One Month After Removal, Drivers Want Uber-Lyft ‘Duopoly’ Suit Back in Calif. State Court

A motion filed earlier this week by three California-resident rideshare drivers argues that despite Uber’s removal of the case to federal court, it belongs in the San Francisco Superior Court where it was first brought. According to the motion, defendant Uber, with defendant Lyft’s consent, wrongly contends that the case contains “hidden federal claims so substantial that they transform this case into one arising under federal law.”

As previously reported, the suit claims that Uber and Lyft are a “duopoly” that dominates the app-based ride hailing industry, almost entirely displacing the traditional taxi industry in California. The filing claims that the companies treat their drivers unfairly through a number of coercive tactics, including fixed ride prices and withholding key information, such as where the drivers are actually agreeing to go when they accept a ride.

The complaint also says Uber and Lyft have “non-linear payment structures and minimum acceptance rates” designed to limit drivers’ mobility between platforms and suppress competition for their services. Too, the complaint faults the companies’ “opaque algorithms,” allegedly used “to make secret payments to drivers that commit to working for them.”

The action seeks relief on behalf of current and former drivers subjected to the companies’ anti-competitive and unfair practices and alleges six California law causes of action.

Uber removed the case to federal court, citing “substantial, disputed questions of federal antitrust law.” In this week’s motion, the plaintiffs argue that removal was baseless, first attacking Uber’s attempt to rely on the “artful pleading doctrine.” The drivers claim the artful pleading doctrine only applies in clear preemption situations, where a federal law “converts” an ordinary state common-law complaint into one stating a federal claim, which is not the case here per Supreme Court precedent. 

They further dispute that the Cartwright Act does not permit the recovery the plaintiffs seek, meaning their state law claims are masquerading as federal antitrust claims. “Federal jurisdiction depends on the legal theory that the plaintiff is actually advancing, not the legal theory Defendants wish the plaintiffs would advance,” the motion responds.

Lastly, the drivers differentiate cases cited by Uber illustrating instances where the district, the Northern District of California, has exercised federal question jurisdiction over what appear to be antitrust-related state-law claims. “These cases are all either distinguishable or mistaken. Binding authority requires remand,” the plaintiffs counter.

The case is before Judge Jeffrey S. White.

The plaintiffs and putative class are represented by Towards Justice and Edelson PC. Uber is represented by Paul Weiss LLP and Lyft by Munger, Tolles & Olson LLP.