Massachusetts High Court Reverses, Says Uber Can Force Paralyzed Rider to Arbitrate

By | June 11, 2024

Uber can require that a passenger seriously injured in a crash involving an Uber driver go to arbitration over his $63 million damages claim without a trial, the highest court in Massachusetts has ruled, overturning a lower court.

The Massachusetts Supreme Judicial Court in a 5-1 ruling found that the transport company’s online blocking popup format on its app that matches riders with drivers creates an enforceable contract between Uber and riders that includes an arbitration clause.

Uber and the driver involved the cash contended that the app’s terms of use bound the injured rider William Good to pursue his negligence claims only through arbitration and they sought an order to compel him to submit to arbitration.

Good, who sued Uber and the driver after he was rendered a quadriplegic in a crash, had asserted that a contract requiring arbitration was not formed because he neither had reasonable notice of Uber’s terms of use nor had he manifested assent to the terms.

In 2022, a state trial court denied the motion to compel arbitration, finding that Uber’s online notice was insufficient to form a binding contract with Good.

Uber Liability While the Massachusetts high court affirmatively addressed the question of whether injured passenger William Good and Uber formed a contract requiring arbitration, the court stressed that it did not decide, as the dissent suggests, that Uber bears no “responsibility or liability” for the injuries Good suffered. The state’s Supreme Judicial Court noted that there are “well-founded concerns” regarding the fairness of certain terms of Uber’s comprehensive standard form contract, specifically, whether the provision that purports to limit Uber’s liability for personal injuries presents a “Hobson’s choice that is unconscionable, unenforceable, or voidable.” The majority opinion said it agrees that these are valid concerns that must be addressed in due time but they were not before it in this ruling. “Instead, as set forth supra, this case concerns the much more limited question of who will decide these and other important matters: a court of competent jurisdiction or an arbitrator,” the opinion states. Importantly, the court continued, an agreement to arbitrate is “severable from the remainder of the contract” and “unless the challenge is to the arbitration clause itself, the issue of the contract’s validity is considered by the arbitrator in the first instance.”
Uber and the driver appealed that decision, and the Supreme Judicial Court (SJC) has now overruled that 2022 motion denial. The SJC ruled that Good must submit to arbitration because the Uber interface satisfies its two elements of reasonable notice and reasonable assent.

Kauders Reasoning

In her 2022 ruling in favor of Good, Suffolk County Superior Court Justice Debra Squires-Lee had followed the 2021 Massachusetts Supreme Judicial ruling in Kauders v. Uber, which involved an Uber driver’s refusal to serve a blind person with a dog. In Kauders. the SJC introduced its two-pronged test: was there reasonable notice and reasonable assent? The SJC ruled against Uber in the Kauders case.

In the Kauders ruling, the state’s high court said that the fundamentals of an online contract should not be different from those of an ordinary contract. It also made it clear that there must be an offer and acceptance and that the party seeking to enforce the arbitration provision bears the burden of proving that the parties entered into an agreement to arbitrate disputes.

Uber Can’t Force Massachusetts Crash Victim to Arbitration

Applying the Kauders reasoning in the Good case, the Superior Court judge ruled that Uber’s popup format did not provide adequate notice of its extensive terms and conditions that include binding arbitration. She also faulted the Uber app for not requiring an affirmative action by a user to show assent to the terms and conditions.

Without those two elements—reasonable notice and reasonable assent — there is no contract between Uber and Good and thus there is no enforceable arbitration clause, the Superior Court judge concluded.

In its reversal in the Good case, the SJC opinion written by Justice Gabrielle R. Wolohojian follows the two-pronged Kauders analysis but reaches a different conclusion than the lower court. The high court’s majority was impressed with the way Uber presented its terms to Good and obtained his assent through an app with a blocking feature. It found this interface clearer and simpler than the one used in Kauders.

The popup interface prevented Good from continuing to use Uber’s services on his cell phone unless Good both clicked a checkbox indicating that he had “reviewed and agreed” to the terms and activated a button labeled “Confirm, ” further indicating his assent. This blocking interface included a large graphic image of a clipboard holding a document; near the bottom of the document was an “X” alongside a graphic of a pencil poised as if to sign a legal instrument.

The high court concluded that these and other features of Uber’s “clickwrap” contract formation process put Good on reasonable notice of Uber’s terms of use, one of which was the agreement to arbitrate disputes concerning the personal injuries he suffered.

The court further concluded that Good’s selection of the checkbox adjacent to the boldfaced text stating that he “agreed” to the terms and his activation of the “Confirm” button reasonably manifested his assent to the terms.

The court liked that Uber’s display clearly stated: “We’ve updated our terms” and “We encourage you to read our updated Terms in full” in text in a prominent typeface and a font size that was larger than any other shown on the screen. The link to the terms of use was not buried on a cluttered screen.

No Signal

Good argued that the language with the hyperlink saying that Uber had updated its terms did not signal that an important contract was behind the link. The SJC said the Uber’s use of the graphic of a document marked by an “X” alongside a pencil meaningfully conveyed that the user was being presented with a legal document to execute.

Good also contended that by presenting the blocking screen at the moment he intended to use Uber’s services to secure a ride, Uber failed to provide him with a meaningful opportunity to review the terms. The SJC disagreed, maintaining that the moment a user wants to use the services may be the time when the user is most likely to focus on the terms.

Good also argued that the interface must require the user to open or scroll through the terms of use for the interface to comply with the reasonable notice requirement. But the SJC said that arguments confused reasonable notice with actual notice, which is not required.

The high court noted even though Uber’s interface provided a clearly identifiable hyperlink to the terms of use document, Good chose not to read the terms of use document that was made readily accessible to him. But Good’s failure to read the document “does not detract from the reasonableness of the notice provided,” the court stated.

Dissenting Opinion

Justice Scott L. Kafker dissented, criticizing the majority for recognizing the reality that almost no one clicks on hyperlinks to review the terms of use and still finding this reasonable notice.

Kafker also argued that the language with the hyperlink that Uber’s terms have been updated does not adequately signal the “significance and scope” of the contractual document behind the link.

“The terms and conditions that Uber seeks to impose through the click of a box differ greatly from what a user would ordinarily expect in such a simple transaction,” the dissent argued, noting that the terms were wide ranging and provided that Uber was not responsible in any way for the ride services, even if they led to the death or serious injury due to the recklessness or negligence of the driver or Uber. The terms further provided that Uber drivers were not the agents or employees of Uber, and thus not Uber’s responsibility, and that all disputes arising out of the ride services were subject to arbitration.

Kafker also chided the court for not doing enough to bring contract law into the Internet age. He wrote that the justices have previously addressed but not resolved the problem that those contracting over the Internet do not open hyperlinks and review the terms. The common law, Kafker wrote, including the common law of contract, is not static; rather it evolves to take into account changing societal conditions, including technological change.

“Contracting over the Internet in the Twenty-first Century is different. Thus, the meaning of reasonable notice must adapt to the times,” he added.

Good, 31, was rendered a quadriplegic by the crash last April 30 close to 1 a.m. He suffered “devastating and debilitating injuries” including a severe spinal cord injury. He will remain a quadriplegic for life.

Good’s lawsuit accuses Uber of negligence in the hiring of the driver, who the complaint says had at least 20 driving citations on his driving record and had been required by the state to take a driver re-training course. Uber “knew or should have known” that the defendant driver posed an unreasonable risk to riders, as well as to other drivers, pedestrians and cyclists, the suit claims.

The suit also maintains that the driver was an employee of Uber and not an independent contractor as Uber claims.

Topics Massachusetts

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