled “Statutory Gratuity Violation (Enforced Through UCL),” Count 3 is redundant.

6

Accordingly, Plaintiffs’ third cause of action is DISMISSED with the understanding that dismissal

7

of this separately captioned claim (Count 3) does not bar Plaintiffs from predicating their UCL claim

8

on alleged violations of Section 351.

9

CONCLUSION

For the foregoing reasons, Uber’s motion for judgment on the pleadings is GRANTED.

11
For the Northern District of California

United States District Court

10

III.

Plaintiffs’ implied contract and tortious interference with prospective economic advantage claims

12

are DISMISSED with prejudice. Plaintiffs’ “Statutory Gratuity Violation” cause of action is

13

DISMISSED with prejudice as superfluous. Plaintiff’s claim under the UCL is DISMISSED with

14

prejudice to the extent it is based on the UCL’s fraudulent prong.

15

This order disposes of Docket No. 116.

16
17

IT IS SO ORDERED.

18
19

Dated: September 4 , 2014

20

_________________________
EDWARD M. CHEN
United States District Judge

21
22
23
24
25
26
27
28

22