Uber can’t get taxi false advertising case dismissed on 12(b)(6)

Delux Cab v. Uber Technologies, Inc., 2017 WL 1354791, No.
16cv3057 (S.D. Cal. Apr. 13, 2017)
Delux, a cab company in San Diego, sued Uber for false
advertising about “the purported exceptional safety of Uber” and the relative
unsafety of taxicab rides. Challenged claims included:  “SAFEST RIDES ON THE ROAD—Going the Distance
to Put People First,” and that Uber sets “the strictest safety standards possible
…. The specifics vary depending on what local governments allow, but within
each city we operate, we aim to go above and beyond local requirements to
ensure your comfort and security—what we’re doing in the US is an example of
our standards around the world.” Uber also touted rigorous background checks
that it said compared favorably to those in the taxi industry.  Uber added a separately itemized $1 “Safe
Rides Fee” shown on receipts, touting the fee as supporting an “industry-leading
background check process, regular motor vehicle checks, driver safety
education, development of safety features in the app, and insurance.”
Uber argued that the statements were all puffery, but many
of them were specific and testable: Uber claims that it is “setting the
strictest safety standards possible,” that its safety is “already best in
class,” and that its “three-step screening” background check procedure, which
includes “county, federal and multi-state checks,” and adheres to a
“comprehensive and new industry standard.” A reasonable consumer “could
conclude that an Uber ride is objectively and measurably safer than a ride
provided by a taxi or other competitor service, i.e., it is statistically most
likely to keep riders from harm.”  Nor
were the statements merely aspirational and subjective.  Thhe simple addition of phrases such as “Uber
is committed to …,” “Uber works hard to …,” or “We’re doing everything we
can to …” to an advertising statement isn’t an automatic shield from
liability.  Nor did the context preclude
a finding of misleadingness. Though Delux didn’t dispute that Uber screens
criminal records going back seven years and conducts county, federal, and multi-state
checks, the additional statements it made were also falsifiable, and the
seven-year multi-jurisdictional background check was allegedly not “industry-leading.”
Uber also argued that several of its statements weren’t made
in commercial advertising or promotion because they were made to journalists
independent of Uber. Those challenged statements were “inextricably
intertwined” with the reporters’ coverage of a matter of public concern, whether
Uber is safe for riders.  Claims based on
those statements weren’t actionable under the Lanham Act.
The “Safe Rides Fee,” however, was actionable even though
Uber argued that it related to a transaction that had already occurred; it was
aimed at getting future rides.

Uber agued that Delux didn’t adequately allege proximate
cause.  Injury can be presumed in false
comparative advertising cases.  The parties
here were direct competitors, and it made sense that Uber’s alleged
misrepresentations would decrease taxi rides.

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