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Saturday, September 21, 2019

Lyft settles proposed class action over toll charges after judge affirms arbitration agreement

By Sara McCleary | Dec 12, 2017

NEW YORK (Legal Newsline) – After receiving a positive ruling from a federal judge, riide share company Lyft has agreed to settle a lawsuit filed against it by a New York plaintiff who had sought class action certification for his suit over toll charges.

In a June 26 opinion, the court granted Lyft’s motion to compel arbitration. On Aug. 1, plaintiff Josh Applebaum and Lyft filed a stipulation of dismissal, agreeing to dismiss Applebaum’s individual claims with prejudice and those of the other class members without prejudice.

Applebaum had filed his case in the U.S. District Court for the Southern District of New York last year, alleging that Lyft overcharged customers by charging the full, non-discounted cash rate of tunnel and bridge tolls, rather than the discounted E-Z Pass rate that drivers actually pay. 

Applebaum claimed that Lyft misled consumers, making them believe they would only be charged the discounted rate. He sought reimbursement, disgorgement of profits, an injunction to stop the overcharging, attorneys’ fees, and special damages.

Though Applebaum sought a trial by jury, Lyft filed a motion to dismiss the case, or in the alternative, stay the action and compel arbitration as per its terms of use. 

The company argued that Applebaum had agreed to its Feb. 8, 2016, terms of service, which included a provision to arbitrate all disputes between himself and Lyft, by clicking a box confirming “I agree to Lyft’s terms of service” when signing up.

The court found that the presentation of the agreement - that is, that the user could click the box without opening or reading the agreement and Lyft had not made clear the importance of the agreement - meant that a reasonable consumer could not have been expected to be aware that they were accepting the arbitration agreement. 

Therefore, “the plaintiff cannot be bound by the arbitration provisions in that contract,” reads Judge John G. Koeltl’s June 26 decision.

Lyft was successful, however, in its argument that Applebaum had agreed to its updated Sept. 30, 2016, Terms of Service, “which were presented to him as a scrollwrap agreement,” according to Koeltl. 

This time, the screen shown to users stated explicitly “Before you can proceed you must read & accept the latest terms of service” and required users to click on a bar that read “I accept.”

The court further addressed Applebaum’s contention that his claims were outside the scope of the arbitration agreement. It pointed to agreement’s provision that called for all disputes about the arbitrability of an issue to be decided by the arbitrator.

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Lyft U.S. District Court for the Southern District of New York