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New York Federal Judge Upholds Arbitration Win for Uber in Price-Fixing Case
- Client News
- August 3, 2020
Practices
A federal district judge upheld an arbitration trial victory for Uber Technologies, Inc., ending a high-profile, long-running antitrust action brought on behalf of users of Uber’s ride-hailing app by a customer. Bill Isaacson of Paul, Weiss was lead trial counsel and argued the motion challenging the arbitration award. The case challenged the legality of Uber’s business model under the Sherman Antitrust Act and sought a nationwide injunction against surge pricing.
In his complaint, filed in 2015 in the Southern District of New York, a customer alleged that the Uber app constituted an illegal agreement between Uber and drivers to coordinate high “surge pricing” fares to charge prices set by an algorithm in the app. Uber successfully moved to compel arbitration under a mandatory arbitration clause. On Feb. 22, 2020, after a 2019 trial in an AAA arbitration before an arbitrator who was a former lawyer with the Antitrust Division of the Department of Justice, in February 2020, the arbitrator ruled in Uber’s favor.
The plaintiff then challenged the arbitration award in federal district court, arguing that a statement by the arbitrator about needing security if he ruled against Uber demonstrated bias. Judge Rakoff disagreed, noting both that the claimant had failed to raise any concern about the arbitrator’s comment during the arbitration, and that a party attempting to vacate an arbitration award has a very high burden of proof which was not met by what was apparently a joke by the arbitrator that echoed his many attempts at humor throughout the proceeding.
The Paul, Weiss team included litigation partner William Isaacson.