In August, Disney found itself in a public-relations firestorm. Facing a wrongful-death lawsuit after a customer suffered an allergic reaction at a Disney World restaurant, the company had attempted to use the arbitration clause in the Disney+ terms of service to force the suit out of court and into arbitration, and the public reacted negatively. Disney ultimately withdrew its request for arbitration. 

Last week, Uber found itself in the news when a New Jersey appellate court held that the rideshare company’s arbitration clause was enforceable against a couple who were injured in an automobile accident when their Uber driver ran a red light. We often file motions to compel arbitration in consumer suits, so we thought we would provide three thoughts on this latest suit.

Three Thoughts

  1. This is not like the Disney case. Many articles have attempted to draw a parallel between the Uber lawsuit and Disney’s attempt to compel arbitration in the wrongful-death suit. For example, this article from NPR, or this article from Slate, which showed up in a Google search as: “Disney Abandoned a Brazen Legal Tactic. Uber is Doubling Down.” These articles highlight that the arbitration clause Uber was attempting to enforce was agreed to during the course of an Uber Eats order. But there is no clear distinction between Uber Rides and Uber Eats—they operate through the same app platform. So, unlike the Disney case, in which patronizing a restaurant was not directly associated with using Disney+, in the Uber case, the couple was using the app that required agreement to the arbitration clause.
  2. The Uber account holder had agreed to the terms of use multiple times. The court’s opinion notes that the account holder registered an Uber account in 2015, that she would have agreed to Uber’s terms of use during registration, and that “[t]hroughout [her] relationship with Uber, she has agreed to Uber’s Terms of Use, including its Arbitration Agreement.” In fact, the account holder did not dispute that she agreed to the terms of use Uber implemented in January 2021. Those January 2021 terms also included an arbitration clause, which included a statement that the user “acknowledge[s] and agree[s] that you and Uber are each waiving the right to a trial by jury.”  
  3. The injured couple can still recover damages in arbitration. Some of the articles, such as this one from The New York Times suggest, or contain quotations suggesting, that enforcement of the arbitration clause means that the couple will be unable to recover for their injuries. But arbitration is not a death knell to a plaintiff’s hope for recovering. It is merely an alternative, private forum for resolving the dispute before a neutral arbitrator. The arbitrator can award an injured party damages, and one of the selling points of arbitration is that the process should be completed quicker than a lawsuit that meanders through the courts.