Capriole v. Uber Technologies, Inc. ( 2021 )

United States Court of Appeals
For the First Circuit
No. 20-1386
JOHN CAPRIOLE, individually and on behalf of others similarly
situated,
Plaintiff, Appellant,
v.
UBER TECHNOLOGIES, INC.; DARA KHOSROWSHAHI,
Defendants, Appellees.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Indira Talwani, U.S. District Judge]
Before
Lynch and Kayatta, Circuit Judges,
and McElroy,* District Judge.
Shannon Liss-Riordan, with whom Adelaide H. Pagano and
Lichten & Liss-Riordan, P.C. were on briefs for appellant.
Theane Evangelis, with whom Blaine H. Evanson, Heather
Richardson, Jillian N. London, Samuel Eckman, and Gibson, Dunn &
Crutcher LLP were on briefs for appellees.
James W. Simpson, Jr., and Law Offices of James W. Simpson,
Jr., P.C. on brief for Boston Independent Drivers Guild, Gig
Workers Rising, Mobile Workers Alliance, Rideshare Drivers United,
and We Drive Progress, amici curiae.
* Of the District of Rhode Island, sitting by designation.
March 23, 2021
LYNCH, Circuit Judge. Plaintiff John Capriole filed a
class-action complaint in the United States District Court for the
District of Massachusetts asserting jurisdiction under the Class
Action Fairness Act, 28 U.S.C. § 1332(d)(2), and alleging that
Uber Technologies, Inc. ("Uber") misclassified him and other
drivers as independent contractors rather than employees. He then
filed a motion for a preliminary injunction seeking to require
Uber to alter its classification and treat him and those similarly
situated as employees. After the district court denied Capriole's
motion for a preliminary injunction, he appealed to this court.
The district court then granted a prior motion to transfer the
case to the Northern District of California. The Northern District
of California court dismissed the case and entered final judgment.
That dismissal is pending before the Ninth Circuit Court of
Appeals.
This appeal concerns only the Massachusetts district
court's denial of Capriole's first preliminary injunction motion
and whether we have jurisdiction over the appeal. We dismiss the
appeal before us as we have no appellate jurisdiction.
I. Background
Uber owns a mobile phone application (the "app") through
which customers can request rides from one place to another. When
a customer requests a ride, the app notifies a nearby Uber driver
and the driver may accept or decline the request. If a driver
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declines the request, it is offered to another driver. The driver
who accepts the request meets the customer at his or her location.
The price of the ride is set by Uber and passengers do not select
their drivers.
When drivers sign up for the Uber app, they must accept
the "Technology Services Agreement" ("TSA"), which governs the
relationship between Uber and its drivers. The TSA includes an
arbitration agreement (the "Arbitration Provision") which states
that disputes arising out of the TSA may be resolved "only by an
arbitrator through final and binding arbitration on an individual
basis only." Drivers may opt out of the Arbitration Provision
within thirty days after signing up.
Capriole signed up to be a driver on March 27, 2016. He
did not opt out of the Arbitration Provision.
II. Procedural History
On September 12, 2019, Capriole filed a federal
complaint against Uber and its CEO alleging that Uber misclassified
its drivers as independent contractors instead of employees in
violation of the Massachusetts Wage Act, Mass. Gen. Laws ch. 149,
§ 148B. Capriole argued that drivers must be classified as
employees and paid and granted benefits as employees under
Massachusetts law.
A week later, on September 19, 2019, Capriole filed a
motion to preliminarily enjoin Uber from continuing to classify
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Uber drivers as independent contractors. Capriole made several
arguments as to why class-wide preliminary injunctive relief was
appropriate despite the Arbitration Provision. First, as to the
Arbitration Provision, Capriole argued that it was unenforceable
because Uber drivers are exempt from the Federal Arbitration Act
("FAA") and Massachusetts law does not allow enforcement of
arbitration clauses containing class action waivers where they are
not covered by the FAA. See Feeney v. Dell Inc., 908 N.E.2d 753,
768-69 (Mass. 2009) (abrogated in part by AT&T Mobility LLC v.
Concepcion, 563 U.S. 333, 339 (2011)). Capriole also argued that
even if his claims had to be arbitrated under the Arbitration
Provision, the district court had the power to issue preliminary
injunctive relief to protect him while the arbitration was ongoing.
Second, as to preliminary injunctive relief, Capriole
argued he sought "public" injunctive relief, and under California
law "agreements to arbitrate claims for public injunctive relief
under [certain statutes] are not enforceable." McGill v. Citibank,
N.A., 393 P.3d 85, 90 (Cal. 2017). Capriole argued that the
Massachusetts Supreme Judicial Court would follow California law
on this point.
On October 17, 2019, Uber filed a motion to compel
arbitration and a motion to transfer the case to the Northern
District of California on the grounds that a parallel
misclassification suit was ongoing in California and the TSA
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contained a forum selection clause specifying that any claims not
arbitrated would be litigated in the Northern District of
California. On March 19, 2020, Capriole filed an amended complaint
adding a new claim that Uber drivers were not being given paid
sick leave in violation of the Massachusetts Earned Sick Time Law,
Mass. Gen. Laws ch. 149, § 148C.
On March 20, 2020, the district court denied the pending
motion for a preliminary injunction on the ground that Capriole
had not made a showing of irreparable harm. Capriole v. Uber
Techs., Inc., No. 1:19-cv-11941-IT, 2020 WL 1323076, at *3 (D.
Mass. Mar. 20, 2020). It noted that Capriole had put in "no
evidence" in support of his claims that drivers will suffer
irreparable harm or cannot afford basic necessities. Id. at *2
n.5. As to the claim for public injunctive relief, the district
court concluded that the Massachusetts Wage Act did not authorize
private plaintiffs to seek public injunctive relief. Id. at *3.
Further, the court held that Capriole was not requesting a public
injunction because "[r]elief that has the primary purpose or effect
of redressing or preventing injury to an individual plaintiff --
or to a group of individuals similarly situated to the plaintiff
-- does not constitute public injunctive relief." Id. (quoting
McGill, 393 P.3d at 90). Capriole filed a timely notice of appeal
on March 30, 2020.
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On March 23, 2020, Capriole filed a second motion for
preliminary injunction based on his amended complaint. On March
31, the district court granted Uber's motion to transfer the case
to the Northern District of California. Capriole v. Uber Techs.,
Inc., No. 1:19-cv-11941-IT, 2020 WL 1536648, at *1 (D. Mass. Mar.
31, 2020). The district court did not resolve the motion to compel
arbitration or the second preliminary injunction motion before the
transfer.
The next day, on April 1, 2020, the Northern District of
California entered the case on its docket. On May 14, the Northern
District of California district court granted Uber's motion to
compel arbitration and denied Capriole's second motion for
preliminary injunction. Capriole v. Uber Techs., Inc., 460 F.
Supp. 3d 919, 934 (N.D. Cal. 2020). On May 24, it dismissed the
case and entered final judgment. Capriole appealed the decision
of the Northern District of California and the Ninth Circuit heard
argument on October 16, 2020.1
1 In dismissing the case, the district court held the
Arbitration Provision was enforceable because Uber drivers are not
"workers engaged in foreign or interstate commerce" under the FAA,
that Capriole was not entitled to a public injunction under
Massachusetts law, and that under Ninth Circuit precedent the
district court did not have the power to grant preliminary
injunctive relief to Capriole prior to arbitration. Capriole, 460
F. Supp. 3d at 927, 932-34. Those issues are before the Ninth
Circuit.
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III. Analysis
Uber argues that this appeal became moot when the
California district court entered final judgment compelling
arbitration and dismissing the case. We address the issue of
jurisdiction as presented by the parties.
We decide the jurisdictional question of mootness before
reaching the merits of a case. Town of Portsmouth v. Lewis, 813
F.3d 54, 58 (1st Cir. 2016). Under the mootness doctrine, "an
actual controversy must exist at all stages of the review, not
merely at the time the complaint is filed." Id. (quoting Am. Civ.
Liberties Union of Mass. v. U.S. Conf. of Cath. Bishops, 705 F.3d
44, 52 (1st Cir. 2013)). "A case is moot when the court cannot
give any 'effectual relief' to the potentially prevailing party."
Am. Civ. Liberties Union of Mass., 705 F.3d at 52 (quoting Horizon
Bank Tr. Co. v. Massachusetts, 391 F.3d 48, 53 (1st Cir. 2004)).
It has long been the law that an appeal from the denial
of a preliminary injunction motion becomes moot when final judgment
issues because the district court's denial of the motion merges
with the final judgment. See Shaffer v. Carter, 252 U.S. 37, 44
(1920) (abrogated on other grounds by Comptroller of Treasury of
Md. v. Wynne, 575 U.S. 542 (2015)) (dismissing an appeal from the
denial of a preliminary injunction motion because the denial was
"merged in the final decree"); Smith v. Ill. Bell Tel. Co., 270
U.S. 587, 588-89 (1926); Harper ex rel. Harper v. Poway Unified
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Sch. Dist., 549 U.S. 1262, 1262 (2007); Chaparro-Febus v. Int'l
Longshoremen Ass'n, Loc. 1575, 983 F.2d 325, 331 n.5 (1st Cir.
1992) ("Because the district court's denial of the preliminary
injunction was 'merged in' the final judgment dismissing the case,
plaintiffs' complaints regarding the preliminary injunction are
moot.").
We agree with Uber that upon entry of the judgment of
dismissal of Capriole's suit, the denial in Massachusetts of the
first preliminary injunction merged with the California court's
final judgment. As a result, we do not have jurisdiction to hear
this appeal.
The arguments to the contrary fail. Capriole first
argues that Uber conceded the First Circuit had retained
jurisdiction of the appeal after the case was transferred. He
cites only one case, Matrix Group Ltd. v. Rawlings Sporting Goods
Co., 378 F.3d 29, 32 (1st Cir. 2004), to argue that a court of
appeals does not lose jurisdiction over the appeal of a preliminary
injunction motion when the underlying case is transferred.
Capriole misapplies Matrix Group Ltd., which is easily
distinguishable and which concerned an entirely different factual
scenario. It was the entry of final judgment, not the transfer,
that mooted this appeal.
Capriole next argues that the transfer "severed" the
first request for a preliminary injunction and thus that the denial
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of the preliminary injunction motion did not merge with the final
judgment. But a motion for a preliminary injunction is not a
separate claim that can be severed from the underlying claim. See
Acevedo-Garci v. Monroig, 351 F.3d 547, 558-59 (1st Cir. 2003) ("A
severance occurs when a lawsuit is divided into two or more
separate and independent or distinct causes." (quoting 88 C.J.S.
Trial § 17 (2003)).
Capriole last argues that his appeal of the denial of
his request for a preliminary injunction cannot be moot because
there is "still a case and controversy, as Uber drivers in
Massachusetts . . . remain misclassified, and effective relief may
still be provided upon resolution of the Appeal." This argument
fails. The appeal is moot because this court cannot provide relief
as to the preliminary injunction motion, not because the underlying
dispute has been resolved.
The final judgment in California means that the
arbitrator, not us or another court, is to decide any claim for
relief in this case unless and only if the Ninth Circuit reverses.
IV. Conclusion
The appeal is dismissed for lack of jurisdiction.
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