Supreme Judicial Court for the Commonwealth Full Court: SJC-12883 Filed: 8/20/2020 4:39 PM COMMONWEALTH OF MASSACHUSETTS SUPREME JUDICIAL COURT NO. SJC-12883 Appeals Court No. 2019-P-0622 __________________________________________________ CHRISTOPHER P. KAUDERS and HANNAH KAUDERS, Appellees, v. UBER TECHNOLOGIES, INC. and RAISER LLC, Appellants. __________________________________________________ ON APPEAL FROM SUFFOLK SUPERIOR COURT __________________________________________________ BRIEF OF THE CHAMBER OF COMMERCE OF THE UNITED STATES OF AMERICA AS AMICUS CURIAE SUPPORTING APPELLANTS __________________________________________________ U.S. CHAMBER LITIGATION CENTER Steven P. Lehotsky, BBO # 665908 1615 H Street NW Washington, DC 20062 Tel.: (202) 463-5337 [email protected] MAYER BROWN LLP Archis A. Parasharami (pro hac vice motion pending) 1999 K Street NW Washington, DC 20006 Tel.: (202) 263-3000 [email protected] Dated: August 20, 2020 1 RULE 1:21 CORPORATE DISCLOSURE STATEMENT The Chamber of Commerce of the United States of America (the “Chamber”) is a non-profit, tax-exempt organization incorporated in the District of Columbia. The Chamber has no parent corporation, and no publicly held company has 10% or greater ownership in the Chamber. 2 TABLE OF CONTENTS Page RULE 1:21 CORPORATE DISCLOSURE STATEMENT..............2 TABLE OF AUTHORITIES..................................4 I. INTEREST OF AMICUS CURIAE........................7 II. STATEMENT OF THE ISSUES..........................9 III. INTRODUCTION.....................................9 IV. ARGUMENT........................................13 A. The Mobile Sign-Up Process At Issue Creates An Enforceable Online Contract.....13 B. Cullinane, And By Extension The Superior Court’s Decision, Cannot Be Squared With Ordinary Contract Formation Principles.......................19 C. Cullinane’s Approach To Online Contract Formation Deprives Businesses Of Needed Clarity And Predictability In A Critically Important Sector Of The Nation’s Economy...........................23 CONCLUSION...........................................26 CERTIFICATE OF COMPLIANCE............................28 3 TABLE OF AUTHORITIES Page Cases Adelson v. Harris, 973 F. Supp. 2d 467 (S.D.N.Y. 2013) ...............16 Ajemian v. Yahoo!, Inc., 83 Mass. App. Ct. 565 (2013) ..................passim Allied-Bruce Terminix Cos. v. Dobson, 513 U.S. 265 (1995) ...............................26 Alpha One v. NYNEX Info. Resources Co., 2 Mass. L. Rptr. 568, 1994 WL 879488 (Super. Ct. May 23, 1994) .........................15 Beture v. Samsung Electronics Am., Inc., 2018 WL 4259845 (D.N.J. July 18, 2018) ............18 Binder v. Aetna Life Ins. Co., 75 Cal. App. 4th 832 (1999) .......................13 Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585 (1991) ...............................16 Circuit City Stores, Inc. v. Adams, 532 U.S. 105 (2001) ...............................26 Cullinane v. Uber Techs., Inc., 893 F.3d 53 (1st Cir. 2018) ...................passim Feld v. Postmates, Inc., 442 F. Supp. 3d 825(S.D.N.Y. 2020) ................18 Fteja v. Facebook, Inc., 841 F. Supp. 2d 829 (S.D.N.Y. 2012) ...15, 16, 17, 18 Hancock v. Am. Tel. & Tel. Co., 701 F.3d 1248 (10th Cir. 2012) ....................19 Meyer v. Uber Techs., Inc., 868 F.3d 66 (2d Cir. 2017) ....................passim 4 Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1 (1983) .................................26 Preston v. Ferrer, 552 U.S. 346 (2008) ...............................26 Register.com, Inc. v. Verio, Inc., 356 F.3d 393 (2d Cir. 2004) .......................13 Riley v. California, 573 U.S. 373 (2014) ...............................25 Roberts v. Enterprise Rent-A-Car Co. of Boston, 438 Mass. 187 (2002) ..............................15 Schwartz v. Comcast Corp., 256 F. App’x 515 (3d Cir. 2007) ...................22 South Dakota v. Wayfair, Inc., 138 S. Ct. 2080 (2018) ............................24 Specht v. Netscape Commc’ns Corp., 306 F.3d 17 (2d Cir. 2002) ........................13 Structural Sys., Inc. v. Siegel, 3 Mass. App. Ct. 757 (1975) .......................15 Tompkins v. 23andMe, Inc., 2014 WL 2903752 (N.D. Cal. June 25, 2014), aff’d, 840 F.3d 1016 (9th Cir. 2016) ..............18 West v. Uber Techs., Inc., 2018 WL 5848903 (C.D. Cal. Sept. 5, 2018) .........19 Zaltz v. JDATE, 952 F. Supp. 2d 439 (E.D.N.Y. 2013) ...............18 Statutes, Rules and Regulations Mass. R. A. P. 17(c)(5)...............................7 Other Authorities Liz Kramer, Uber Defeated by the Color of Its Hyperlink, American Bar Association (July 5, 2018) ....................................20 5 Jennifer Maloney, The Rise of Phone Reading, Wall St. J. (Aug. 14, 2015) .......................23 Pew Research Center, Mobile Fact Sheet (June 12, 2019) .........................................25 U.S. Dep’t of Commerce, E-Stats 2017: Measuring the Electronic Economy (Sept. 23, 2019) ..........................................9 6 I. INTEREST OF AMICUS CURIAE The Chamber of Commerce of the United States of America is the world’s largest business federation. It represents approximately 300,000 direct members and indirectly represents the interests of more than 3 million companies and professional organizations of every size, in every industry sector, and from every region of the country. An important function of the Chamber is to represent the interests of its members in matters before Congress, the Executive Branch, and the courts. To that end, the Chamber regularly files amicus curiae briefs in cases that raise issues of concern to the nation’s business community.1 Many Chamber members conduct substantial business online. Indeed, trillions of dollars’ worth of e- commerce transactions are conducted every year in the United States. The enforceability of online contracts 1 Pursuant to Mass. R. A. P. 17(c)(5), the Chamber declares that no party or counsel for a party authored this brief in whole or in part and that no person other than the Chamber, its members, or its counsel has made any monetary contributions intended to fund the preparation or submission of this brief. The Chamber and its counsel further declare that they have not represented one of the parties to the present appeal in any proceeding involving similar issues, nor have they been a party or represented a party in a proceeding or transaction that is at issue in the present appeal. 7 is thus of critical importance to the Chamber and its members, as well as the Nation’s economy more generally. Moreover, many of the Chamber’s members regularly employ arbitration agreements in their online contracts. Arbitration allows them to resolve disputes promptly and efficiently while avoiding the costs associated with traditional litigation. Arbitration is speedy, fair, inexpensive, and less adversarial than litigation in court. Based on the legislative policy reflected in the Federal Arbitration Act and the United States Supreme Court’s consistent affirmation of the legal protection the Federal Arbitration Act provides for arbitration agreements, the Chamber’s members have structured millions of contractual relationships—including enormous numbers of online contracts—around arbitration agreements. The Chamber has accordingly filed amicus curiae briefs in numerous cases in state and federal court regarding the proper standard for the formation of online contracts, including briefs at both the merits and rehearing stages in Cullinane v. Uber Technologies, Inc., No. 16-2023 (1st Cir.)—the 8 decision relied upon by the Superior Court in this case. For the reasons we explain below, the decision in Cullinane is wrong as a matter of Massachusetts law, and the Superior Court’s holding to the contrary creates an unacceptable cloud of uncertainty over online contracts. The Chamber therefore has a strong interest in this Court’s resolution of the appeal. II. STATEMENT OF THE ISSUES The Chamber agrees with all of Uber’s points, but focuses its brief on the issue on which this Court solicited amicus briefs: i.e., “Whether, under Massachusetts law, a binding agreement was formed when the plaintiffs completed the registration process for the smartphone application offered by the defendant Uber Technologies, Inc., enabling riders to request rides from registered drivers; including, whether the arbitration clause in the purported agreement was enforceable.” See Opening Br. 34-50. III. INTRODUCTION In 2017, the U.S. economy included an estimated $1 trillion in revenues from electronic transactions in the service industry alone. See U.S. Dep’t of Commerce, E-Stats 2017: Measuring the Electronic Economy 2, https://www.census.gov/ 9 content/dam/Census/library/publications/2017/econ/e17- estats1.pdf (Sept. 23, 2019). And e-commerce transactions in the retail industry added over $461 billion to the economy, growing twelve percent faster than the overall retail industry. Id. Increasingly, with the advent of smartphones and tablets, these transactions are taking place on mobile devices rather than on desktop computers. The enormous, and rapidly expanding, e-commerce sector of the economy relies more and more on online contracts such as those that the superior court refused to enforce. Here, Uber’s sign-up process required plaintiffs and any other potential Uber rider to click a “DONE” button accompanied by both (1) a straightforward statement that pressing the button constituted assent to Uber’s terms of service and (2) a clearly-marked button that, when pressed, led the user to the terms themselves. That process—used