Tuesday, August 18, 2015

Connecticut taxi companies' claims against Uber fail

Greenwich Taxi, Inc. v. Uber Technologies, Inc., 2015 WL 4774989, No. 14cv733 (D. Conn. Aug. 13, 2015
Plaintiffs sued Uber for violating the Lanham Act, the Connecticut Unfair Trade Practices Act (CUTPA), and RICO, as well as for intentional interference with contractual relationships. The court dismissed the amended complaint with leave to amend.
Plaintiffs alleged that Uber began taxicab and/or livery operations in Connecticut without complying with state laws and regulations.  Uber allegedly partners with plaintiffs’ drivers, each of “who[m] make[s] an illegal side deal with Uber to take its customers while simultaneously working a normal shift with his or her authorized company.”  Uber allegedly “misrepresents to customers its compliance with Connecticut laws and regulations, misrepresents its insurance coverage, misrepresents the safety of its drivers, misrepresents its affiliation with lawfully operating taxicab and livery companies, and misrepresents its fares.”
False advertising: the court noted that the pleading standard applicable is Rule 8, not Rule 9(b).  See John P. Villano Inc. v. CBS, Inc., 176 F.R.D. 130, 131 (S.D.N.Y.1997) (“No matter how parsed, a claim of false advertising under the Lanham Act ... is not identical to a claim of fraud. Fraud requires, not just the making of a statement known to be false, but also, inter alia, a specific intent to harm the victim and defraud him of his money or property.... By contrast, no fraudulent intent ... is required under 15 U.S.C. § 1125.”).
Under Dial A Car, Inc. v. Transp., Inc., 82 F.3d 484 (D.C.Cir.1996), violations of Connecticut transportation laws and regulations aren’t actionable as false advertising; given that it wasn’t clear whether state transportation laws applied to Uber, Uber’s representations that it complied with the law couldn’t be false or misleading.
As for other representations, they weren’t adequately pled to be false or misleading.  For example, the complaint didn’t sufficiently allege that Uber claimed to be a “ridesharing” service. Plaintiffs alleged that Uber falsely claimed to have “partner” drivers, but they didn’t plead what it meant to be a “partner” and what would make that claim false or misleading.  They further alleged that Uber does not regularly recheck insurance, but they didn’t allege that Uber represented to customers that it does so. Likewise, they pleaded that it is nearly impossible to collect on Uber’s liability insurance and that the Connecticut Insurance Department issued a consumer alert stating that Uber’s drivers may not be covered by their personal automobile insurance. But they didn’t plead that Uber represented to customers that Uber’s drivers are covered by their commercial or personal insurance.  Further, allegations that Uber’s user agreement allows it to use “surge” pricing when demand becomes “high” or “intense” and that “[t]he mechanism for determining [‘surge’ pricing] appears arbitrary and unpredictable, made solely at the discretion of [Uber]” didn’t support an inference that Uber made a representation to customers that its pricing was simple.
False association under §43(a): Plaintiffs failed to allege that they had recognizable trademarks on the cars driven by Uber “partners.”
RICO claims: dismissed.
CUTPA: Plaintiffs’ unfairness claims required some sort of violation of public policy, but it hadn’t yet been established that Uber’s services violated Connecticut law, and plaintiffs didn’t sufficiently allege anticompetitive, immoral, or otherwise unfair conduct.
Tortious interference with contractual relationships: This requires wrongful conduct such as
fraud, misrepresentation, intimidation or molestation.  Plaintiffs didn’t plead that Uber’s interference with the contractual relationships between the plaintiffs and their taxicab and livery drivers and between the plaintiffs and credit card processing companies was tortious. Wooing the drivers wasn’t inherently wrongful.

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