Uber Misled Public, Say Cabbies Seeking False Ad Suit Revival
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Uber Misled Public, Say Cabbies Seeking False Ad Suit Revival

January 13, 2021

By Hannah Albarazi

Law360, San Francisco (January 13, 2021, 9:50 PM EST) — A group of taxi drivers urged a California state appeals court Wednesday to revive a Lanham Act lawsuit against Uber Technologies Inc., arguing the ride-hailing giant harmed their businesses by misleading consumers with false statements into thinking its services were safer than alternatives.

The taxi drivers urged the First Appellate District panel to overturn a trial court’s grant of summary judgment, arguing that Uber failed to provide evidence that it did not injure any of the three lead plaintiffs with false statements.

The cabbies’ attorney, Reed W. L. Marcy of Aiman-Smith & Marcy, told the judges that taxi rides cratered when Uber made false statements to consumers, which allows an inference “that consumers were misled and Uber’s gains were at least partly taxis’ loss.”

But Uber’s attorney, James R. Sigel of Morrison & Foerster LLP, said the taxi drivers must show evidence of causation in order to prove their Lanham Act claim. Instead, he said, the drivers “ask this court to just assume away” that requirement.

The taxi drivers failed to show any evidence of proximate causation, Sigel told the court, saying that instead they submitted “unsupported speculation” regarding chains of causation, as well as online news articles and an expert report that disclaims any conclusions on causation. Sigel said the trial court did not commit an abuse of discretion with its exclusion of evidence and “correctly concluded that none of plaintiffs’ evidence created a triable issue of fact.”

The oral arguments Wednesday came more than two years after the trial court judge ruled the taxi drivers couldn’t prove their loss of business resulted from Uber’s false statements, rather than mere competition.

Taxi drivers Benedict Ezeokoli, Zine Dine Sidi Salah and Leon Slomovic launched their putative class action in 2014, accusing Uber of falsely representing that its service is safer than alternatives, that Uber riders do not have to tip their drivers, and that Uber can pick up and drop off passengers at certain airports, even when the company did not have legal authorization to do so.

As a result of the alleged misrepresentations, the taxi drivers claim that they had to work longer hours to earn the same revenues and that it became harder for them to get customers. They alleged false advertising under the federal Lanham Act and sought monetary damages.

Uber moved for summary judgment, arguing that the taxi drivers could not prove that Uber’s ads harmed their business because few if any passengers saw the ads at issue. But the taxi drivers pushed back, claiming that they can measure damages using survey data and that there has been a decrease in taxi services since Uber entered the market. The drivers also argued that Uber explicitly compared its service in ads to other forms of transportation.

In October 2018, without holding a hearing, Alameda Superior Court Judge Ioana Petrou, who is now a justice for California’s First Appellate District, held that the cabbies’ limited testimony on the cause of their injuries amounted to mere speculation. The judge rejected the taxi drivers’ arguments, finding that the drivers failed to show evidence that Uber’s riders would have otherwise taken a taxi and not a Lyft, public transportation, a shuttle, a rental car or some other form of available transportation.

The judge granted Uber’s bid for summary judgment and its request to strike news articles and certain testimony submitted by the drivers as evidence that their business has been harmed by Uber. She also denied the drivers’ class certification bid, finding the arguments were mooted by her ruling.

Counsel for the taxi drivers appealed the ruling.

Following Wednesday’s oral arguments, the taxi drivers’ attorney told Law360 they believe the appellate court will “find that customers were likely to have been deceived by Uber’s false statements, causing substantial harm in the form of lost ridership and devaluation of the taxi drivers’ business.”

“We look forward to returning to the trial court, certifying the class, and obtaining relief for our clients and all the drivers in the class,” Marcy told Law360.

An Uber representative declined Law360’s request for comment.

Justices Peter J. Siggins, Carin T. Fujisaki and Teri L. Jackson sat on the panel for the First Appellate District.

The taxi drivers are represented by Reed W. L. Marcy of Aiman-Smith & Marcy.

Uber is represented by James R. Sigel of Morrison & Foerster LLP.

The case is Benedict Ezeokoli et al. v. Uber Technologies Inc., case number A156445, in Court of Appeal of the State of California, First Appellate District.

–Additional reporting by Dorothy Atkins. Editing by Breda Lund.