Third Circuit Affirms District Court Decision to Deny Uber’s Arbitration Request

On Wednesday, Third Circuit Judges Cheryl Ann Krause and Peter J. Phipps and visiting Judge Wendy Beetlestone of the Eastern District of Pennsylvania issued an opinion affirming the Western District of Pennsylvania’s decision to deny Uber’s motion to compel arbitration in a case alleging that Uber “discriminated against individuals with mobility disabilities by not offering a ‘wheelchair accessible vehicle’ option in the Pittsburgh area.”

The judges said they denied the motion because the plaintiffs had not agreed to Uber’s Terms of Service, including its arbitration provision.

According to the opinion, the plaintiffs, who are “motorized-wheelchair users who live in the Pittsburgh area and the nonprofit Pittsburghers for Public Transit,” sued Uber alleging that the company acted in violation of Title III of the Americans with Disabilities Act. The plaintiffs asserted that if the accommodations were available, they would download the Uber app and use its service. 

In the district court, Uber moved to compel arbitration, asserting that although the plaintiffs did not register for an Uber account or accept its Terms of Use, “they were nevertheless bound by the mandatory arbitration clause of that agreement.” However, the district court denied Uber’s motion to compel arbitration.

According to Judge Krause, who issued the court’s opinion, Uber argued that the plaintiffs did not have standing in federal court for their discrimination suit.  The Judge said they “wound themselves in a Gordian knot: They do not have standing to sue unless they would agree to Uber’s Terms of Use, but those terms would require Plaintiffs to arbitrate their claim instead of litigating it in federal court.” 

According to the opinion, Uber asserted that the appellate panel must “reverse the District Court’s ruling that Plaintiffs have standing, a decision not generally reviewable on interlocutory appeal, as well as its ruling that Plaintiffs have no contractual obligation to arbitrate.” The Third Circuit contended that as established in Griswold v. Coventry First LLC, “on interlocutory appeal from the denial of a motion to compel arbitration … appellate jurisdiction is confined to review of that order.” Thus, the Third Circuit claimed that “we not only have no independent obligation to review nonappealable orders – even jurisdictional ones. We also have no power to do so unless we can exercise pendent appellate jurisdiction over them.” Consequently, the Third Circuit stated that as Griswold is still applicable, it will only review the district court’s arbitrability decision.

In considering arbitrability, the Third Circuit agreed with the district court’s findings. Specifically, the appellate panel stated that the “Plaintiffs – who have never accepted Uber’s terms, including its mandatory arbitration clause – cannot be equitably estopped from suing in court,” therefore, it affirms the district court’s decision to deny Uber’s motion to compel arbitration.

Uber is represented by Morgan, Lewis & Bockius LLP. The plaintiffs are represented by Carlson Lynch LLP and Disability Rights Advocates.

The Third Circuit’s decision comes after the District of Columbia District Court denied Uber’s motion to dismiss another disability discrimination lawsuit against Uber.