Artur Zawada v. Uber Technologies ( 2018 )

NOT RECOMMENDED FOR PUBLICATION
File Name: 18a0133n.06
No. 17-1092
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
ARTUR ZAWADA, et al., )
FILED
Mar 14, 2018
)
DEBORAH S. HUNT, Clerk
Plaintiffs-Appellants, )
)
v. ) ON APPEAL FROM THE
) UNITED STATES DISTRICT
UBER TECHNOLOGIES, INC., et al., ) COURT FOR THE EASTERN
) DISTRICT OF MICHIGAN
Defendants-Appellees. )
)
)
BEFORE: BATCHELDER, GRIFFIN, and WHITE, Circuit Judges.
ALICE M. BATCHELDER, Circuit Judge. In this case, two Uber drivers attempted to
bring a class action against Uber, alleging, among other things, that Uber unlawfully
misclassified them as independent contractors instead of as employees, depriving them of fair
compensation. Because both Uber drivers had entered into arbitration agreements with Uber
containing class action waivers, the district court dismissed the action and compelled individual
arbitration. We AFFIRM.
I.
The Defendants-Appellees in this case are Uber Technologies, Inc. and Rasier, LLC, a
wholly-owned subsidiary of Uber Technologies, Inc. (collectively “Uber”). The Plaintiffs-
Appellants are two Michigan men, Artur Zawada and Nashat Farha (collectively “the
Plaintiffs”). Zawada was formerly an Uber driver, and Farha is currently an Uber driver.
No. 17-1092, Zawada v. Uber Technologies
Uber operates a smartphone application that facilitates on-demand transportation
services. Customers use the Uber app to request vehicle rides, and those requests are sent
through the app to locally-available Uber drivers who use their own vehicles to transport
customers. Customers pay their drivers through the Uber app, and Uber keeps part of the fare.
To become an Uber driver, prospective drivers must enter into a contract titled the
“Rasier Software Sublicense Online Services Agreement” (“the Agreement”). Within the
Agreement is an Arbitration Provision that includes a class action waiver. Uber drivers may opt
out of this provision if they wish to, and some drivers do. The Plaintiffs twice agreed to the
contract containing the Arbitration Provision, and twice did not opt out of the Arbitration
Provision.1
In April 2016, the Plaintiffs filed a purported class action against Uber on behalf of a
class of Uber drivers in Michigan. The Plaintiffs alleged that Uber unlawfully misclassified
them as independent contractors instead of as employees, depriving them of fair compensation.
Uber filed a motion to dismiss the complaint, to compel arbitration, and to strike class
allegations, which the district court granted. The Plaintiffs timely appealed.
II.
On appeal, the Plaintiffs argue that the Arbitration Provision is illegal and unenforceable
because the class action waiver contained in the Arbitration Provision violates the Plaintiffs’
rights under the National Labor Relations Act (“NLRA”). The National Labor Relations Board
(“NLRB”), as amicus curiae on behalf of the Plaintiffs, argues that class action waivers, even
1
Uber periodically modifies the Agreement. Two versions are relevant in this case: the November 2014 Agreement,
which the Plaintiffs agreed to when they first became Uber drivers, and the December 2015 Agreement, which the
Plaintiffs agreed to after Uber made a modification to the Agreement. Although there was some dispute in the
district court about which version of the Agreement controlled, the district court held that “the language that
operates to compel arbitration [in both versions] is identical or functionally identical.” Zawada v. Uber Techs., Inc.,
No. 16-cv-11334, 2016 WL 7439198, at *3 (E.D. Mich. Dec. 27, 2016). The Plaintiffs also concede that “[f]or
purposes of this appeal, the minor difference between the agreements are [sic] irrelevant.”
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those that include opt-out provisions, violate the NLRA. The NLRB takes no position on whether
Uber drivers are statutorily protected “employees” under the NLRA. Uber argues that we should
not consider the Plaintiffs’ arguments because they raise them for the first time on appeal.
Ordinarily, we “will not decide issues or claims not litigated before the district court.”
White v. Anchor Motor Freight, Inc., 899 F.2d 555, 559 (6th Cir. 1990). This is because we
“review the case presented to the district court rather than a better case fashioned after the district
court’s order.” Id. (citation omitted); see United States v. Universal Mgmt. Servs., Inc., 191 F.3d
750, 758–59 (6th Cir. 1999) (collecting cases). Although we have discretion to deviate from this
rule “in ‘exceptional cases or particular circumstances’ or when the rule would produce a ‘plain
miscarriage of justice,’” we exercise this discretion only “rarely.” Scottsdale Ins. Co. v. Flowers,
513 F.3d 546, 552 (6th Cir. 2008) (citation omitted).
We generally hold that a party forfeits any issue that it presented to the district court too
late for the issue actually to be litigated. See id. at 553; see also Lexicon, Inc. v. Safeco Ins. Co.
of Am., Inc., 436 F.3d 662, 676 (6th Cir. 2006) (Griffin, J., concurring). We also generally hold
that a party forfeits issues that it did not fully argue to the district court. See Bldg. Serv. Local 47
Cleaning Contractors Pension Plan v. Grandview Raceway, 46 F.3d 1392, 1399 (6th Cir. 1995)
(“vague references” that “fail to clearly present” an argument are not enough to “preserve an
issue for appellate review”).
The Plaintiffs did not mention the NLRA in their briefing before the district court, let
alone assert the argument they now make on appeal: that their NLRA collective action rights
were impinged by the class action waiver in the Arbitration Provision. Instead, “on the eve of
the hearing” on Uber’s motion to dismiss, compel arbitration, and strike the class allegations, the
Plaintiffs filed a “Notice of Supplemental Authority” citing a Seventh Circuit case which found
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that a similar arbitration agreement, but without an opt-out clause as here, violated the NLRA.
See Zawada, 2016 WL 7439198, at *8. In this “Notice,” the Plaintiffs provided only a single
paragraph summarizing the Seventh Circuit decision and made no attempt to develop the NLRA
argument or show how the Seventh Circuit’s decision applied to their case. The district court
declined to “deny [Uber’s] motion based on arguments that Plaintiffs could have developed in
their response brief.”2 Id. We affirm.
We hold that the Plaintiffs have forfeited the issue of whether the class action waiver
contained in the Arbitration Provision violated the NLRA. The Plaintiffs did not litigate that
issue before the district court. Instead, they waited until the eleventh hour to attempt to raise a
new argument, and even then, cited only a single case and provided no developed argument.
Plaintiffs “Notice” was insufficient to preserve the issue for appellate review. Finally, the
Plaintiffs have not argued to us that theirs is an exceptional case in which we must decide this
issue to prevent a plain miscarriage of justice.
The Plaintiffs have expressly waived the three arguments that they did present to the
district court about the validity and applicability of the Arbitration Provision, and we do not
consider those arguments.
III.
For the foregoing reasons, we AFFIRM the judgment of the district court.
2
The district court further noted that, even if it “were to consider this late filing, it would not change the result”
because the cited Seventh Circuit decision concerned an arbitration agreement without an opt-out provision and was
therefore distinguishable. Zawada, 2016 WL 7439198, at *8.
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