Johnson v. Uber Technologies, Inc.
Filing
83
MEMORANDUM Opinion and Order Signed by the Honorable John Z. Lee on 9/20/18.Mailed notice(ca, )
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
CHARLES CHRISTOPHER JOHNSON,
individually and as the representative of a
class of similarly-situated persons,
Plaintiff,
v.
UBER TECHNOLOGIES, INC.,
Defendant.
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16 C 5468
Judge John Z. Lee
MEMORANDUM OPINION AND ORDER
Plaintiff Charles Johnson, on behalf of himself and as representative of a
putative class, has sued Defendant Uber Technologies, Inc. (“Uber”) for allegedly
sending him an unsolicited text message in violation of the Telephone Consumer
Protection Act (“TCPA”), 47 U.S.C. § 227. The parties have cross-moved for summary
judgment as to whether they agreed to arbitrate this dispute. For the following
reasons, Uber’s motion is granted [56], and Johnson’s motion is denied [75]. The class
claims are dismissed without prejudice, and this case is stayed pending the resolution
of arbitration proceedings.
Factual Background
The following facts are undisputed. Johnson is a college graduate who works
as a freelancer in animation, production, and art management. Def.’s LR 56.1(a)(3)
Stmt. ¶¶ 1–2, ECF No. 58. His job involves working with technology, software, and
mobile applications (“apps”). Id. ¶ 3. Johnson has downloaded apps on his phone and
is familiar with the type of sign-up process that involves agreeing to the terms and
conditions required by the entity providing the app. Id. ¶ 4.
Uber is a software technology company. Id. ¶ 8. Uber’s software application
(“Uber app”) enables smartphone users to request rides from third-party drivers. Id.
On July 8, 2013, Johnson downloaded the Uber app to his Android-operated
smartphone.
Id. ¶ 25. He then completed each of the steps required to create an
Uber account. Id. ¶¶ 25–27; see Pl.’s Ex. B, Mi Dep. Ex. 6, Johnson Analytics, ECF
No. 77-2.
According to Vincent Mi, Uber’s Senior Software Engineer, Johnson used a
sign-up process that required him to complete certain steps through screens entitled:
(1) Create an Account, (2) Create a Profile, and (3) Link Card. Def.’s LR 56.1(a)(3)
Stmt. ¶ 9. No scrolling was required to view content on any of the three screens. Id.
¶ 10. The user is required to fully complete each screen before proceeding to the
following screen. Id. ¶ 11.
On the initial “Create an Account” screen, the user inputs in an email address,
mobile phone number, and password. Id. ¶ 12. After providing that information, the
user is prompted to click on the text of the “Next” button, which appears in the upperright corner. Id. After clicking this button, the user is directed to the “Create a
Profile” screen, which contains fields for the user’s first and last names. Id. ¶ 13.
Once these fields are completed, the user is again prompted to click on the text of the
“Next” button that appears in the upper-right corner. Id. ¶ 14.
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After clicking the “Next” button, the user then is directed to the “Link Card”
screen. Id. This screen contains a total of five lines of content. Id. ¶ 15. The first
line is a field for a credit or debit card number. Id. The second line features the text
“scan your card” and “enter promo code.” Id. The third line states: “This card will
only be charged when you request an Uber.” Id.
The fourth and fifth lines at the
bottom of the screen warn that “[b]y creating an Uber account, you agree to the Terms
of Service & Privacy Policy.” Id. This statement appeared in an easy-to-read font.
Id. Additionally, the words, “Terms of Service & Privacy Policy,” are contained in an
outlined box, indicating a hyperlink that, when clicked, brings the user to a screen
displaying Uber’s Terms of Service in effect at the time. Id. ¶¶ 15, 18.
When Johnson created an Uber account, the first paragraph of the Terms of
Service provided the following:
In order to use the Service . . . and the associated
application . . . you must agree to the terms and conditions
that are set out below. By using or receiving any services
supplied to you by the Company (collectively, the
“Service”), and downloading, installing or using any
associated application supplied by the Company which
purpose is to enable you to use the Service (collectively, the
“Application”), you expressly acknowledge and agree to be
bound by the terms and conditions of the Agreement and
any future amendments and additions to this Agreement
as
published
from
time
to
time
at
https://www.uber.com/terms or through the Service.
Pl.’s LR 56.1(b)(3)(B) Stmt. ¶ 19, ECF No. 77. The Terms of Service defined “use” as
“access[ing] or us[ing] the Service or Application.” Def.’s Ex. D, Terms and Conditions
updated May 17, 2013, ECF No. 63.
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The Terms of Service also included a section entitled “Dispute Resolution,”
which stated in the first paragraph:
You and Company agree that any dispute, claim or
controversy arising out of or relating to this Agreement or
the breach, termination, enforcement, interpretation or
validity thereof or the use of the Service or Application
(collectively, “Disputes”) will be settled by binding
arbitration, except that such party retains the right to
bring an individual action in small claims court and the
right to seek injunctive or other equitable relief in a court
of competent jurisdiction to prevent the actual or
threatened infringement, misappropriation or violation of
a party’s copyrights, trademarks, trade secrets, patents or
other intellectual property rights. You acknowledge and
agree that you and Company are each waiving the
right to a trial by jury or to participate as a plaintiff
or class User in any purported class action or
representative proceeding.
Def.’s LR 56.1(a)(3) Stmt. ¶ 20 (emphasis in original).
Johnson admits it is possible that he may have seen, clicked on, read, and
indicated that he accepted Uber’s Terms of Service & Privacy Policy when he created
his Uber account, but he does not recall doing so. Id. ¶ 28. However, it is worth
noting that, although Johnson also could not recall entering payment information
when he created an account, it is undisputed that Uber’s records show that Johnson
submitted his Chase debit card information on the “Link Card” screen. Id. ¶¶ 29, 32.
Within a few days of creating the account, Johnson opened the Uber app to see
how it worked, to see what the rates were like, to check out the map to see if Uber
drivers were in his area, to look at drivers’ estimated arrival times, and to generally
determine whether the app was useful in comparison to hailing a cab. Id. ¶ 34. That
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said, Johnson never requested a ride using the Uber app. Pl.’s LR 56.1(b)(3)(C) Stmt.
¶ 46, ECF No. 77.
Johnson claims to have deleted the Uber app from his phone, but he does not
have any documentary evidence to support that assertion. Def.’s LR 56.1(a)(3) Stmt.
¶ 38. Johnson claims that afterwards, Uber sent a single unsolicited text message to
his mobile phone number asking him whether he wanted to sign up to be an Uber
driver. Pl.’s LR 56.1(b)(3)(C) Stmt. ¶ 52.
Legal Standard
“The court shall grant summary judgment if the movant shows that there is no
genuine dispute as to any material fact and the movant is entitled to judgment as a
matter of law.” Fed. R. Civ. P. 56(a); see also Shell v. Smith, 789 F.3d 715, 717 (7th
Cir. 2015). To survive summary judgment, the nonmoving party must “do more than
simply show that there is some metaphysical doubt as to the material facts,”
Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986), and
instead must “establish some genuine issue for trial such that a reasonable jury could
return a verdict in her favor.” Gordon v. FedEx Freight, Inc., 674 F.3d 769, 773 (7th
Cir. 2012).
The evidence considered for summary judgment “must be admissible if offered
at trial, except that affidavits, depositions, and other written forms of testimony can
substitute for live testimony.” Malin v. Hospira, Inc., 762 F.3d 552, 554–55 (7th Cir.
2014). The Court gives the nonmoving party “the benefit of conflicts in the evidence
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and reasonable inferences that could be drawn from it.” Grochocinski v. Mayer Brown
Rowe & Maw, LLP, 719 F.3d 785, 794 (7th Cir. 2013).
Moreover, Federal Rule of Civil Procedure 56 requires a court to grant a
summary judgment motion “against a party who fails to make a showing sufficient to
establish the existence of an element essential to that party’s case, and on which that
party will bear the burden of proof at trial.” Celotex Corp. v. Catrett, 477 U.S. 317,
322 (1986). The moving party has the initial burden of establishing that there is no
genuine issue of material fact.
See id.
Once the moving party has sufficiently
demonstrated the absence of a genuine issue of material fact, the nonmoving party
must then set forth specific facts showing there are disputed material facts that must
be decided at trial. See id. at 321–22.
Analysis
The Federal Arbitration Act (“FAA”) was enacted to “reverse the longstanding
judicial hostility to arbitration agreements that had existed at English common law
and had been adopted by American courts, and to place arbitration agreements upon
the same footing as other contracts.” Gilmer v. Interstate/Johnson Lane Corp., 500
U.S. 20, 24 (1991)). “The FAA provides for stays of proceedings in federal district
courts when an issue in the proceeding is referable to arbitration, and for orders
compelling arbitration when one party has failed or refused to comply with an
arbitration agreement.” E.E.O.C. v. Waffle House, Inc., 534 U.S. 279, 289 (2002).
Pursuant to the FAA, courts are mandated to enforce valid, written arbitration
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agreements. Tinder v. Pinkerton Sec., 305 F.3d 728, 733 (7th Cir. 2002) (citing 9
U.S.C. § 2).
To this end, “arbitration is a creature of contract.” Sgouros v. TransUnion
Corp., 817 F.3d 1029, 1033 (7th Cir. 2016). It is “well settled that where the dispute
at issue concerns contract formation, the dispute is generally for courts to decide.”
Granite Rock Co. v. Int’l Bhd. of Teamsters, 561 U.S. 287, 296 (2010); see Mohammed
v. Uber Techs., Inc., 237 F. Supp. 3d 719, 726–28 (N.D. Ill. 2017).
Whether an agreement to arbitrate has been formed is governed by state law.
Sgouros, 817 F.3d at 1034. Because neither party contends there is a difference
between California or Illinois law, the Court need not perform a choice-of-law analysis
and will apply the law of the forum state. See Caisse Nationale de Credit Agricole v.
CBI Indus., Inc., 90 F.3d 1264, 1271 n.3 (7th Cir. 1996); see also Nationwide
Advantage Mortg. Co. v. GSF Mortg. Corp., 827 F.3d 577, 580 (7th Cir. 2016).
Illinois law requires that a consumer be provided reasonable notice of all the
terms and conditions of an agreement as well as reasonable notice that, by clicking a
button, the consumer is assenting to the agreement. See Sgouros, 817 F.3d at 1034–
36. “This is a fact-intensive inquiry: we cannot presume that a person who clicks on
a box that appears on a computer screen has notice of all contents not only of that
page but of other content that requires further action (scrolling, following a link,
etc.).” Id. at 1034. As part of this inquiry, the court considers whether a reasonable
person would be misled, confused, misdirected, or distracted by the manner in which
the terms and conditions are presented. Id.
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The Court finds Hubbert v. Dell Corp., 835 N.E.2d 113, 118–19 (Ill. App. Ct.
2005), instructive. In that case, a putative class sued Dell for deceptive advertising
after purchasing computers through Dell’s website, and Dell moved to compel
arbitration.1 Id. The court held that the statement “All sales are subject to Dell’s
Term[s] and Conditions of Sale,” which appeared on web forms the plaintiffs
completed to make their purchases, “would place a reasonable person on notice that
there were terms and conditions attached to the purchase and that it would be wise
to find out what the terms and conditions were before making a purchase.” Id. at
118, 122.
The court further held that the statement, when combined with the
accessibility of the terms and conditions via hyperlinks, “was sufficient notice to the
plaintiffs that purchasing the computers online would make the ‘Terms and
Conditions of Sale’ binding on them.” Id. at 122.
Similar to Dell’s website in Hubbert, the app that Johnson used to create his
Uber account included the following statement: “By creating an Uber account, you
agree to the Terms of Service & Privacy Policy.” See Def.’s LR 56.1(a)(3) Stmt. ¶ 15.
The statement appeared in an easy-to-read font on an uncluttered screen, and no
scrolling was required to view it. Id. ¶¶ 10, 15, 17. The words “Terms of Service &
Privacy Policy” in the statement also served as a hyperlink, which appeared in a
larger-sized font, enclosed in an outlined box. See id. The hyperlink, when clicked,
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While the Illinois Appellate Court applied Texas law, it held that regardless of
whether Texas or Illinois law applied, there would “be no substantial difference in the
outcome.” Id. at 120; see Sgouros, 817 F.3d at 1035 (applying Illinois law and stating “[t]he
closest Illinois case on point is Hubbert v. Dell Corp., 359 Ill. App. 3d 976, 296 Ill. Dec. 258,
835 N.E.2d 113 (2005).”).
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brought the user to a screen displaying Uber’s Terms of Service in effect at the time.
Id. ¶¶ 15, 18. As in Hubbert, the Court holds that the manner in which this statement
and the Terms of Service were presented placed a reasonable person on notice that
there were terms incorporated with creating an Uber account and that, by creating
an account, he or she was agreeing to those terms.
The cases upon which Johnson relies are readily distinguishable. See Sgouros,
817 F.3d at 1035 (denying motion to compel arbitration where the web pages
completed to make a purchase “contained no clear statement that [the] purchase was
subject to any terms and conditions of sale” and moreover, actively misled the
customer); Nguyen v. Barnes & Noble Inc., 763 F.3d 1171, 1175–76 (9th Cir. 2014)
(denying motion to compel arbitration where website did not prompt user to click on
the hyperlink to terms and conditions before purchasing product); Specht v. Netscape
Commc’ns Corp., 306 F.3d 17, 32 (2d Cir. 2002) (denying motion to compel arbitration
where website lacked “reasonably conspicuous notice that the [users were] . . . about
to bind themselves to contract terms”). Unlike the websites in those cases, the Uber
app contained a clear and conspicuous statement that, by creating an Uber account,
a user agreed to the Terms of Service & Privacy Policy and prompted the user to click
the hyperlink by displaying it prominently in an outlined box.
The Court finds the reasoning in Meyer v. Uber Technologies, Inc., 868 F.3d 66
(2d Cir. 2017), persuasive.
In that case, the Second Circuit held that, under
California law, the plaintiff had agreed to a mandatory arbitration clause by creating
an account using a version of Uber’s smartphone app that contained the same
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statement and hyperlink as in this case. See id. at 80. In particular, the Meyer court
concluded that “the Payment Screen provided clear notice that there were terms that
governed” and that by creating an Uber account, the plaintiff “was agreeing to the
terms and conditions accessible via the hyperlink, whether he clicked on the
hyperlink or not.” Id. at 79–80. The court therefore vacated the district court’s denial
of the motion to compel arbitration. 868 F.3d at 81. As in Meyer, the Court holds
that the “Link Card” screen expressly warned that, by creating an account, the user
was agreeing to be bound by the Terms of Service accessible via the hyperlink.
Furthermore, a reasonable user would know that, by entering his debit or credit card
information on that screen, he was creating an Uber account. Finally, the fact that
Johnson elected not to read the actual terms of service, when he was given an
opportunity to do so, has no probative force. See Hill v. Gateway 2000, Inc., 105 F.3d
1147, 1148 (7th Cir. 1997) (“A contract need not be read to be effective; people who
accept take the risk that the unread terms may in retrospect prove unwelcome.”).
For all of these reasons, Johnson has failed to raise a genuine dispute as to
whether he entered into an enforceable agreement to arbitrate.
Undeterred, Johnson further argues that, even if he did enter into an
arbitration agreement, his TCPA claim does not fall within its scope. “Once it is clear,
however, that the parties have a contract that provides for arbitration of some issues
between them, any doubt concerning the scope of the arbitration clause is resolved in
favor of arbitration as a matter of federal law.” Gore v. Alltel Commc’ns, LLC, 666
F.3d 1027, 1032 (7th Cir. 2012). “To this end, a court may not deny a party’s request
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to arbitrate an issue ‘unless it may be said with positive assurance that the
arbitration clause is not susceptible of an interpretation that covers the asserted
dispute.’” Kiefer Specialty Flooring, Inc. v. Tarkett, Inc., 174 F.3d 907, 909 (7th Cir.
1999) (quoting United Steelworkers v. Warrior & Gulf Navigation Co., 363 U.S. 574,
582–83 (1960)).
As Uber points out, the Terms of Service specifically permit Uber to text
promotional offers to its customers. See Def.’s Ex. D, at UBER00000015. Because
Johnson’s TCPA claim may arguably fall within the parameters of this provision, the
claim must be arbitrated.
See Lainer v. Uber Techs., Inc., No. CV1509925
BROMRWX, 2016 WL 7444925, at *4 (C.D. Cal. May 11, 2016) (granting a motion to
compel arbitration of a TCPA claim based on a promotional text to an Uber rider to
become an Uber driver and holding that the dispute was within the scope of the
arbitration agreement).
In addition, Uber argues that, by agreeing to the broad language in the
arbitration clause, the parties have delegated to the arbitrator any determination
requiring its interpretation, including whether a dispute falls within the clause’s
scope. See Def.’s Mem. Supp. Summ. J. at 15; Def.’s Reply Br. at 7 n.4. In this regard,
“[w]hether a particular dispute must be arbitrated is generally a question for judicial
determination, unless the parties clearly and unmistakably provided otherwise in
their agreement.” Duthie v. Matria Healthcare, Inc., 540 F.3d 533, 536 (7th Cir.
2008); see Granite Rock Co. v. Int’l Bhd. of Teamsters, 561 U.S. 287, 297 (2010).2
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“An agreement to arbitrate a gateway issue is simply an additional, antecedent
agreement the party seeking arbitration asks the federal court to enforce, and the FAA
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In pertinent part, the Terms of Service provide that “any dispute, claim or
controversy arising out of or relating to this Agreement[’s]. . . enforcement,
interpretation or validity . . . will be settled by binding arbitration . . . .” Def.’s LR
56.1(a)(3) Stmt. ¶ 20. Certainly, a determination of whether Plaintiff’s TCPA claim
falls within the scope of the arbitration clause necessitates interpretation of the
agreement and, thus, is itself subject to arbitration. See Bergeron v. Monex Deposit
Co., No. SACV171968JVSDFMX, 2018 WL 3647017, at *2, 4 (C.D. Cal. July 9, 2018)
(holding scope-of-arbitration issue was delegated to arbitrator where agreement
required arbitration of disputes as to enforcement, interpretation, and validity of the
agreement); Lathan v. Uber Techs., Inc., 266 F. Supp. 3d 1170, 1173 (E.D. Wis. 2017)
(same); Cubria v. Uber Techs., Inc., 242 F. Supp. 3d 541, 549 (W.D. Tex. 2017) (same).
Conclusion
For the above-stated reasons, Defendant Uber’s summary judgment motion is
granted [56], and Johnson’s cross-motion for summary judgment is denied [75]. The
class claims are dismissed without prejudice, and this case is stayed pending the
resolution of arbitration proceedings.
IT IS SO ORDERED.
ENTERED 9/20/18
__________________________________
John Z. Lee
United States District Judge
operates on this additional arbitration agreement just as it does on any other.” Rent-ACenter, W., Inc. v. Jackson, 561 U.S. 63, 70 (2010).
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