Erica Sorosky Talks About Enforceability of Choice of Law Provisions to Out of State Litigants

Erica Sorosky wrote an article for the September 15th issue of the Daily Journal focusing on the turn of events by the Northern District of California in its 22-page order granting a motion for judgment on the pleadings in O'Conner v. Uber Technologies Inc., CV13-3826 (N.D. Cal., filed Aug. 16, 2013).

She wrote that the court reversed its decision to allow a class action against Uber to move forward, saying that out-of-state class members cannot make allegations under California law - "[T]he Court now concludes that its earlier ruling was in error, and that the California statutes involved in this action do not apply extra-territorially."

The case was filed in 2013 by drivers from California, Georgia and Washington who participate in the Uber service, an app that gives consumers the ability to hail a participating driver on demand using their mobile phone. At issue in this litigation, among a sundry of other claims, is the applicability of a choice-of-law provision in the parties' licensing agreement to putative class members who reside and provide transportation services outside California. The agreement states, in relevant part, "This Agreement shall be governed by California law," and any actions "shall be subject to the exclusive jurisdiction of the state and federal courts located in the City and County of San Francisco, California."

In December 2013, pursuant to a motion to dismiss, the court considered and rejected an argument by Uber that out-of-state class members should not be able to pursue claims under various Labor Code statutes. Uber argued that a presumption exists in California against the extraterritorial application of California law. Citing Sullivan v. Oracle Corp., 51 Cal. 4th 1191 (2011), Uber contended that extraterritorial application of California's Labor Code statutes would be unlawful, "unless such intent is clearly expressed or reasonably inferred from the language of the statute, or the statute's purpose, subject matter or history."

Though the court seems to have raised more questions than answers, the concept that has been most elucidated by this ruling is the trajectory of where it is headed - the 9th Circuit.

 

 

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