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Ninth Circuit:
Uber’s Collective Action Waiver Does Not Operate to Bar Centralization Order
Opinion Says Panel on Multidistrict Litigation Has Wide Discretion to Order Consolidation, Cannot Be Stripped of Authority Through Private Contract
By a MetNews Staff Writer
The Ninth U.S. Circuit Court of Appeals held yesterday that Uber Technologies Inc.’s collective action waiver, found in its terms of use, will not operate to bar an order transferring 13 individual lawsuits, filed across 10 different districts—each accusing the company of failing to offer adequate safeguards against sexual assaults by drivers—to the Northern District of California for coordinated pretrial proceedings with similar ones filed in that court.
In an opinion authored by Circuit Judge Lucy H. Koh, and joined in by Circuit Judge Anthony D. Johnstone and Senior Circuit Judge M. Margaret McKeown, the court said that the statutory authority granted to the U.S. Judicial Panel on Multidistrict Litigation (“JPML”) to centralize claims cannot be overcome by private agreement.
At issue is 28 U.S.C. §1407, which provides:
“When civil actions involving one or more common questions of fact are pending in different districts, such actions may be transferred to any district for coordinated or consolidated pretrial proceedings. Such transfers shall be made by the judicial panel on multidistrict litigation authorized by this section upon its determination that transfers for such proceedings will be for the convenience of parties and witnesses and will promote the just and efficient conduct of such actions.”
Under subdivision (d), the panel is to consist of seven federal judges, each from different circuits, who are to be appointed by the U.S. chief justice.
JPML Order
On Oct. 4, 2023, the panel ordered the 13 matters filed in other jurisdictions to be “transferred to the Northern District of California and, with the consent of that court, assigned to [Senior Circuit Court Judge] Charles R. Breyer for coordinated or consolidated pretrial proceedings.”
At least nine other civil actions have been filed in the Northern District of California.
By the time of the order, the number of civil actions against Uber alleging driver sexual assaults had risen to 79 cases. The JPML considers these matters potential “tag-along” cases which, according to internal rules and procedures, may be transferred to the chosen court by the panel or upon the request of a party.
Uber, together with subsidiaries Rasier LLC and Rasier-CA LLA, filed a mandamus petition challenging the October order, arguing that the JPML improperly applied the statutory criteria and failed to give weight to its collective action waiver.
Rejecting both contentions, Koh noted that the JPML judges are appointed from district courts across the country and rely on decades of experience with handling multidistrict litigation proceedings. Under these circumstances, she concluded:
“It would be anomalous for a three-judge panel from a single circuit to override the judgment of such a body in all but the most extreme circumstances. Indeed, we are unaware of a single instance in the more than 50 years that the JPML has existed where an appellate court has reversed a JPML order granting centralization. Uber has not convinced us that we should be the first.”
Collective Action Waiver
Uber’s collective action waiver provides that claims must be brought and litigated “on an individual basis only” and specifies that “this precludes you from bringing claims as or participating in any kind of any class, collective, coordinated, consolidated, mass and/or representative or other kind of group, multi-plaintiff or joint action against Uber and no action brought by you may be consolidated or joined in any fashion with any other proceeding.”
The rideshare giant contends that these terms preclude centralization, arguing that the agreement is no different from other waivers courts routinely enforce.
Unpersuaded, Koh said:
“Where a federal statute vests a court with the power (or duty) to act of its own accord, a private agreement cannot bind the court and the agreement is entitled to only so much consideration as provided for by Congress.”
She noted that, under subdivision (e), a refusal to order centralization is unreviewable and opined that this makes clear that “centralization is not a matter of individual right” such that it can be waived by the parties. She concluded that §1407 “instead vests the JPML with a power to manage the federal docket by centralizing cases that is unfettered by private agreements.”
Koh explained that the statute created a mandatory cooperation procedure due to the Legislature’s concern that a “litigation explosion” could overwhelm federal courts. Given this background, she reasoned:
“This history underscores what is plain from the text of Section 1407: Parties may not opt out of Section 1407’s ‘mandatory’ procedure.”
The case is Uber Technologies Inc. v. USJPML, 23-3445.
The JPML consists of Senior U.S. District Court Judges Roger T. Benitez, of the Southern District of California, Matthew F Kennelly, of the Northern District of Illinois, and Dale A. Kimball, of the District of Utah,
U.S. District Court Judges Karen K. Caldwell, chair of the committee who hails from the Eastern District of Kentucky, Nathaniel Gordon, of the District of Massachusetts, David C. Norton, of the District of South Carolina, and Madeline Cox Arleo, of the District of New Jersey, fill the remaining appointed seats.
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