McPhail v. LYFT, INC.

Filing 13

REPORT AND RECOMMENDATIONS re 5 Motion to Remand to State Court filed by Jennifer McPhail. Signed by Judge Andrew W. Austin. (jk)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TEXAS
AUSTIN DIVISION
JENNIFER MCPHAIL

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LYFT, INC.

A-14-CA-829-LY

REPORT AND RECOMMENDATION
OF THE UNITED STATES MAGISTRATE JUDGE
TO:

THE HONORABLE LEE YEAKEL
UNITED STATES DISTRICT JUDGE
Before the Court are Plaintiff’s Motion to Remand (Dkt. No. 5); Lyft’s Response to

Plaintiff’s Motion to Remand (Dkt. No.6); and Plaintiff’s Reply (Dkt. No. 9). The undersigned
submits this Report and Recommendation to the United States District Court pursuant to 28 U.S.C.
§ 636(b)(1)(B), Federal Rule of Civil Procedure 72, and Rule 1(d) of Appendix C of the Local Rules
of the United States District Court for the Western District of Texas, Local Rules for the Assignment
of Duties to United States Magistrate Judges.
I. BACKGROUND
On July 24, 2014, Plaintiff Jennifer McPhail (“Plaintiff” or “McPhail”) filed suit against
Defendant Lyft, Inc., (“Defendant” or “Lyft”) in the 98th Judicial District Court of Travis County
alleging that Lyft failed to provide her an accessible cab or equivalent transportation service.
McPhail, an Austin resident, has a physical disability and uses a wheelchair for mobility. She is also
a member of ADAPT of Texas, a grass-roots disability rights organization made up primarily of
people with disabilities. Among other things, ADAPT has worked to ensure that transportation
services including urban, intercity and taxi transportation are accessible to people with disabilities.
Dkt. No. 1-3 at pp. 2-3. Lyft, a Delaware corporation with its principal place of business in San

Francisco, California, is a is a mobile-based ridesharing platform that matches people who need
rides with people who have cars. It is utilized in over 65 cities, including Austin. Lyft does not
provide transportation services and does not own any vehicles. The Lyft platform provides a means
to match drivers and riders. In Austin, the rider, in his or her sole discretion, may voluntarily elect
to make a suggested donation to the driver or no donation at all. Dkt. No. 1-4.
On July 15, 2014, McPhail used a cellphone application to contact Lyft for a ride. Dkt. No.
1-3 at p. 3. The vehicle that arrived was not wheelchair accessible. Id. McPhail alleges that Lyft
does not have a single wheelchair accessible vehicle operating in Austin. Id. In her Original
Petition filed in state court, McPhail alleges that the failure to accommodate her disability violates
Chapter 121 of the Texas Human Resource Code. TEX.HUM.RES. CODE § 121.003. The Original
Petition states,“Chapter 121 provides for a penalty of at least $300 to an aggrieved party for each
violation of the law . . . . There is no maximum to this penalty.” Id. at 7. McPhail also asks the
Court to declare that Lyft’s actions violate Title III of the the Americans with Disabilities Act and
Chapter 21, and requests a permanent injunction forcing Lyft to comply with both statutes. On
August 29, 2014, Lyft filed a notice of removal to federal district court based on federal question
jurisdiction under 28 U.S.C. §§ 1441, and diversity jurisdiction under 28 U.S.C. §1332. Dkt. No.
1. On that same day, McPhail filed her First Amended Petition with the state court deleting any
reference to Title III of the ADA. Dkt. No. 2-3. Asserting that it was unclear whether the First
Amended Petition was filed before or after the Notice of Removal, Lyft filed an Amended Notice
of Removal including the First Amended Petition. Dkt. No. 2.
In the motion before the Court, McPhail argues that the Court has neither federal question
nor diversity jurisdiction over this case. She argues that the live pleading should be considered the

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First Amended Petition, which excludes any reference to the ADA. She contends further that even
if the Original Petition is considered her live pleading, the references to the ADA there were
mistaken and are thus insufficient to raise a federal question. Regarding diversity jurisdiction, she
argues that the amount she is seeking in damages is less than $75,000, and no diversity jurisdiction
exists. Lyft responds that the live pleading is the Original Petition, as the Notice of Removal was
filed prior to the filing of the First Amended Petition, and federal question jurisdiction exists because
McPhail seeks relief in her Original Petition under Title III of the ADA. On the issue of diversity
jurisdiction, Lyft contends such jurisdiction exists because the parties are citizens of different states,
and the amount in controversy—when viewed from the costs Lyft would incur if the Plaintiff
prevailed—exceeds $75,000.
II. ANALYSIS
The Court was recently faced with a case presenting nearly identical facts. See Salovitz v.
Uber Tech., Inc., 2014 WL 5318031 (W.D. Tex., Oct. 16, 2014). Indeed, the firm representing the
plaintiff in that case is the same firm representing McPhail here. In that suit the plaintiff sued Uber
Technologies, Inc., another ride-sharing application, making the very same claims McPhail makes
here. Both that suit and this case were filed in the Travis County District Court on July 24, 2014.
As with this case, the Uber suit was removed on the basis of both federal question and diversity
jurisdiction. Like here, the petition in that case contained some stray references to the ADA. As
with the motion to remand here, in Uber the plaintiff’s counsel averred that the references to the
ADA were made in error, and that no claim under federal law was intended to be raised in the suit.
After examining the relevant law, the undersigned concluded in the Uber case that the
mistaken references to the ADA were insufficient to invoke the Court’s federal question jurisdiction,

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and noted that a number of other federal district courts had reached the same conclusion in similar
scenarios. Id. at *4. Here, the evidence that the ADA references were mistaken is even stronger
than in Uber, as McPhail’s attorneys attempted to remove the references to the ADA prior to
removal.1 Though it appears that Lyft is correct that the live pleading is the Original Petition, since
the case was removed prior to McPhail’s filing of her First Amended Petition, the mistaken inclusion
of the acronym “ADA” in the Prayer, and in her request for injunctive relief, is insufficient to raise
a federal question, for all of the reasons already detailed in Uber. Id.
In Uber, this Court also rejected the argument Lyft makes in support of its claim that there
is diversity jurisdiction over this case. In short, though Lyft concedes that McPhail has properly
limited her maximum recovery to less than $75,000, it argues that McPhail has failed to consider
the costs Lyft would incur if forced to comply with the injunctive relief McPhail seeks, which it
contends would push the amount in controversy far beyond $75,000. Uber made this same argument
in the prior case, relying on essentially the same body of law, and the undersigned concluded that
the costs of complying with any injunction granted could not be considered as part of the amount
in controversy analysis, because “[t]his measures the amount in controversy from the wrong
perspective . . . as it is be measured from the point of view of the plaintiff.” Id. at *6. Lyft correctly
recognizes that “the amount in controversy, in an action for declaratory or injunctive relief, is the

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Approximately an hour before the Notice of Removal was filed, McPhail notified Lyft’s
counsel of her intent to delete the ADA references by faxing Lyft’s counsel a copy of her First
Amended Petition. See Dkt. No. 8-2 (fax sent at 11:32 am on August 29, 2014); and Dkt. No. 1
(Notice of Removal filed at 12:27 pm on August 29, 2014). Lyft filed the Notice of Removal before
the Amended Petition was filed, however, and thus bases its federal question arguments on the
Original Petition. (Lyft subsequently filed an amended Notice of Removal, acknowledging its
receipt of the Amended Petition, and stating that it was including that information out of an
abundance of caution, as it was not clear whether or when the Amended Petition had been filed in
the state court.)
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value of the right to be protected or the extent of the injury to be prevented.” See, e.g., Farkas v.
GMAC Mortgage, L.L.C., 737 F.3d 338, 341 (5th Cir. 2013), cert. denied, 2014 WL 3890319 (2014).
But as McPhail notes, though Lyft acknowledges this, it “simply misapplies the standard.” See Dkt.
No. 9 at 6. Here, the “right to be protected” or the “injury to be prevented” is McPhail’s asserted
right not to be discriminated against. Lyft has no right at stake, nor does it have a potential injury
it is seeking to prevent. The cases Lyft cites where courts have placed a value on injunctive relief
by looking to the potential impact of the relief on the defendant are all inapposite, as they are cases
in which declaratory or injunctive relief was sought on contractual rights, or insurance policies.2
Conspicuously, Lyft fails to cite any cases where the plaintiff was seeking to assert a civil right, and
the court valued the amount in controversy based on what it would cost the defendant not to violate
that civil right. When the standard is applied properly, the amount in controversy here is limited to
the value of McPhail’s right not to be discriminated against, and she has properly limited her right
to recover for any such discrimination to an amount less than $75,000. Diversity jurisdiction is
therefore lacking.
In short, the issues raised in the motion to remand here are identical to those raised in the
Uber case. For all of the reasons stated above, and as explained in more detail in Salovitz v. Uber
Tech., Inc., 2014 WL 5318031 (W.D. Tex., Oct. 16, 2014), the Court will recommend to the district
judge that this case be remanded to the 98th Judicial District Court of Travis County, Texas.

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See, e.g., St. Paul Reinsurance Co. v. Greenberg, 134 F.3d 1250 (5th Cir. 1998) (insurance
policy dispute); Ray Mart, Inc. v. Stock Bldg. Supply of Tex., L.P., 435 F.Supp. 2d 578 (E.D. Tex.
2006) (contract dispute).
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III. RECOMMENDATION
The undersigned RECOMMENDS that the Court GRANT Plaintiff’s Motion to Remand
(Dkt. No. 5) and REMAND this case to the 98th Judicial District Court of Travis County Texas. In
addition, because remand is appropriate without considering the amended complaint, the undersigned
FURTHER RECOMMENDS that the Court DISMISS Plaintiff’s Opposed Motion for Leave to
Amend (Dkt. No. 8) as moot.
IV. WARNINGS
The parties may file objections to this Report and Recommendation. A party filing
objections must specifically identify those findings or recommendations to which objections are
being made. The District Court need not consider frivolous, conclusive, or general objections. See
Battle v. United States Parole Comm’n, 834 F.2d 419, 421 (5th Cir. 1987).
A party's failure to file written objections to the proposed findings and recommendations
contained in this Report within fourteen (14) days after the party is served with a copy of the Report
shall bar that party from de novo review by the District Court of the proposed findings and
recommendations in the Report and, except upon grounds of plain error, shall bar the party from
appellate review of unobjected-to proposed factual findings and legal conclusions accepted by the
District Court. See 28 U.S.C. § 636(b)(1)(c); Thomas v. Arn, 474 U.S. 140, 150-53, 106 S. Ct. 466,
472-74 (1985); Douglass v. United Servs. Auto. Ass’n, 79 F.3d 1415, 1428-29 (5th Cir. 1996) (en
banc).
To the extent that a party has not been served by the Clerk with this Report &
Recommendation electronically pursuant to the CM/ECF procedures of this District, the Clerk is

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directed to mail such party a copy of this Report and Recommendation by certified mail, return
receipt requested.
SIGNED this 25th day of November, 2014.

_____________________________________
ANDREW W. AUSTIN
UNITED STATES MAGISTRATE JUDGE

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