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Bekele v. Lyft, Inc.

United States Court of Appeals, First Circuit

March 13, 2019

YILKAL BEKELE, Plaintiff, Appellant,
v.
LYFT, INC., Defendant, Appellee.

          APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS [Hon. F. Dennis Saylor, IV, U.S. District Judge]

          Shannon Liss-Riordan, with whom Adelaide H. Pagano and Lichten & Liss-Riordan, P.C. were on brief, for appellant.

          Michael Rubin and Altshuler Berzon LLP on brief for Labor Law Scholars, amici curiae.

          Evan M. Tager, with whom Archis A. Parasharami, Matthew A. Waring, and Mayer Brown LLP were on brief, for appellee.

          Bryan K. Weir, Thomas R. McCarthy, Cameron T. Norris, Consovoy McCarthy Park PLLC, Steven P. Lehotsky, Michael B. Schon, and U.S. Chamber Litigation Center on brief for Chamber of Commerce of the United States of America, amicus curiae.

          Before Lynch, Circuit Judge, Souter, [*] Associate Justice, and Stahl, Circuit Judge.

          LYNCH, Circuit Judge.

         This case is about the enforceability of an arbitration clause alleged to be unconscionable under Massachusetts law.

         Yilkal Bekele, the plaintiff, drove for Lyft, Inc., the defendant, starting in mid-2014. Bekele tapped "I accept" on his iPhone 4 when presented with Lyft's Terms of Service Agreement ("TOS Agreement"), which contains a provision requiring that all disputes between the parties be resolved by one-on-one arbitration. Bekele later brought a putative class action in Massachusetts Superior Court against Lyft alleging that the company misclassifies its drivers as independent contractors under that Commonwealth's wage law. After removing the case to federal court, Lyft moved to dismiss in favor of arbitration of Bekele's claim in his individual capacity, invoking the clause in the TOS Agreement that required arbitration and that precluded class, collective, or representative proceedings. Concluding that the parties had a valid and enforceable agreement to arbitrate, the district court granted the motion and dismissed the case in favor of individual arbitration. See Bekele v. Lyft, Inc., 199 F.Supp.3d 284, 314 (D. Mass. 2016). We affirm.

         I.

         A. Factual Background

         The following undisputed facts are drawn from the complaint and the parties' submissions to the district court. See, e.g., Justiniano v. Soc. Sec. Admin., 876 F.3d 14, 17 (1st Cir. 2017).

         Lyft operates a ride-hailing service. Customers use its mobile-phone application ("the App") to request rides. The App then matches each ride request with a Lyft driver in the area.

         Before Bekele started driving for Lyft in Boston in the summer of 2014, he downloaded the App on his iPhone 4 and completed the registration process that Lyft requires of customers and drivers before they use Lyft's service. When Bekele registered, users were presented, at one step, with a screen titled "Lyft Terms of Service," which displayed sixteen lines of text from the TOS Agreement in grey ink on a white background. The text explained, "[t]his following user agreement describes the terms and conditions on which Lyft, Inc. offers you access to the Lyft platform," and "[t]his Agreement is a legally binding agreement made between you . . . and Lyft, Inc." Beneath that text, a turquoise-colored "I accept" button appeared.

         The TOS Agreement's specific provisions were outlined in the text that followed these initial sixteen lines. Users could scroll through the entire text of the TOS Agreement on this screen, but scrolling was not required before accepting. Tapping "I accept" allowed the user to proceed to the next stage of the registration process. But a user who did not accept the terms could not finish registering. The sixth paragraph of the agreement explained this, as well as the process by which Lyft could modify the TOS Agreement:

IF YOU DO NOT AGREE TO BE BOUND BY THE TERMS AND CONDITIONS OF THIS AGREEMENT, PLEASE DO NOT USE OR ACCESS LYFT OR REGISTER FOR THE SERVICES PROVIDED ON LYFT. We may amend this Agreement at any time by posting the amended terms on the Lyft Platform. If We post amended terms on the Lyft platform, You may not use the Services without accepting them. Except as stated below, all amended terms shall automatically be effective after they are posted on the Lyft Platform. This Agreement may not be otherwise amended except in writing signed by You and Lyft.

         The arbitration clause appeared about two-thirds of the way through the TOS Agreement.[1] We reproduce the clause with its original bold, ...


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