A New York appeals court ruled this week that the ride-share giant must pay the costs to the American Arbitration Association (AAA), which is taking 31,000 claims against the race-based promotion, which users say violated civil rights law.
Uber’s terms of use provide that disputes with the company will be settled in an arbitration issued by the AAA. Under that provision, the conservative litigation boutique Consovoy McCarthy PLLC filed demands against the company representing thousands of customers.
Roberta Kaplan, the Democrat superlawyer and inaugural winner of the Washington Free Beacon‘s Bill Clinton Award for Feminist Achievement, is acting on behalf of Uber. Kaplan left in disgrace from the feminist group Time’s Up following revelations that she helped ex-governor Andrew Cuomo (D., N.Y.) smear female aides who accused him of sexual misconduct.
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Uber accused Consovoy McCarthy of masterminding an “extortionate scheme” to punish the company for its woke activism.
In a complaint filed in New York state court, the ride-share giant said the firm is exploiting a new California law that imposes harsh penalties on parties who stiff arbitrators like AAA the fees they’re owed. That law says parties who fail to pay arbiter costs lose the arbitration by default and face fines and contempt orders. Uber is subject to the law because it’s based in San Francisco.
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According to Uber’s telling, the firm’s idea was to overcome the company with arbitration demands, putting them on the hook for a sky-high bill from the AAA. Under California law, Uber must then pay the $91 million invoice or face defeat by default and other consequences.
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“It is a ransom orchestrated by politically motivated lawyers, who are manipulating the arbitral process to prop up baseless claims of ‘reverse discrimination,’” Uber’s complaint reads.
A New York appeals panel held that Uber was at fault. The company’s terms of service force customers into arbitration, a common strategy by big businesses who wish to strong-arm complainants in secret, friendly forums.
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“While Uber is trying to avoid paying the arbitration fees associated with 31,000 nearly identical cases, it made the business decision to preclude class, collective, or representative claims in its arbitration agreement with its consumers, and AAA’s fees are directly attributable to that decision,” the decision reads.
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Consovoy McCarthy represented former President Donald Trump’s dispute with congressional Democrats over subpoenas for his financial records. The firm is also behind a landmark lawsuit that accuses Harvard’s admissions office of bias against Asians.
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