This month, a three-justice panel of the California Court of Appeal affirmed a trial court's order denying Uber's motion to arbitrate claims brought by a Lyft driver who also drove for Uber.

In Smythe v. Uber Technologies, Inc. (Case No. A149891), the plaintiff, on behalf of a putative class of Lyft drivers who were allegedly sent on "wild goose chases to pick up nonexistent passengers," alleged that Uber engaged in a practice of creating fake Lyft accounts to misdirect Lyft drivers and discourage drivers from driving for Lyft. The complaint asserted causes of action for unfair business practices and intentional interference with prospective economic advantage.

Uber moved to compel arbitration because the named plaintiff also drove for Uber and had thus entered into agreements with Uber that contained arbitration provisions. The provisions called for drivers to arbitrate "any dispute arising out of or related to th[e] Agreement or termination of the Agreement" and were "intended to require arbitration of every claim or dispute that can be lawfully arbitrated, except for those claims and disputes which by the terms of th[e] Agreement [were] expressly excluded from the Arbitration Provision."

The trial court rejected Uber's argument, finding that the action was beyond the scope of the named plaintiff's arbitration agreement with Uber.

The Court of Appeal affirmed, holding that "it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute." The named plaintiff's claims, which were "premised on [his] activities driving for Lyft," had "nothing to do with his identity as a driver for Uber" and thus fell "patently beyond the scope" of his arbitration agreement with Uber. Uber had further argued that the named plaintiff's claims were within the scope of the agreement because of a clause that addressed advertising and marketing to attract new users to Uber. The court quickly rejected this argument, holding that Uber's alleged practice, "whether or not with the aim of increasing its own ridership, cannot plausibly be called advertising or marketing."

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