Authored by: Ollie Lammers
According to Alison Frenkel of Reuters.com, Uber Technologies sought a preliminary injunction to avoid almost $92 million in case management and other fees from the American Arbitration Association. The $92 million would be going to about 31,000 arbitration demands by Uber Eats customers.
Frenkel reports that these customers allege the policy Uber Eats put into place temporarily in 2020 of waiving some delivery fees for Black-owned restaurants was racially discriminatory.
This decision against Uber marks the first time an appellate court has ruled on an arbitration defendant's direct challenge to the American Arbitration Association fees.
Companies like Uber will no longer be able to immediately counter sue the American Arbitration Association over fees as an effective defense strategy.
Uber claims the $92 million is an unreasonable fee for the 31,000 arbitration claims, stating all arbitration claims are legally the same. According to Frenkel, the company also claims during a preliminary injunction in October 2021 that the judge's ruling was "untethered to the record, ungrounded in the law, and riddled with clear errors."
The appeals court disagreed with Uber's claims. Frenkel states, "the state appeals court aligned with other judges who have been distinctly unsympathetic to companies facing enormous arbitration fees from mass arbitration demands."