Yucesoy v. Uber Techs., Inc.

HAKAN YUCESOY, Plaintiff, v. UBER TECHNOLOGIES, INC., et al., Defendants.

Case No. 15-cv-00262-EMC

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA

February 9, 2016

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTION TO DISMISS

Docket No. 149

I. INTRODUCTION

Plaintiffs are former and current drivers who drove for Defendant Uber Technologies, Inc. in Massachusetts starting in 2012. Docket No. 185 (Third Amended Complaint) (TAC) at ¶¶ 5-9. Plaintiffs bring both Massachusetts state law and common law claims, alleging that Uber and individual Travis Kalanick misclassified drivers as independent contractors, and that Uber failed to remit to drivers the total proceeds of gratuities and pay required minimum wage and overtime. Id. at ¶ 4.

The instant motion to dismiss is the third in this case. The Court previously granted in part and denied in part Uber's motion to dismiss all but the First Amended Complaint's misclassification claim, ruling that "[w]ith the exception of the Tips Law, tortious interference with advantageous relations, and quantum meruit claims against Uber, all of Plaintiffs' remaining challenged claims are insufficiently pleaded." Docket No. 69 at 18 (Motion to Dismiss First Amended Complaint Order). The Court then granted in part and denied in part Uber's motion to dismiss all but the Second Amended Complaint's misclassification claim, finding that "[w]ith the exception of the quantum meruit claims against Uber and the independent contractor misclassification claim against Defendant Kalanick . . . all of Plaintiffs' remaining challengedclaims are insufficiently pleaded." Docket No. 132 at 10 (Motion to Dismiss Second Amended Complaint Order) (MTD SAC Ord.).

Plaintiffs filed the operative complaint on December 22, 2015.¹ The Third Amended Complaint alleges the following causes of action on behalf of a putative class of Uber drivers who operated in Massachusetts: (1) Independent Contractor Misclassification; (2) Violation of the Massachusetts Tips Law; (3) Tortious Interference with Advantageous Relations; (4) Breach of Contract; (5) Violation of the Massachusetts Minimum Wage Law; and (6) Violation of the Massachusetts Overtime Law. Uber now moves to dismiss Claims 2-6 for failure to state a claim. Docket No. 149 (Mot.).

Uber's motion to dismiss came on for hearing before the Court on February 3, 2016. For the reasons stated below, the Court GRANTS the motion to dismiss in part and DENIES in part.

II. DISCUSSION

Defendants move for a dismissal pursuant to Federal Rule of Civil Procedure 12(b)(6). Rule 12(b)(6) allows for dismissal based on a failure to state a claim for relief. A motion to dismiss based on this rule essentially challenges the legal sufficiency of the claims alleged. See Parks Sch. of Bus. v. Symington, 51 F.3d 1480, 1484 (9th Cir. 1995). In considering a Rule 12(b)(6) motion, a court must take all allegations of material fact as true and construe them in the light most favorable to the nonmoving party, although "conclusory allegations of law and unwarranted inferences are insufficient to avoid a Rule 12(b)(6) dismissal." Cousins v. Lockyer, 568 F.3d 1063, 1067 (9th Cir. 2009). While "a complaint need not contain detailed factual allegations . . . it must plead 'enough facts to state a claim of relief that is plausible on its face.'" Weber v. Dep't of Veterans Affairs, 521 F.3d 1061, 1065 (9th Cir. 2008) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liablefor the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009); see also Twombly, 550 U.S. at 556. However, "[t]he plausibility standard is not akin to a 'probability requirement,' but it asks for more than sheer possibility that a defendant acted unlawfully." Iqbal, 556 U.S. at 678.

A. Massachusetts Tips Law and Tortious Interference

The Court previously found that the Tips claim and Tortious Interference claim are subject to Rule 9(b)'s heightened pleading standard because it sounds in fraud. MTD SAC Ord. at 3. The Court then dismissed the claims, finding that they "lack[ed] the details required by Rule 9(b), including, e.g., allegations as to what the specific misrepresentations were, where they were made, and when they were made." Id.

Plaintiffs again allege that "Uber has stated to customers, on its website and in marketing materials, that a gratuity is included in the total cost of the car service and that there is no need to tip the driver." TAC at ¶ 16. The complaint also adds or restates the following allegations:

17. For example, up until the end of 2012, Uber's website included such statements as "There's no need to hand your driver any payment and the tip is included" and "Please thank your driver, but tip is already included." Beginning in 2013, Uber's website has stated that "there is no need to tip."

18. Even after the statements were apparently removed from Uber's website at the end of 2012 that tips are included in the fare, Uber has nevertheless continued to inform passengers through marketing materials that tips are included in the fare. For example, as recently as at least April 2015, Uber has sent promotional emails to customers, declaring that "payment is automatically charged to a credit card on file, with tip included."

19. In addition, at various times (and at least through the end of 2012), Uber's contracts with its customers have incorporated by reference the statements and representations made on its website regarding pricing, which includes such statements as the "tip is included" in the fare. For example, Uber's contracts with customers (at least through the end of 2012) contained such statements as: "The Company may change the fees for our Service or Software as we deem necessary for our business. We encourage you to check back at our website periodically if you are interested about how we charge for the Service of [sic] Software."

20. However, despite Uber's representations to customers that the fare includes a gratuity (and despite Uber's contracts with customers that incorporated its pricing information on its website, including the website statements that 'tip is included'), Uber drivers have not received the total proceeds of this gratuity.

Id. at ¶¶ 17-20.

The Court finds that Plaintiffs' allegations are sufficient at the pleading stage. Plaintiffs have alleged who has made the allegedly misleading statement (Uber), examples of what the misleading statement was ("There's no need to hand your driver any payment and the tip is included," "Please thank your driver, but tip is already included," "there's no need to tip," "payment is automatically charged to a credit card on file, with tip included"), time frames for when the misleading statements were each made ("up until the end of 2012," "beginning in 2013," "April 2015"), where the statements were made (on Uber's website or in promotional e-mails sent or drafted by Uber), and how the statements were misleading (Uber leads people to believe that tip is included, but Uber drivers do not receive the total proceeds of any such gratuity, in violation of the Massachusetts Tips law). This is sufficient to put Uber on notice of Plaintiffs' claims, such that Uber is able to defend itself and respond to the complaint.

Uber argues that these allegations do not satisfy Rule 9(b) for three reasons: (1) the allegations do not state where Uber made the statements, i.e., the specific webpage; (2) the allegations do not state when Uber made the statements, i.e., the specific day; and (3) Plaintiffs do not allege who was exposed to, or relied upon, Uber's alleged misrepresentations. See Docket No. 182 (Reply).

First, the Court finds that the cases cited by Uber do not support the proposition that Plaintiffs are required to identify the exact webpage that the allegedly misleading statement appear on. In Boris v. Wal-Mart Stores, Inc., the district court found that the complaint did not satisfy Rule 9(b) because the named plaintiff did not specify when he viewed Wal-Mart's website or when he relied on it in deciding to buy Equate Migraine. 35 F. Supp. 3d 1163, 1174 (C.D. Cal. 2014). The district court did not suggest that the claim was deficient because the complaint failed to identify the specific webpage that the allegedly misleading statement appeared on. Similarly, in Janney v. Mills, the plaintiffs alleged that advertising of certain Nature Valley products was deceptive because the products were labeled "natural" when they allegedly contained processed sweeteners. 944 F. Supp. 2d 806, 809 (N.D. Cal. 2013). However, the defendant's website and social media accounts did not make any representations that the Nature Valley products werenatural; instead, the plaintiff only alleged that the online media was "linked with the concept of natural" by featuring images of forests, mountains, and seascapes. Id. at 815. The district court thus dismissed the claims related to the website, as the complaint failed to identify any misrepresentations made in the online media, including what the false statements were, why they were false, where the statements were located, or which statements plaintiffs relied on. Id. at 818. Like Boris, the district court did not suggest that there was a failure to identify the specific webpage that the allegedly misleading statement was on.

Other courts have found that an allegation that the specific misleading statement was on the defendant's website was sufficient to satisfy Rule 9(b). E.g., Jones v. ConAgra Foods, Inc., 912 F. Supp. 2d 889, 902 (N.D. Cal. 2012) (finding that Rule 9(b) was satisfied and that "[t]he 'where' is ConAgra's package labels and website"). Thus, the Court rejects Uber's argument that Plaintiffs should be required to plead the specific webpage that the allegedly misleading statements appeared on.²

Second, the Court rejects...