United States District Court, N.D. California
ORDER GRANTING, IN PART, AND DENYING, IN PART, MOTION
TO DISMISS AND DENYING, AS MOOT, MOTION TO STRIKE RE: DKT.
JEFFREY S. WHITE UNITED STATE DISTRICT JUDGE
before the Court for consideration is the motion to dismiss
and to strike, filed by Uber Technologies, Inc.
(“Uber”), Rasier, LLC, and Rasier-CA, LLC
(collectively “the Uber Defendants”). The Court
has considered the parties' papers, including their
supplemental briefs, relevant legal authority, and the record
in this case. For the reasons set forth below, the Court
HEREBY GRANTS the Uber Defendants' motion to dismiss and
DENIES AS MOOT their motion to strike.
case is one of several cases filed in this District that
challenges the assertion of jurisdiction by the California
Public Utilities Commission (“CPUC”) over
“transportation network companies (TNCs)” or the
manner in which the Uber Defendants conduct business.
See, e.g., DeSoto Cab Company, Inc. v.
Picker, 196 F.Supp.3d 1107 (N.D. Cal. 2016); Rosen
v. Uber Technologies, Inc., 164 F.Supp.3d 1165 (N.D.
Cal. 2016) (“Rosen II”); L.A. Taxi
Cooperative, Inc. v. Uber Technologies, Inc., 114
F.Supp.3d 852 (N.D. Cal. 2015). Before the Court
addresses the facts alleged in Plaintiff's Complaint in
more detail, it provides a brief summary of the statutory
framework and regulatory proceedings that give rise to
Statutory and Regulatory Background.
are exempt from the CPUC's jurisdiction and generally are
regulated by municipalities. See, e.g., Cal. Gov.
Code § 53075.5; Cal. Pub. Util. Code § 5353(g). In
contrast, the CPUC regulates “charter-party
carriers” pursuant to the Charter-Party Carriers of
Passengers Act. See Cal. Pub. Util. Code
§§ 5351-5444. A charter-party carrier “means
every person engaged in the transportation of persons by
motor vehicle for compensation, whether in common or contract
carriage, over any public highway in” California.
Id. § 5360. Charter-party carriers must
“operate on a prearranged basis, ” which means
“the transportation of the prospective passenger [is]
arranged with the carrier by the passenger, or a
representative of the passenger, either by written contract
or telephone.” Id. § 5360.5; see also
Id. § 5381.5(a). “The distinction between
charter-party carriers and traditional taxi companies seems
to turn on this concept of ‘prearranged, '”
because “[t]raditional taxicabs can provide an
on-demand service - i.e., they can be hailed in the
street, ” whereas charter-party carriers cannot be
hailed on the street. DeSoto, 196 F.Supp.3d at
to 2012, the CPUC recognized and regulated two forms of
“transportation for compensation, ” charter-party
carrier services and passenger stage companies. (See,
e.g., Dkt. No. 18, Uber Request for Judicial Notice
(“Uber RJN”), Ex. A, Decision 13-09-045, Decision
Adopting Rules and Regulations to Protect Public Safety While
Allowing New Entrants to the Transportation Industry
(“Phase I decision”) at 11.) On December 27,
2012, the CPUC instituted a rulemaking proceeding to address
TNCs and sought comment on issues such as public safety and
insurance, as well as “how the Commission's
existing jurisdiction … should be applied to
businesses like Uber, Sidecar, and Lyft.” (Uber RJN,
Ex. G, Order Instituting Rulemaking (“OIR”) at
September 19, 2013, the CPUC issued a decision classifying
companies like the Uber Defendants as TNCs. (Phase I decision
at 2, 71.) It defined a TNC as “an organization
… operating in California that provides prearranged
transportation services for compensation using an
online-enabled application (app) or platform to connect
passengers with drivers using their personal vehicles.”
(Id. at 2.) The CPUC assumed jurisdiction over TNCs,
promulgated a number of rules and regulations to govern TNCs,
and stated that the TNC rulemaking proceedings would carry
over into a second phase (the “Phase II proceedings).
(See, e.g., Id. at 3, 71-75.) On January 25, 2016,
the CPUC issued a Proposed Decision on Phase II. (Uber RJN,
Ex. N.) In April 2016, the CPUC issued its Phase
II decision and promulgated additional rules to govern TNCs,
including a requirement that “every TNC shall
certify...the nature of their operations, and shall also
certify how the fares are calculated.” (Phase II
decision at 4.) The Phase II decision also permitted TNCs
to split fares “subject to certain conditions.”
(Id. at 4, 9 n.3, 45.) Finally, the CPUC stated
additional issues would be considered in a Phase III
proceeding. (Id. at 5.)
is a traditional taxi company based in Santa Ana, California.
(Compl. ¶ 10.) Plaintiff alleges that although
Rasier-CA, LLC has been designated a TNC by the CPUC, the
Uber Defendants operate de facto taxis.
(Id. ¶¶ 14, 41.) According to Plaintiff,
“[b]eginning as early as 2011, ” the Uber
Defendants began to operate in Orange County even though they
did not hold a taxi license or any other form of license.
(Id. ¶ 38.) As of September 2013, Plaintiff had
327 traditional taxis operating in Orange County and held one
of three taxi franchises in the city of Anaheim.
(Id. ¶¶ 19-24, 29-30, 51.) Plaintiff
alleges that although it has worked to expand its business,
it has been unable to obtain a permit to operate at John
Wayne Airport (“JWA”), which only allows a few
taxi companies to collect fares from the airport. Plaintiff
also alleges it has been unable to expand the number of taxis
it is allowed to operate in Anaheim. (Id., ¶
to Plaintiff, the Uber Defendants were not subject to the
same type of regulations imposed on Plaintiff by the Orange
County Taxi Administrative Program (“OCTAP”).
Plaintiff alleges “over time[, ] some of those
deficiencies have been addressed, but the background checks
on Uber drivers, safety checks of their vehicles, and rules
for the maintenance of commercial liability insurance remain
quite deficient.” (Id. ¶ 40; see also
Id. ¶ 42.) Plaintiff alleges the Uber Defendants
operate de facto taxis “in all of the areas in
which [Plaintiff] operates authentic” taxis, including
Anaheim and all of Orange County. (Id. ¶ 53.)
“On a daily basis” the Uber Defendants compete
directly with Plaintiff “for the same fares that
[Plaintiff] would otherwise obtain.” (Id.
¶ 54.) According to Plaintiff, because the Uber
Defendants charge more but operate with fewer overhead
expenses and are exempt from limits placed on the number of
vehicles that can operate in a given city, they are able to
take fares away from Plaintiff. (See, e.g., Id.
¶¶ 54, 61-62.) Plaintiff also alleges the Uber
Defendants market themselves “as comparable to taxis
service or as offering the same services as an authentic
taxi, while making false and misleading statements about its
safety and background checks[.]” (Id. ¶
47; see also Id. ¶¶ 70, 79.)
on these and other allegations, which the Court shall address
as necessary, Plaintiff brings claims against the Uber
Defendants for: (1) alleged violations of California's
unfair competition law, Business and Professions Code
sections 17200, et seq. (the “UCL
Claim”); (2) alleged violations of California's
unfair practices act, Business and Professions Code section
17000, et seq. (the “UPA Claim”); (3)
alleged violations of California's false advertising law,
Business and Professions Code sections 17500, et
seq. (the “FAL Claim”).
Applicable Legal Standards.
Federal Rule of Civil Procedure Rule 12(b)(1).
motion to dismiss under Rule 12(b)(1) for lack of subject
matter jurisdiction may be “facial or factual.”
Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039
(9th Cir. 2004). In addition, a motion to dismiss for lack of
standing is evaluated under Federal Rule of Civil Procedure
12(b)(1). See Maya v. Centex Corp., 658 F.3d 1060,
1067 (9th Cir. 2011); White v. Lee, 227 F.3d 1214,
1242 (9th Cir. 2000). Where a defendant makes a facial attack
on jurisdiction, factual allegations of the complaint are
taken as true. Federation of African Am.
Contractors, 96 F.3d at 1207; see also Lujan v.
Defenders of Wildlife, 504 U.S. 555, 561 (1992)
(“At the pleading stage, general factual allegations of
injury resulting from the defendant's conduct may
suffice, for on a motion dismiss, [courts] presume that
general allegations embrace those specific facts that are
necessary to support the claim.”) (internal citation
and quotations omitted). The plaintiff is then entitled to
have those facts construed in the light most favorable to him
or her. Federation of African Am. Contractors, 96
F.3d at 1207.
contrast, a factual attack on subject matter jurisdiction
occurs when a defendant challenges the actual lack of
jurisdiction with affidavits or other evidence. See Leite
v. Crane Co., 749 F.3d 1117, 1121 (9th Cir. 2014).
“When the defendant raises a factual attack, the
plaintiff must support … jurisdictional allegations
with ‘competent proof, ' under the same evidentiary
standard that governs in the summary judgment context.”
Leite, 749 F.3d at 1121 (quoting Hertz Corp. v.
Friend, 559 U.S. 77, 96-97 (2010)). The district court
may resolve those factual disputes itself, unless “the
existence of jurisdiction turns on disputed factual
issues[.]” Id. at 1121-22 (citations omitted).
Federal Rule of Civil Procedure 12(b)(6).
motion to dismiss under Rule 12(b)(6), the Court's
“inquiry is limited to the allegations in the
complaint, which are accepted as true and construed in the
light most favorable to the plaintiff.” Lazy Y
Ranch LTD v. Behrens, 546 F.3d 580, 588 (9th Cir. 2008).
Even under the liberal pleadings standard of Federal Rule of
Civil Procedure 8(a)(2), “a plaintiff's obligation
to provide the ‘grounds' of his
‘entitle[ment] to relief' requires more than labels
and conclusions, and a formulaic recitation of the elements
of a claim for relief will not do.” Bell Atlantic
Corp. v. Twombly, 550 U.S. 544, 555 (2007) (citing
Papasan v. Allain, 478 U.S. 265, 286 (1986)).
Pursuant to Twombly, a plaintiff must not merely
allege conduct that is conceivable but must allege
“enough facts to state a claim to relief that is
plausible on its face.” Id. at 570. “A
claim has facial plausibility when the Plaintiff pleads
factual content that allows the court to draw the reasonable
inference that the Defendant is liable for the misconduct
alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009) (citing Twombly, 550 U.S. at 556). If the
allegations are insufficient to state a claim, a court should
grant leave to amend, unless amendment would be futile.
See, e.g. Reddy v. Litton Indus., Inc., 912 F.2d
291, 296 (9th Cir. 1990); Cook, Perkiss & Liehe, Inc.
v. N. Cal. Collection Serv., Inc., 911 F.2d 242, 246-47
(9th Cir. 1990).
Article III Standing Requirements.
seeking to invoke the federal court's jurisdiction bears
the burden of demonstrating that it has standing to sue.
Lujan, 504 U.S. at 561. If a plaintiff fails to
satisfy the constitutional requirements to establish
standing, a court lacks jurisdiction to hear the case and
must dismiss the complaint. See Valley Forge Christian
Col. v. Americans United for Separation of Church and
State, 454 U.S. 464, 475-76 (1982). In order for a
plaintiff to establish Article III standing, it must show it:
“(1) suffered injury in fact, (2) that is fairly
traceable to the challenged conduct of the defendant, (3)
that is likely to be redressed by a favorable judicial
decision.” Spokeo, Inc. v. Robins, __ U.S. __,
136 S.Ct. 1540, 1547 (2016) (citing Lujan, 504 U.S.
at 560-61). “Where, as here, a case is at the pleading
stage, [a plaintiff] must ‘clearly … allege
facts demonstrating' each element.” Id.
(quoting Warth v. Seldin, 422 U.S. 490, 518 (1975)).
addition, a plaintiff “must demonstrate standing
separately for each form of relief sought.” Friends
of the Earth, Inc. v. Laidlaw Environmental Services (TOC),
Inc., 528 U.S. 167, 185 (2000) (citing City of Los
Angeles v. Lyons, 461 U.S. 95, 109 (1983) (finding that
although plaintiff had standing to pursue damages, he lacked
standing to pursue injunctive relief)).
Plaintiff Has Failed to Show It Has Standing to Seek