United States: Second Circuit Scraps District Court's Denial Of Uber's Motion To Compel Arbitration

On August 17, 2017, the Second Circuit Court of Appeals vacated a district court's denial of Uber's and Mr. Travis Kalanick's motions to compel arbitration in a case involving price-fixing accusations.  In Meyer v. Kalanick, No. 16-2750 (2d Cir. Aug. 17, 2017), the Second Circuit held, as a matter of law, that plaintiff Spencer Meyer received objectively reasonable notice of the terms of service and unambiguously assented by clicking "register" on his smartphone when he signed up to use Uber's services.  The Second Circuit also remanded for consideration of whether Uber and Mr. Kalanick waived the right to compel arbitration by defending the lawsuit.

This was a heavily watched case with amici support on both sides.  The foes of arbitration hoped to use Meyer to call into question the viability of all click-through protocols that many companies use for their terms and conditions, not just Uber.

Background of the Case.  In 2015, Mr. Meyer, on behalf of a putative class of Uber riders, filed an action against Mr. Kalanick, alleging that the Uber App allows drivers to fix prices amongst themselves, in violation of the Sherman Act, 15 U.S.C. § 1, and the Donnelly Act, N.Y. Gen. Bus. Law § 340.  Uber was subsequently joined as a defendant in 2016.  Uber and Mr. Kalanick filed motions to compel Meyer to arbitrate.  Judge Rakoff of the Southern District of New York denied the motions, concluding that Mr. Meyer did not have reasonably conspicuous notice of the terms of service and did not unambiguously manifest assent to the terms.  See Meyer v. Kalanick, 200 F. Supp. 3d 408, 420 (S.D.N.Y. 2016).  The district court did not reach Meyer's other defenses to arbitration, including whether defendants waived their right to arbitrate by actively participating in the litigation.

The District Court's Determinations Were Subject to De Novo Review.  Plaintiff argued that the Second Circuit was limited to clear-error review of the district court's findings and legal conclusions.  The Second Circuit disagreed, finding that it would review de novo the denial of a motion to compel arbitration.  While factual findings upon which a conclusion was based would be reviewed for clear error, the facts in Meyer were undisputed.

Beyond "Clickwrap" and "Browsewrap." The court discussed web-based contracts, noting that it had previously distinguished web-based contracts as either "clickwrap" or "browsewrap" agreements.  "Clickwrap" agreements, which courts routinely uphold, require a user to click an "I agree" box after being presented with the terms and conditions of use.  "Browsewrap" agreements, on the other hand, generally post terms and conditions on a website via a hyperlink at the bottom of the screen.  Because no affirmative action is required in "browsewrap" agreements, the determination of the validity of these agreements depends on whether the user has actual or constructive knowledge of the terms and conditions.  The Second Circuit noted, however, that not all interfaces would fit neatly into the "clickwrap" or "browsewrap" categories.  As such, classification of web-based contracts would not resolve the notice inquiry.

  The Parties Mutually Assented to the Agreement.  Under California law, the Second Circuit considered whether the undisputed facts established that there was: (1) reasonably conspicuous notice of the existence of contract terms; and (2) unambiguous manifestation of assent to those terms.  Analyzing Uber's agreement, the court found both requirements were established.

In analyzing the first requirement, the court considered "the perspective of a reasonably prudent smartphone user."  Looking at the interface at issue in the case, the court concluded that the design of the screen and language used rendered the notice provided reasonable as a matter of law.  First, the registration payment screen was uncluttered.  The text on that screen advised Uber users that "By creating an Uber account, you agree to the TERMS OF SERVICE & PRIVACY POLICY."  This text, along with a hyperlink to the terms of service, appeared directly below the buttons for registration.  Even more, the entire screen was visible without scrolling.  Finally, although the text was in a small font, its dark print contrasted with the bright white background, and the hyperlinks were in blue and underlined.

The court also found that the fact that the terms of service were available by hyperlink did not preclude a determination of reasonable notice because the hyperlinked text was reasonably conspicuous.  Additionally, the court disagreed with the district court's determination that the location of the arbitration clause within the terms of service was itself a "barrier to reasonable notice."  Accordingly, the Uber App provided reasonably conspicuous notice as a matter of law.

In analyzing the second requirement, the court found that although Meyer's assent to arbitration was not express, it was unambiguous in light of the objectively reasonable notice of the terms.  A reasonable user would know that, by clicking the registration button, he or she was agreeing to the terms and conditions accessible via the hyperlink.  Plaintiff argued that the fact that clicking the register button had two functions—creation of a user account and assent to the terms of service—rendered plaintiff's assent ambiguous.  The court disagreed.  The physical proximity of the notice  regarding the terms of service to the register button made clear to a user that the linked terms pertained to the action the user was about to take.

The court concluded that, as a matter of law, Meyer agreed to arbitrate his claims with Uber.

The District Court Would Decide the Issue of Waiver.  Plaintiff argued in the alternative that defendants waived their right to arbitrate by actively litigating the underlying lawsuit.  Although a defense of waiver would normally be decided by the arbitrator, the court found that, here, the district court could properly decide the question because defendants had participated in litigation.  As such, the court remanded the case to the district court to consider whether defendants had waived their right to arbitrate.

The court's decision signals what factors at least one Court of Appeal will consider in determining the validity of consent in hybrid agreements—those agreements that don't fall expressly into the "clickwrap" or "browsewrap" categories.  It also confirms the validity of the electronic registration process used by Uber and many other companies.

Request to amend its opinion denied.  On Tuesday, August 29, 2011, the Second Circuit denied Plaintiff's motion to have the Second Circuit amend its August 17, 2017 opinion.  Plaintiff requested that the Second Circuit include language in its opinion stating that the district court could consider the extent to which Plaintiff may have been unable to see Uber's Terms of Service hyperlink (an argument made by plaintiff in Metter v. Uber Technologies, Inc., Case No. 3:16-cv-06652-RS).  The Court denied the motion without prejudice to Plaintiff raising the issue in the district court in the first instance.

Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Morrison & Foerster LLP. All rights reserved

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement

    Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of www.mondaq.com

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at enquiries@mondaq.com.

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions