Aaron Vilcek v. Uber Technologies, Inc.

United States Court of Appeals
For the Eighth Circuit
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No. 17-2724
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Aaron Vilcek; Douglas A. Uchendi; Jeffrey Hamilton; Robert Glynn
lllllllllllllllllllllPlaintiffs - Appellants
v.
Uber USA, LLC
lllllllllllllllllllllDefendant
Uber Technologies, Inc.
lllllllllllllllllllllDefendant - Appellee
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Appeal from United States District Court
for the Eastern District of Missouri - St. Louis
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Submitted: April 11, 2016
Filed: August 30, 2018
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Before BENTON, MELLOY, and GRASZ, Circuit Judges.
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BENTON, Circuit Judge.
Four taxicab drivers sued Uber Technologies, Inc., in Missouri state court,
individually and for a putative class. They alleged tortious interference with a valid
business expectancy and sought damages. After Uber removed the case, the district
court dismissed for failure to state a claim. Vilcek v. Uber USA, LLC, No.
4:15CV1900 HEA, 2016 WL 8674064, at *4 (E.D. Mo. Sept. 30, 2016). The drivers
appeal. Having jurisdiction under 28 U.S.C. § 1291, this court affirms.
I.
In September 2015, Uber began offering rides for hire in St. Louis.1 About two
months later, the drivers sued. The drivers are all licensed by the St. Louis
Metropolitan Taxicab Commission (MTC), and the class would be defined as all
drivers licensed by the MTC. The MTC was “created for the public purposes of
recognizing taxicab service as a public transportation system, improving the quality
of the system, and exercising primary authority over the provision of licensing,
control and regulations of taxicab services” in St. Louis. § 67.1804.2 It has the power
to “[a]dopt a taxicab code to license and regulate taxicab companies and individual
taxicabs, and to provide for the enforcement of such code . . . .” § 67.1808(8).
The MTC Code says, “No person shall operate a vehicle for hire in [St. Louis]
without first obtaining a MTC driver’s license . . . .” MTC, Vehicle for Hire Code
§ 401(A) (rev. 5/31/2017). A driver must have a valid Missouri “chauffer’s license”
to be eligible for a MTC license. § 401(B)(4). Prospective MTC drivers are subject
to a “background check.” § 401(B)(5). See § 67.1819 (requiring MTC to request
background checks). When Uber entered the St. Louis market, this background check
required “fingerprint identification” of drivers. Vehicle for Hire Code § 401(B)(5)
(rev. 8/22/2011). See § 67.1819 (requiring fingerprinting).
1
St. Louis, in this opinion, refers to both the city of St. Louis and St. Louis
County.
2
All statutory citations in the text are to RSMo 2016.
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The Amended Complaint alleges the following facts, which this court assumes
to be true, construing all reasonable inferences most favorably to the drivers. See Ray
v. ESPN, Inc., 783 F.3d 1140, 1142 (8th Cir. 2015). Uber’s services are
“indistinguishable from the incumbent taxicab services.” In September 2015, the
MTC “voted . . . to allow Uber to operate in St. Louis.” “The MTC directed,
however, that Uber drivers be fingerprinted and possess a Class E Missouri
chauffeur’s license, the same as all other taxicab drivers.” Uber immediately began
providing services in St. Louis. However, “with intentional . . . disregard for the
MTC’s authority and rules,” it “us[ed] drivers who do not comply with the [MTC
Code’s] licensing requirements.” Uber’s violation “continues to this day.”3 “A
significant portion of the rides provided by Uber in St. Louis . . . would have gone to
plaintiffs and the class but for Uber’s entry.” The drivers and other MTC
drivers—who previously had a “steady” business—saw “decreases in revenue of 30-
40%” resulting from a “decrease in passenger calls.”
The district court dismissed the Amended Complaint, reasoning that the taxicab
drivers had not alleged a valid business expectancy. This court reviews “de novo a
district court’s grant of a motion to dismiss under Federal Rule of Civil Procedure
12(b)(6),” and “may affirm the judgment below on any ground supported by the
record . . . .” Wartman v. United Food and Comm. Workers Local 653, 871 F.3d
638, 640 (8th Cir. 2017); Christiansen v. West Branch Cmty. Sch. Dist., 674 F.3d
927, 934 (8th Cir. 2012).
3
In August 2017, after the district court’s decision, Missouri established a new
regulatory framework for “transportation network companies,” including Uber. See
§§ 387.400-387.440 RSMo Supp. 2017. The drivers do not allege that Uber violated
the new regulatory framework. They seek damages only from September 2015 to
August 2017.
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II.
To state a claim for tortious interference with a business expectancy, the
taxicab drivers must properly allege: “(1) a valid business expectancy; (2)
defendant’s knowledge of the relationship; (3) a breach induced or caused by
defendant’s intentional interference; (4) absence of justification; and (5) damages.”
Stehno v. Sprint Spectrum, L.P., 186 S.W.3d 247, 250 (Mo. banc 2006). A valid
business expectancy is a “reasonable expectation of economic advantage or
commercial relations.” Sloan v. Bankers Life & Cas. Co., 1 S.W.3d 555, 565 (Mo.
App. 1999) (internal quotation marks omitted). “[M]ere hope” is not enough.
Stehno, 186 S.W.3d at 250. The expectancy must be “reasonable and valid under the
circumstances presented.” Western Blue Print Co., LLC v. Roberts, 367 S.W.3d 7,
19 (Mo. banc 2012).
The drivers allege that before Uber entered the St. Louis market, they expected
that the “public seeking ride-for-hire services” would continue to ride with MTC
drivers in steady numbers. The district court held this insufficient, partly because it
does not identify specific passengers. Vilcek, 2016 WL 8674064, at *3. The drivers
argue they need not identify specific passengers, citing Missouri cases. See, e.g., Bell
v. May Dept. Stores Co., 6 S.W.3d 871, 877 (Mo. banc 1999) (“valid credit
expectancy” exists where “plaintiff expect[s] to apply for credit” and has “a
reasonable chance of obtaining credit” (emphasis in original)); Carter v. St. John’s
Reg’l Med. Ctr., 88 S.W.3d 1, 13 (Mo. App. 2002) (plaintiff “did not have to plead
. . . a business relationship . . . ; proof of expectancy, i.e., proof of prospective
contractual relations, was enough.”). The taxicab drivers say their expectancy was
reasonable because the public had consistently sought rides for hire and—but for
Uber—had no alternative to MTC drivers.
This court need not decide whether this is a valid business expectancy, because
the drivers have not alleged the absence of justification. “Absence of justification
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refers to the absence of a legal right to justify actions taken.” Western Blue Print,
367 S.W.3d at 20. “If the defendant has a legitimate interest, economic or otherwise,
in the expectancy the plaintiff seeks to protect, then the plaintiff must show that the
defendant employed improper means in seeking to further only his or her own
interests.” Bishop & Assocs., LLC v. Ameren Corp., 520 S.W.3d 463, 472 (Mo. banc
2017). “Improper means are those that are independently wrongful, such as threats,
violence, trespass, defamation, misrepresentation of fact, restraint of trade, or any
other wrongful act recognized by statute or the common law.” Id.
Uber has a legitimate economic interest in the drivers’ expectation of
continuing to provide rides for hire to the public, because Uber and the drivers are
direct competitors in the ride-for-hire market. See Central Trust and Inv. Co. v.
Signalpoint Asset Mgmt., LLC, 422 S.W.3d 312, 324 (Mo. banc 2014) (“[The
plaintiff] concedes . . . that [the defendant] has a legitimate economic interest in [the
plaintiff’s] expectation of continuing to do business with its former clients because
the two companies are direct competitors.”). The issue is whether Uber used
improper means. Id. See Briner Elec. Co. v. Sachs Elec. Co., 680 S.W.2d 737, 743
(Mo. App. 1984) (competition is a legitimate economic interest and valid justification
for interference with a business expectancy as long as the defendant did not employ
improper means).
The drivers argue that Uber used improper means by disregarding MTC
licensing requirements in violation of the MTC Code and the statutes creating and
enabling the MTC, sections 67.1800-67.1822. They emphasize that improper means
include “any wrongful act recognized by statute.” Bishop, 520 S.W.3d at 472.
But Missouri does not allow private causes of action for damages based solely
on the violations of a statute unless the legislature intended the violations to be
privately actionable. See Dierkes v. Blue Cross and Blue Shield, 991 S.W.2d 662,
667-68 (Mo. banc 1999) (distinguishing claims based on a breach of defendant’s
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promise to comply with all applicable law, from claims “created solely by the
statute”); Egan v. St. Anthony’s Med. Ctr., 244 S.W.3d 169, 173 (Mo. banc 2008)
(affirming the general rule for actions for damages). This general rule applies even
if a theory of relief applies to “unlawful” acts or “violation[s] of a statute.” See
Greene v. Scheider, 372 S.W.3d 887, 890-91 (Mo. App. 2012) (no cause of action for
civil conspiracy—“agreement . . . to do an unlawful act”—based on violation of a
statute that creates no private cause of action); Imperial Premium Fin. v. Northland
Ins., 861 S.W.2d 596, 599 (Mo. App. 1993) (no cause of action for negligence per
se—“the violation of a statute . . . shown to be the proximate cause of
[]injury”—based on violation of a statute that creates no private cause of action);
Bradley v. Ray, 904 S.W.2d 302, 314 (Mo. App. 1995) (“Because this Court finds no
private cause of action can be implied under the []Act, . . . the alleged breach of the
Act also does not amount to negligence per se.”); Noss v. Abrams, 787 S.W.2d 834,
837-38 (Mo. App. 1990) (no cause of action for fraudulent concealment based on
violating a regulation requiring disclosure of information, where the legislature did
not authorize private causes of action and the regulation did not “purport to make the
violation fraudulent concealment”); Neighbors Against Large Swine Operations v.
Continental Grain Co., 901 S.W.2d 127, 132 (Mo. App. 1995) (although the
Declaratory Judgment Act says, “[a]ny person whose rights are affected by a statute
may obtain a declaration of rights,” “the []Act cannot serve as a basis for relief when
the party seeking to invoke [it] does not have a direct cause of action concerning the
matter,” because it would amount to an “end run around the lack of any private right
of action”).
Here, the drivers’ tortious interference claim is based solely on the violation
of the MTC Code and the statutes. They do not argue that Uber’s conduct was
improper for any other reason, and they seek no damages for the period after Missouri
changed its law. Thus, violation of MTC requirements can be a wrongful act
recognized by statute for purposes of tortious interference only if the legislature
intended to create a private cause of action for the violation.
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The statutes creating the MTC do not expressly create a private cause of action
for violation of MTC requirements. Instead, they empower the MTC to enact its
requirements in the MTC Code and to “provide for the enforcement of such code” by
“denying, suspending, or revoking of licenses, or [imposing] administrative penalties
not to exceed two hundred dollars.” §§ 67.1808(8); 67.1818. The MTC has not
purported to create any private causes of action and has established a system of
administrative penalties. See Vehicle For Hire Code § 1001 (rev. 5/31/2017).
“When the legislature has established other means of enforcing its statutes,
[this court] will not recognize a private civil action for a violation unless such appears
by clear implication to have been the legislative intent.” Dierkes, 991 S.W.2d at 667,
citing Shqeir v. Equifax, Inc., 636 S.W.2d 947, 949 (Mo. banc 1982) and R.L.
Nichols Ins., Inc. v. Home Ins. Co., 865 S.W.2d 665, 666 (Mo. banc 1993). There
is no clear implication here of legislative intent to create private causes of action. To
the contrary, section 67.1816(1) says, “All . . . enforcement of the taxicab code shall
rest exclusively with the [MTC].” (Emphasis added.)
True, “[w]hen a legislative provision protects a class of persons . . . but does
not provide a civil remedy . . . , the court may, if it determines that the remedy is
appropriate to further the purpose and ensure the effectiveness of the enactment,
accord to an injured member of the class a right of action.” American Eagle Waste
Indus., LLC v. St. Louis County, 379 S.W.3d 813, 830 (Mo. banc 2012) (emphasis
in original). But assuming there is a protected class here, this court may not imply
a private cause of action because the statutes provide a civil remedy—MTC
enforcement. “Moreover, while the ‘protected class’ theory . . . may be a viable factor
in determining a ‘clear implication’ of legislative intent, it does not, standing alone,
negate the implication of exclusivity created by the presence of an expressly stated
means of enforcement.” Johnson v. Kraft Gen. Foods, Inc., 885 S.W.2d 334, 336-37
(Mo. banc 1994). See Lafferty v. Rhudy, 878 S.W.2d 833, 835 (Mo. App. 1994)
(“[T]he general rule is that a statute which does not purport to establish a civil
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liability, but merely makes provision to secure the safety or welfare of the public as
an entity, is not subject to a construction establishing a civil liability.”). Here, there
is no indication of legislative intent to create any private causes of action. See
Neighbors Against, 901 S.W.2d at 130 (“Johnson made it clear that Missouri will
permit the implication of a private right of action in only the narrowest of
circumstances.”).
In creating and enabling the MTC, the legislature chose to pursue its goals
“[t]hrough [a] system of regulatory compliance and enforcement, not private lawsuits
. . . .” See Dierkes, 991 S.W.2d at 667. Thus, violation of MTC requirements is not
a wrongful act recognized by statute for purposes of tortious interference. Cf.
Philadelphia Taxi Ass’n v. Uber Techs., Inc., 218 F. Supp. 3d 389, 396 (E.D. Pa.
2016) (Uber’s violations of state and local regulations were not “wrongful means,”
because the violation was not “actionable on a basis independent of the interference
claim,” as required by Pennsylvania law), aff’d on other grounds, 886 F.3d 332 (3d
Cir. 2018).
The drivers believe that the Carter case is on point. There, the court found the
defendant’s statutory violation was a “wrongful act recognized by statute” even
though the plaintiff was not “within the class of persons sought to be protected by
[the statute].” Carter, 88 S.W.3d at 15. However, the court in Carter recognized that
the statute did allow a private cause of action for a class of protected individuals. Id.
at 14 n.6. Tortious interference allows a plaintiff to sue for wrongs committed against
a third party. See Bishop, 520 S.W.3d at 472 (improper means include “threats,
violence, . . . misrepresentation of fact”); Birdsong v. Bydalek, 953 S.W.2d 103, 111-
12 (Mo. App. 1997) (“when A imprisons or commits such a battery upon B that he
cannot perform his contract with C,” B “will have a tort claim against the interferer
for . . . imprisonment, battery, or property destruction,” while C will have a claim for
tortious interference). Because the violation in Carter was independently actionable
by the protected class, the plaintiff could sue for tortious interference. Contrary to
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Carter, the violation here of a statute that creates no private cause of action is not
actionable through tortious interference.4
The drivers also emphasize that, to avoid liability for tortious interference, a
defendant must have an “unqualified right” to perform the act. See, e.g., Bishop, 520
S.W.3d at 472. To be sure, all statutes, common law principles, contractual terms,
and other legal requirements are, in some sense, “qualifications” on the right to act.
But not all qualifications satisfy the absence of justification. See Stehno, 186 S.W.3d
at 252 n.5 (recognizing that defendant’s right to remove the plaintiff from a project
was subject to some contractual “qualifications,” but refusing to allow the plaintiff
to invoke those qualifications to show absence of justification because plaintiff was
not a party to the contract); Baldwin Props., Inc. v. Sharp, 949 S.W.2d 952, 957 (Mo.
App. 1997) (“Negligent acts are not ‘improper means’ for purposes of [tortious
interference].”). In the context of tortious interference, a defendant has an
unqualified right to interfere with a business expectancy if it has a legitimate
4
One Missouri Court of Appeals case implies that improper means may include
illegal acts that are not independently actionable. See Briner, 680 S.W.2d at 743
(“[W]rongful means would generally entail either an illegal act or an act that is
actionable in and of itself.”). See also Sales Resource, Inc. v. Alliance Foods, Inc.,
Nos. 4:08CV0732 TCM, 4:09CV0666 TCM, 2010 WL 5184943, at *17 (E.D. Mo.
Dec. 15, 2010) (“so long as [the defendant’s] conduct was not illegal or independently
actionable,” it “did not constitute ‘improper means’”). But see Global Control Sys.,
Inc. v. Luebbert, No. 4:14-CV-657-DGK, 2016 WL 502066, at *4 (W.D. Mo. Feb.
8, 2016) (conduct was not improper means where it “would not be actionable in and
of itself”). However, based on Dierkes—where the Missouri Supreme Court denied
private causes of action based solely on statutory violations not independently
actionable—and other Missouri Court of Appeals cases applying this principle to
civil conspiracy, negligence per se, and other causes of action, this court determines
that the Missouri Supreme Court would not follow Briner on this point. See National
Union Fire Ins. Co. of Pittsburgh v. Raczkowski, 764 F.3d 800, 803 (8th Cir. 2014)
(this court must “determine how the Missouri Supreme Court would construe the
law”).
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economic interest in the expectancy and does not use improper means. See Central
Trust, 422 S.W.3d at 324.
Because the drivers have not alleged absence of justification, the district court
properly dismissed the Amended Complaint.
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The judgment is affirmed.
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