New York’s highest court is set to hear arguments on whether a personal-injury complaint against Uber Technologies was properly redirected to arbitration after the plaintiff, in a routine click of an email, inadvertently consented to change-of-service terms the company says it sent en masse while her lawsuit was pending.
In Wu v. Uber Technologies, Emily Wu gave her consent to arbitration, where matters are conducted in closed sessions, and can at times result in lower payouts than a jury determination, without the advice of a lawyer.
As such, Wu is asking the New York Court of Appeals to decide whether two lower courts properly determined an agreement to arbitrate exists, and whether ethics rules prohibit Uber from contacting her, and if the online transportation company should be sanctioned.
The matter is set for 40 minutes of arguments on Oct. 15, with Joshua D. Kelner of Kelner & Kelner representing Wu, while Michael R. Huston of Perkins Coie in Washington, D.C., is set to argue for San Francisco-based Uber.
A 2023 legal alert by the national firm Hinshaw & Culbertson noted the trial court’s “gutsy decision.”
At issue are the serious injuries Wu sustained on July 25, 2020, in Brooklyn, when an Uber driver let her out in the middle of a street, according to her lawsuit, which also named the driver as a defendant, saying he failed to let her out at a safe location near the sidewalk.
Wu filed suit in state Supreme Court on Nov. 19, 2020.
Two months later, Uber included Wu in what it says was a mass email notification to U.S. customers stating that, to continue using the product as of Jan. 18, 2021, customers had to agree to the series of changes to the terms of service, including arbitral provisions.
Kelner argues Wu didn’t agree to arbitration with Uber, as it failed to procure her legitimate assent to its terms. The attorney also said the agreement “was intended to prey on unwitting represented parties,” and he termed the company’s actions “unconscionable.”
However, he failed to convince the Appellate Division, First Department, whose unanimous September 2023 decision agreed with state Supreme Court Justice Veronica G. Hummel’s December 2022 order denying Wu’s motion to stay Uber’s demand for arbitration and to sanction the company.
“The court correctly determined that an agreement to arbitrate existed between plaintiff and Uber,” the appellate court’s decision read. “Uber established, prima facie, the existence of that agreement by submitting evidence showing that plaintiff electronically signed its Jan. 18, 2021 updated terms of use, which included an arbitration agreement, by clicking a checkbox and button that confirmed that she reviewed and consented to the terms.”
The appellate court added that the trial court “providently exercised its discretion in declining to sanction Uber for the sending of mass communication” while Wu’s lawsuit was pending.
Uber says that Wu’s arguments are precluded by the Federal Arbitration Act and applicable principles of New York law.
Also, the company claims it didn’t have notice of Wu’s lawsuit when it sent the mass email because her claim was sent to a regional office that had been closed in March 2020 due to the pandemic.
Uber says mail sent to its regional office wasn’t fully processed until it reopened in April 2021.
Meanwhile, the appeal has garnered considerable interest from legal advocates for online business and access-to-justice matters around the country.
An amicus brief by the Washington, D.C., nonprofit Public Justice organization asks the Court of Appeals for a reversal.
Written by Shelby Leighton, a staff attorney for its Access to Justice Project, the brief said that the Court of Appeals should “decline Uber’s invitation to approve its deceptive practice of contacting represented litigants to obtain waivers of fundamental rights, including the right to a jury trial, in an effort to stymy existing litigation against it.”
Conversely, attorneys from Mayer Brown in D.C. wrote a friend-of-court brief asking for affirmation on behalf of the U.S. Chamber of Commerce, The Business Council of New York State, and Netchoice, a national trade association of online businesses.
Their brief says that if Wu’s arguments for reversal are accepted, it “would transform the landscape of online commerce in New York, resulting in significant adverse consequences for businesses operating in New York.”
The Mayer Brown brief said Wu was “flat wrong” in characterizing Uber’s update to its standard contract terms as a “flagrant ethical violation.”
It points out that Uber provided advance notice by email informing users of the update to its terms, and the brief asserts that it’s unreasonable for Wu to expect that she would be carved out from any communications about contract terms sent en masse to Uber users.
Because “most businesses face litigation at all times, it is commonplace—and inevitable—for businesses to make generally-applicable revisions to their terms during the pendency of litigation,” the business entities state. “Yet under plaintiff’s proposed rule, every business would have to track and exclude every existing plaintiff in a pending lawsuit from routine contract updates.”
New York’s median compensatory damages awarded for personal-injury trials is approximately $288,000, and New York is considered a top state for awarding so-called nuclear verdicts worth $10 million or more, according to studies.