Arbiter to Decide Whether Widow’s Wrongful Death Claims Against Uber Are Arbitrable

Mark Geller was killed when his Uber driver lost control of his vehicle and crashed. The driver was also killed. Mr. Geller’s widow, Gloria Sheridan Geller (Ms. Sheridan) sued Uber, alleging survival claims on behalf of Mr. Geller’s estate and her own claims for wrongful death. Both Mr. Geller and Ms. Sheridan used the Uber app, which provided Uber a basis to file a motion to compel arbitration, alleging that Mr. Geller’s estate and Ms. Sheridan were bound by Uber’s terms of service (ToS), which include an arbitration provision.

The trial court granted Uber’s motion to compel arbitration as to the estate. It denied Uber’s motion as to Ms. Geller’s individual claim, reasoning that the claim related to Mr. Geller’s agreement to Uber’s ToS, not Ms. Sheridan’s. Uber sought interlocutory review.

In Geller v. Uber Technologies, Inc., the Illinois appellate court sided with Uber. Because Uber’s ToS included a clause delegating all determinations regarding arbitrability to the arbiter, the Court granted Uber’s motion to compel arbitration with respect to all of Ms. Sheridan’s claims.

Mr. Sheridan first challenged Uber’s arbitration clause on unconscionability grounds. The territory is familiar, but the Court explains all the reasons why Uber’s arbitration provision is neither substantively nor procedurally unconscionable. It’s a nice review of how these things work. The arbitration provision is not procedurally unconscionable. The ToS provide notice up front that claims are subject to arbitration. The arbitration provision begins on the second page of the ToS. The three-page arbitration agreement is conspicuous and not unduly confusing.

I pause here to note a strenuous but futile objection. The Court notes that Ms. Sheridan is bound by these terms whether or not she read them. Good thing. She certainly did not read them. Perhaps she once read Uber’s terms when she first started using the app, but the terms have undoubtedly been updated multiple times since then. It is not reasonable to expect that an Uber user will re-read the terms each time they are updated or create a red-line version of the terms so that they can see what terms have changed. Life is short.

Moreover, a three-page arbitration agreement in a consumer contract is also extremely problematic. Here’s the current version. Read it for yourself and let me know if you are confused. Did you read it? If not, I don’t blame you. According to Roseanna Sommers, 99% of consumers think they have never entered into an arbitration agreement. Perhaps because it is three pages long and references things like class actions, mass actions, and batching, with which only lawyers are familiar — and only arbitration experts know about the latter two.

Ms. Sheridan’s claim for substantive unconscionability also fails. She objects that “the arbitration agreement deprives her of the right to seek judicial redress.” She might also have mentioned the loss of a right to a jury trial. Illinois law sees no problem in that: “Parties may contract away rights, even those of a constitutional or statutory nature.”

The Court concedes that Ms. Sheridan may have a good argument that she is not bound by her husband’s agreement with Uber in her capacity as administrator of her husband’s estate. She also may have a good argument that her agreement to arbitrate with Uber does not apply to a claim arising from her husband’s use of the app. But those are issues of arbitrability delegated to the arbiter.

I suspect that is right under our law. I’m not sure our law is right. In order for there to be a question of scope, there must be an arbitration agreement between the parties. There is no arbitration agreement between Ms. Sheridan and Uber as to her husband’s use of the app, so there is no issue to delegate to the arbiter. Vendors want to engage in unlimited arbitration-clause bootstrapping. Once they get you to agree to an arbitration agreement, they want that to apply to all transactions that you or your family has with the vendor or related entities. The move stretches ideas of contractual assent beyond the breaking point.

I also wonder if anybody has tackled the empirical question. When questions of arbitrability get delegated to the arbiter, how often does the arbiter conclude that the dispute is not within the scope of the arbitration agreement. The cynic will argue that the arbiters are incentivized to take claims because they only get paid if they take the claim. I wonder if that incentive still matters. Arbiters might be so swamped with work that they become indifferent to whether they take one case or the other. However, the arbitral bodies are volume businesses, and they might foster a culture in which the typical arbiter thinks everyone is better off in arbitration. If they overstep a bit, what’s the harm. If they make the wrong decision on scope, nobody is going to get sued.