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Case: Cullinane v. Uber Tech. Inc. (2016)

In the case of Cullinane v. Uber Tech. Inc., 2016 WL 3751652 (D. Mass. July 11, 2017), U.S. district court judge Douglas Woodlock upheld a clause in the Uber EULA that requires arbitration and prohibits consumer class actions. Plaintiffs Rachel Cullinane, Jacqueline Nunez, Elizabeth Schaul, and Ross McDonagh brought this case on their behalf and on behalf of the class of similarly situated persons, accusing ride-sharing provider Uber of contract-related claims under Massachusetts law and violation of Massachusetts’ unfair trade practices statute (Mass. Gen. Laws Ch 93A). 2016 WL 3751652 at *1. Uber moved the court to dismiss the action and compel arbitration under the arbitration clause in the Uber “Terms & Conditions” (a EULA [LINK] within the meaning given to that term here at REUL Lab) and the Federal Arbitration Act (9 U.S.C. § 1).
The court described the consumer’s Uber-account creation process:
  • There are three steps or screens on the Uber mobile app, which all the plaintiffs used to create their accounts. Id. at *2.
  • The first screen collects email and phone number. Id.
  • The second screen collects name and photograph. Id.
  • The third screen requires the consumer to link a credit card or Paypal account to the Uber app to pay for rides. Id.
  • The court described the third screen this way: “Immediately below the credit card information input box, and above the keyboard, appear the words ‘By creating an Uber account, you agree to the Terms of Service & Privacy Policy’. The words ‘Terms of Service & Privacy Policy’ appear in bold white lettering on a black background, and are surrounded by a gray box, indicating a button. The other words are in gray lettering. If a user clicks the button that says ‘Terms of Service & Privacy Policy’, the Terms of Service then in effect are displayed on the phone.” Id. (internal citations omitted).
  • The consumer proceeds from the third screen by clicking a button with the word “Done” in the upper right-hand corner of the screen. Id. at *3. Though the consumer must fill out all the boxes on the screen before she can click “Done,” it does not appear from the court’s opinion that she must click on the terms and conditions button or view the terms and conditions in order to proceed, making this an instance of “sign-in-wrap” or “sign-up-wrap.” (See discussion in the summary of Berkson v. Gogo).
The Uber EULA required Uber and its users to resolve disputes via arbitration and prohibits class actions. Id. at *3.
According to Judge Woodluck, the standard for enforcing “adhesion contracts” under Massachusetts contract law boils down to this: “The basic inquiry as to enforceability boils down to basic contract theory of notice and informed assent with respect to the terms in question.” Id. at *5, citing Ajemian v. Yahoo!, Inc., 83 Mass. App. Ct. 565, 573-74, 987 N.E.2d 604, 611 (2013). The Ajemian standard in Massachusetts requires the party seeking to enforce an online agreement to show “reasonably conspicuous notice of the existence of contract terms and unambiguous manifestation of assent to those terms by consumers.” Id. at *6 (internal citations and quotations omitted). The court here cites the Second Circuit’s reasoning in Fteja v. Facebook, Inc., 841 F. Supp. 2d 829, 840 (S.D.N.Y. 2012) and its references to the Supreme Court’s decision in Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585, 111 S.Ct. 1522 (1991), though Judge Weinstein in Berkson argued that analogy was inapposite.
Here, the court concluded that “[t]he placement of the phrase ‘By creating an Uber account, you agree to the Terms of Service & Privacy Policy’ on the final screen of the account registration process is prominent enough to put a reasonable user on notice of the terms of the Agreement. Judge Woodluck expressly repudiated the reasoning of Judge Weinstein in Berkson with regard to reasonable notice. Id. at *7.
Finally, the court here concluded that the consumers had assented to the agreement:
The language surrounding the button leading to the Agreement is unambiguous in alerting the user that creating an account will bind her to the Agreement. And the word “Done,” although perhaps slightly less precise than “I accept,” or “I agree,” makes clear that by clicking the button the user has consummated account registration, the very process that the notification warns users will bind them to the Agreement.
Id. at *8.

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