Uber (UBER) successfully blocked a personal injury case, which involved one of its driver’s running a red light, by arguing that the plaintiffs had agreed to not file any lawsuit against company when they agreed to its terms of use.
On Sept. 20, a New Jersey court of appeals ruled that an arbitration provision in Uber’s terms is “valid and enforceable.”
Arbitration is form of conflict resolution in which a neutral third party listens to both sides and makes a binding decision. Many major companies include an arbitration clause in their terms.
John and Georgia McGnity, a couple from New Jersey, originally filed the lawsuit against the company in 2023, after they sustained major injuries while riding in an Uber.
In March 2022, the couple’s Uber driver ran a red light and, according to court documents, the crash caused Georgia to sustain “cervical and lumbar spine fractures, rib fractures, a protruding hernia, traumatic injuries to her abdominal wall, pelvic floor, and other physical injuries.”
John suffered “a fractured sternum and severe fractures to his left arm and wrist.”
Uber filed a motion to compel arbitration claiming that, when Georgia registered for Uber in 2015, she agreed to an arbitration agreement that waived her right to a court trial. Uber said Georgia then accepted updated terms in 2021 and 2022, both of which included arbitration clauses.
The couple argued that their daughter may have unintentionally accepted the most recent terms in 2022, when she used Georgia’s Uber Eats account to order a pizza.
A motion court initially agreed with the couple, ruling that Uber’s arbitration agreement “fail[ed] to clearly and unambiguously inform plaintiff of her waiver of the right to pursue her claims in a judicial forum.”
However, Uber appealed the ruling and was able to convince an appeals court the agreement was valid even if it was accepted by the couple’s daughter.
“Despite assertions to the contrary, the court concluded that the plaintiff herself — not her teenage daughter — agreed to Uber’s Terms of Use, including the arbitration agreement, on multiple occasions,” Uber said in an emailed statement to Quartz.
Disney (DIS) recently made a similar argument when it tried to get a wrongful death lawsuit dismissed, claiming that the plaintiff had agreed to an arbitration agreement when he signed up for a free trial of Disney+. However, the media conglomerate switched course and is no longer trying to get the case dismissed.
