Kauders v. Uber Technologies, Inc.

159 N.E.3d 1033 (2021)

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Nature of the Case

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Facts

D describes itself as a technology company that allows its users to request transportation services from drivers in their geographic area through its app. Before they can request trips, users must register with D. Users can register by means of their cellular telephones by using the app. The registration process involved three steps, with each step involving a separate screen. The first screen was titled “CREATE AN ACCOUNT.” The user entered her email, a mobile number, and a password. Once entered, a NEXT button was enabled for the user to press. The second screen was titled “CREATE A PROFILE.” The user was required to enter a first and last name and had the option to add a photograph. A button in the top right corner that stated “NEXT” was enabled once the user entered the required information. The third screen was titled “LINK PAYMENT.” The user was required to enter a credit card number to invoke the “PayPal” method of payment. At the bottom of the screen, there was white text that stated, “By creating an Uber account, you agree to the Terms & Conditions and Privacy Policy.” This text was oddly divided into two parts. The first part of the sentence, which informed the user, “By creating an Uber account, you agree to the,” was far less prominently displayed than the words “Terms & Conditions and Privacy Policy,” which followed. The second part of the sentence - “Terms & Conditions and Privacy Policy” - was in a rectangular box and in boldface font. This presentation was supposed to indicate that the box was a clickable hyperlink. If a user clicked this box, the user would be taken to a screen that contained other clickable buttons, labeled “Terms & Conditions” and “Privacy Policy.” Once at this linked screen, if the user clicked the “Terms & Conditions” button, the terms and conditions would appear on the screen. If the user interacted with the rectangular field at the top of the third screen, a number keypad appeared in the bottom half of the screen. The user could use the number keypad to enter credit card information. Once this keypad appeared, the white text and the link from the bottom of the screen moved to the middle of the screen between the rectangular box and the keypad. After a user filled in the credit card information, a button labeled “DONE” became clickable in the top right corner. Once the user clicked “DONE,” the user completed the account creation process. P registered through the app on June 27, 2014. He used a cellular telephone to do so. D can amend the terms and conditions whenever it wants and without notice to the users that have already agreed to them. The user has the responsibility to determine if the terms and conditions have changed. There is a broad limitation of liability provision. As the judge below recognized, this provision “totally extinguishes any possible remedy” against D. D has a clause in capital letters to separate itself entirely from the drivers providing the ride services. Its terms and conditions also include a strict no-refund policy. They disclaim all warranties “to the maximum extent permitted by law,” including any warranties as to the “reliability, safety, timeliness, [or] quality” of any services D provides. There is a broad indemnification provision, under which a user must indemnify D for all costs D incurs arising out of a user's “violation or breach of any term of this Agreement or any applicable law or regulation,” “violation of any rights of any third party,” or the “use or misuse of the Application or Service.” The “Dispute Resolution” section appears near the end of the terms and conditions and provides for binding arbitration. If D makes changes to the dispute resolution section, the user has thirty days in which to object to the changes. P alleged that D unlawfully discriminated against P on the basis that he is blind and accompanied by a guide dog. D moved to compel arbitration. P claimed they were not enforceable because P neither received adequate notice of the existence of the terms and conditions nor assented to them. The judge granted D's motion to compel, omitting any discussion or analysis of the contract formation issue. The case proceeded to arbitration and the arbitrator issued the decision. The arbitrator, relying on agency principles, ruled for D on all of the claims because the drivers were independent contractors, not employees of D, and therefore, D was not liable for the drivers' actions. On June 25, 2018, an appeals court held that the same registration process at issue here did not create an enforceable contract under Massachusetts law between D and its users as to the terms and conditions. It held that D failed to provide users with adequate notice of the existence of the terms and the hyperlink to those terms. On September 4, 2018, D filed a motion to confirm the arbitrator's award. P reiterated the prior argument against arbitration and raised the court decision against D's contract for the first time. P filed a motion for reconsideration seeking to have the court vacate the July 2017 order compelling arbitration. The judge vacated the earlier order compelling arbitration on the ground that there was no enforceable agreement to arbitrate. D appealed.